Nº 322: Sobre DTC y relaciones públicas

A medida que avanzan las marcas nativas digitales, los conceptos DTC de alto crecimiento encuentran su camino en los pasillos de motores creativos como: Bullish, Gin Lane (ahora Pattern Brands), Red Antler o King & Partners. Un subconjunto de las docenas de empresas de DTC que se lanzan cada semana, estos nativos digitales probablemente han completado un aumento o están en camino de cerrar los primeros 1 a 5 millones de dólares en capital inicial. Preparadas para lograr un gran éxito en su lanzamiento, no es raro que una pequeña selección de marcas de DTC finalicen sus cap tables antes de que sus productos estén terminados o se hayan decidido sus estrategias de salida al mercado.

Antes de que un cliente potencial pueda determinar su afinidad por un producto, o su tolerancia a su precio, o su apreciación del proceso de comercialización, o incluso la intensidad de su preferencia de marca, las relaciones públicas de una empresa preceden a muchas de estas decisiones. Producto, precio, proceso y preferencia comparten dos letras: RP.

Dependiendo del producto que se venda y del valor medio de los pedidos de la empresa, los indicadores clave de rendimiento varían, pero CPA, CAC, LTV, COCA y ROI se consideran los más importantes. Estas medidas suelen ser cuantitativas. Sin embargo, para las agencias de relaciones públicas, la mayoría de los indicadores clave de rendimiento son cualitativos. He aquí una breve lista de esos KPI cualitativos.

  • tráfico web de calidad: ¿llegó la campaña al público adecuado?
  • menciones en los medios de comunicación: ¿ha habido expectación en torno a la campaña?
  • calidad del contenido: análisis sentimental (cómo fue recibido por los consumidores potenciales) y prominencia (¿se distinguió la campaña?)
  • share of voice: rendimiento mediático en comparación con los competidores de la marca. Qué empresa tiene mayor cuota de atención
  • compromiso social: volumen de consumidores potenciales que interactúan con la historia
  • impresiones: aunque es extremadamente difícil de medir, este KPI es el número de visualizaciones en todas las fuentes y plataformas de medios de comunicación

Y aquí tiene una lista de KPI de medidas cuantitativas:

  • Volumen de contactos: el éxito de la campaña, determinado por los contactos recibidos por correo electrónico, opt-in o formulario de consulta.
  • Equivalencia de valor publicitario (AVE): el (volumen de medios) x (coste publicitario por impresión) en volumen. Las empresas de relaciones públicas suelen medir lo que un cliente habría pagado por la misma exposición a través de la publicidad tradicional.
  • Ingresos: ¿influyeron los esfuerzos de la agencia de RR. PP. en los ingresos brutos? Los esfuerzos más sofisticados incluyen el seguimiento de la atribución a través de los canales de medios tradicionales y las redes sociales.
Página de aterrizaje "pre-lanzamiento" de Harry's. KPI: correos electrónicos captados. ¿Lista de espera? "Cientos de miles".

Aunque las conversaciones de la era DTC tienden a girar en torno al cacareado ratio LTV:CAC, es hora de que consideremos que las relaciones públicas tienen potencial para ser un factor X para las marcas que buscan crecer de forma eficiente. Del Informe sobre medios de comunicación minoristas de la colección Member Brief: "El 15 de febrero de 2010, warbyparker.com se puso en marcha. A las 48 horas de que GQ bautizara a la empresa como "el Netflix de las gafas", el sitio estaba tan inundado de pedidos de gafas de 95 dólares que Blumenthal suspendió temporalmente el programa de pruebas a domicilio". Este no es el único ejemplo: Harry's aplicó un enfoque similar al utilizar una agencia de relaciones públicas para impulsar los pedidos anticipados mediante la recopilación de decenas de miles de direcciones de correo electrónico. Y Away se lanzó con la ayuda de Sunshine Sachs y luego Azione PR y un plan inteligente para vender libros de mesa de café antes de que sus ahora famosos bolsos de mano estuvieran disponibles para cumplir. De su reciente entrevista con "How I built this" de NPR:

Así que, básicamente, había que comprar el libro por 225 dólares, que era el precio de la primera maleta. Y vendimos cientos el primer día. Y, de repente, otros medios de comunicación se hicieron con él. Las personas que aparecían en el libro estaban entusiasmadas con él.

Por naturaleza, las relaciones públicas son un comodín. Los esfuerzos de los medios de comunicación pueden lanzar una marca hasta agotar existencias. O el lanzamiento puede fracasar y provocar el despido de una agencia de relaciones públicas. A veces pueden ocurrir ambas cosas, según las circunstancias. Con unos honorarios que oscilan entre los 15.000 y los 30.000 dólares al mes, los fundadores y los ejecutivos de relaciones públicas deben estar de acuerdo en el enfoque y las expectativas.

Producto, precio, proceso y preferencia comparten dos letras PR.

La era de la venta directa al consumidor (DTC) está madurando y con ese crecimiento llega un cambio de prioridades. Para diferenciarse, las marcas han empezado a hacer hincapié en la eficacia de la adquisición y la mejora del valor de marca. Digital-only ha evolucionado a digital-first. Hasta hace poco, las marcas aspirantes mantenían un apetito insaciable por un ámbito limitado: la publicidad de pago. No es raro ver marcas que centran su gasto en un número limitado de plataformas. Estas plataformas no deberían sorprender: Instagram, Facebook y Google. Y quizás Pinterest, Snapchat y Twitter, si la marca es más tolerante al riesgo.

Una era diferente: De cero a uno

Para las mejores agencias de RRPP de DTC, como Derris, Moxie, Azione y Jennifer Bett Communications, siempre hay mucho en juego. Las marcas DTC que invierten en retenedores de relaciones públicas requieren un ROA que se asemeje al que obtendrían de otro modo a través del gasto cuantitativo (Facebook, Instagram, Google). Pero para ello se necesita confianza mutua, una visión compartida, un poco de riesgo y mucha suerte. Hay un desarrollo macroeconómico que favorece a las agencias de RR. PP.: el ecosistema DTC ha generado innumerables marcas de medios tradicionales e independientes que han modelado su crecimiento en base a la cobertura de noticias de última hora y el análisis de las florecientes empresas DTC.

En Member Brief: Retail Media, presentamos una breve lista de los periodistas más leídos por el público de 2PM.

[table id=46 /]

A lo largo de la última década, los minoristas han adoptado una estrategia de comercialización más ágil. A su vez, un número creciente de publicaciones, consultores, periodistas y analistas ampliaron su cobertura para presentar las estrategias, éxitos, fracasos y efectos macroeconómicos del comercio minorista en línea. Hace apenas 5-7 años, las publicaciones empresariales más rígidas cubrían la gran distribución. La cobertura de los DNVB se limitaba a Warby Parker, Dollar Shave Club, Bonobos y Harry's. La capacidad era limitada, al igual que las perspectivas. Pero con el tiempo, las nuevas publicaciones (y los medios tradicionales reinventados) empezaron a cubrir los acontecimientos con mayor detalle. Esto democratizó la cobertura y ofreció a los lectores una visión única de las empresas que se encontraban en una fase más temprana; estas empresas son más vulnerables (e interesantes) que las que han recaudado capital de riesgo por valor de nueve cifras.

Los análisis de los medios minoristas se han ampliado y los recursos han crecido para cubrir el ecosistema con mayor profundidad y una frecuencia cada vez mayor.

Francamente, la industria de los medios DTC ha evolucionado hacia el deporte. Sobre todo porque la cobertura se ha vuelto más lucrativa. Editoriales como Forbes, Fortune, Fast Company e Inc. cubren ahora en masa las primeras etapas de los desarrollos directos al consumidor. Y esto no se limita a los medios tradicionales. Sin esta nueva era del comercio minorista directo al consumidor, es poco probable que existieran plataformas como New Consumer, Lean Luxe o ésta. La reciente decisión de Digidayde ampliar su cobertura de la era DTC con el lanzamiento de Modern Retail, un formato familiar, lo confirma. El término "ecosistema" ha cobrado nueva vida. En respuesta a un primer borrador de este informe, Paul Munford, de Lean Luxe, dijo lo siguiente:

Como la primera interacción de la gente con Lean Luxe es el boletín que publicamos o los reportajes que hacemos, tienden a pensar que Lean Luxe es un medio de comunicación. En cierto modo lo es, y siempre ha sido una función esencial (y lo seguirá siendo). Pero, con diferencia, libra por libra, el componente más potente del ecosistema Lean Luxe es el canal privado de Slack al que los suscriptores, por el momento, tienen que optar para ser tenidos en cuenta. No sólo es un lugar para la conexión diaria entre los usuarios en torno a este interés compartido por las marcas y los negocios modernos, también es, lo que es más importante, un lugar que facilita la conexión en el mundo real fuera de línea.

Plataformas como LL han amplificado las impresiones y el descubrimiento de productos. En lugar de centrarse en el alcance, Lean Luxe optó por centrarse en la profundidad, una característica de muchos de los nodos de relaciones públicas más eficaces de todo el ecosistema.

¿Qué significa esto para el DTC y las relaciones públicas? Aunque puede que sea más fácil que nunca enviar un presupuesto a una publicación importante de tecnología, estilo de vida o comercio minorista, nunca ha sido tan difícil conseguir una cobertura que influya en el mercado. Se estudiarán formas alternativas de relaciones públicas y se seguirán desarrollando los KPI. Una mención en la prensa ya no es la validación que era. Pero las agencias de relaciones públicas nunca han sido tan esenciales para la vida de las marcas DTC. Y las mejores agencias están encontrando nuevas formas de llegar a los clientes preparados, en línea y en la vida real. En algunos círculos nicho: foros, chats de Slack y correo electrónico directo, se toman decisiones de compra de productos y se forman afinidades de marca. La cofundadora de Haus [1], Helena Price Hambrecht, lo comprobó de primera mano con el exitoso lanzamiento de su marca de bebidas espirituosas. Optó por las conexiones personales en lugar de los KPI tradicionales: optimizar las impresiones del embudo superior:

La influencia no es el número de seguidores. La influencia son años de establecer contactos significativos en los sectores en los que has decidido trabajar. Es labrarse una reputación por hacer lo que uno dice. Es un historial de trabajo sin escatimar esfuerzos. Si la gente espera de ti un trabajo de calidad, invertirá en lo que publiques a continuación.

Ahora es una cuestión de impresiones masivas (menor conversión) frente a influencia de nicho (mayor conversión). Como la captación de clientes sigue evolucionando, las relaciones públicas deben evolucionar con ella. Una observación está muy clara para los fundadores de DTC: los ingresos son el KPI. Para los nativos digitales que buscan lanzarse con velocidad, están optando por dejar de lado las impresiones como KPI principal. Estas marcas están optimizando una conexión genuina y profunda.

Lea aquí la curación del nº 322.

Informe de Web Smith | About 2PM

[1] Haus es una sociedad de cartera de 2PM

Memo: Shopify Unite and Network Effects

In a recent conversation with the founder of the infamous digitally-native brand Wone, Kristin Hildebrand was opining on her recent struggles with her eCommerce cart. With a price point of $320 per pair of her leggings, dropped carts are a way of life for luxury products. But BigCommerce, her platform of choice, wouldn’t let her review dropped carts for outreach to potential customers.

When the issue was researched, 2PM received answers from nine separate eCommerce agencies. Each confirmed that dropped carts should be reviewable across any platform. The irony wasn’t lost on me. Nine separate agency executives responded publicly or privately to highlight a key differentiator between Shopify and BigCommerce. They were all Shopify Partners. In the month of May 2019, Shopify’s stock rose 12.9% after earnings reflected that the company beat analysts’ estimates. As of this post, the company’s stock has risen 907% over the last three years and 2019 has seen 120% growth, thus far. But is Shopify the most technically capable eCommerce SaaS? The vast majority of honest observers would contend that while other platforms are technically superior at the enterprise stage, Shopify owns pre-enterprise ($0 – $5,000,000 in annual sales).

If you were to sit in a room with BigCommerce or Adobe’s c-suite and explain that product differentiation can be more than a software iteration – you won’t be sitting there for long. And that is part of Shopify’s mounting advantage. It’s unclear whether or not the original intent of the Shopify Partner ecosystem was to be a catalyst for network effects. But that’s certainly the case. Founder Tobi Lutke, Harley Finkelstein, and team stumbled upon a new form of competitive advantage in commerce SaaS. Here, at the intersection of influence and efficacy, sociological advantages of retail brands have interfaced with an ecosystem of software as a service.

For enterprise-level customers, Austin-based BigCommerce’s platform has maintained tremendous technical advantages, as does Adobe’s Magento. But it seems to matter less and less, relative to Shopify’s continued momentum. Shopify’s network effects are unlike any in SaaS. We’ve seen Microsoft Windows exclude Netscape in favor of its own Internet Explorer. Some of us can vaguely remember when Instagram only serviced iOS users. For a time, Apple’s app store was its own network effects-driven moat. But Shopify’s defensibility is slightly different. It’s been bolstered by human resources and sociology.

BigCommerce and Handshake Announce Strategic Partnership to Deliver Joint SaaS Solution for B2B Ecommerce. (January 2018)

As with any tech platform that possesses network effects, platform improvements are a development cycle or acquisition away. In a recent report by Tech Crunch, Ingrid Lunden detailed the quiet acquisition of a company that – until recently – was a competitive advantage for the BigCommerce ecosystem.

This is big business: a recent report found that B2B e-commerce sales in the U.S. alone passed $1 trillion for the first time in 2018. As with consumer-focused sales, platforms like Handshake’s offer merchants the ability to handle these sales directly, rather than handing off the sales to third-party marketplaces, where the merchant also needs to pay a commission to the third party and need to play by its rules.

In a flash, Shopify acquired Handshake for a number that hovered around BigCommerce’s 2017 gross revenue. It’s been reported that this acquisition was such a surprise frustration for BigCommerce that their editor removed their partnership announcement from the press release page. And rightfully so. Handshake will enable Shopify Plus’ existing enterprise clients to grow their B2B business. And it will remind early-stage customers (and ones who’ve yet to be sold on Shopify’s services) that they are the end to end solution from launch to exit. The author of a recent essay on the network effects of Bird scooters, Lightspeed’s Jeremy Liew explains network effects in this context:

We’d all like to believe that innovators with the best product win. Sometimes that’s true. But in the consumer world, where your product is easily observable by your competitors, product innovation is a fleeting advantage.

Are you attending Shopify Unite?

Shopify in blue, Adobe’s Magento in yellow, BigCommerce in red.

Leading up to the annual event, this is the most frequent question that you’ll hear in the DTC ecosystem. When rumors of Shopify’s Handshake acquisition began to surface, it was all the chatter among Shopify’s impressive circuit of loyal agencies. Prior to the announcement, this buzz materialized online like a massive public relations coup. Both a sales channel and a PR platform of sorts, Shopify’s partner ecosystem deserves the credit for a considerable amount of Shopify’s explosive growth – of late. In a December 2018 report by Digiday, it was reported that Shopify’s agency ecosystem generated nearly $800 million in revenue.

This is in addition to the $1.1 billion in forecasted revenue for Shopify, Inc. By most measures, Shopify’s business is outpacing that of Magento’s and BigCommerce’s. With over 16,500 partners referring potential vendors, the growth makes sense. Shopify boasts agencies like Winnepeg’s Bold Commerce, a group that’s grown to 256 employees. And San Diego’s Brand Value Accelerator, an agency with 151 employees and growing.

Tobi Lutke on Twitter: “😂 / Twitter”

😂

For the most successful agencies in the space, it means big business. For Shopify, it means referred sales, an organic public relations arm, and a community of enthusiasts that operate – quite literally – as a defense mechanism. And there’s no bigger event than Shopify’s annual Unite. It’s a yearly capstone that should remind analysts that Shopify is effectively commoditizing technology, making human relationships the differentiator. It makes the platform’s advantages that much harder to duplicate. Shopify COO Harley Finkelstein made this clear at last year’s event:

The future of commerce needs to be owned by all of us — partners, merchants, service providers, tech enablers and shoppers. The masses, not the few. So we need you to join our movement.

In a sense, Shopify has grown by way of the technological advancements of its competitors. On occasion, the company builds and democratizes new technology for the different stages of its own customers: Basic Shopify, Shopify, Advanced Shopify, and Shopify Plus. Lightspeed’s Jeremy Liew concluded his essay with the following, “Unfortunately, the leaders in industries with strong network effects cannot be overcome through product innovation alone.”

The growth of the DTC era can be attributed to SaaS companies like Shopify, BigCommerce, Magento, and Demandware. But in an industry where innovations are finite development cycles away, community and brand equity has become the key differentiator. The city of Toronto is the home of the first, international NBA title and a certain, best-selling musician. But it’s also home to the annually sold out Shopify Unite – an industry-leading display of a SaaS company’s network effects. It’s unlikely that either of these mainstays will be duplicated any time soon.

Informe de Web Smith | About 2PM

No. 320: It’s Not An Antitrust Problem

The New York Times recently published a report [1] that suggested that Google made $4,700,000,000 on the backs of local news publishers in 2018. This figure has since come under fire but, regardless of its accuracy, the figure frames an argument that you’ll see more of. Are Google and Facebook to blame for digital media’s decline? The answer isn’t as direct as you’d anticipate. And will solutions like HR 2054 properly address the concerns of traditional media? That answer is no.

The HR 2054 bill: To provide a temporary safe harbor for the publishers of online content to collectively negotiate with dominant online platforms regarding the terms on which their content may be distributed.

For the old guard, the problem is technological. But not in the way that they’re thinking. Consider the number of clicks between discovery and a confirmed subscription for a publisher like the Atlanta Journal-Constitution (no seriously, try it). The number ranges between 11 and 17 total clicks. The typical eCommerce site accomplishes the same transaction in 2-5 clicks. Google and Facebook are not the culprits here. Understanding modern commerce ecosystem is the problem.

Digital publishing CEO Erika Nardini has gone on record as saying that, for Barstool Sports, she hires employees that are digital-natives. The idea of being from the internet, not on the internet is a concept that is, in itself, revolutionary. These digital native individuals tend to see things differently, according to Nardini. Certain ideals and processes are native to them. And it enhances their business: Barstool has between 5-7 revenue streams at any given time. This basic understanding of modern media and consumerism can be the difference between seeing FAANG (Facebook, Amazon, Apple, Netflix, and Google) as allies or as the threats.

The digital-native publisher optimizes their offering, in partnership with these platforms, to grow their reach. But this far different than blindly relying upon them for traffic or search juice. But for every Bleacher Report, The Athletic, or Barstool Sports, there is a media company that’s failed to discern a suitable path forward. For digital media, it isn’t solely about reach, it’s more than ever about depth. Depth, more so than reach, is how publishers are rewarded today. Bleacher Report’s growth doesn’t happen without FAANG, the same platforms that traditional publishers decry as the culprit of their shrinking revenues. Look no further than Bleacher Report’s social media statistics. The sports news site uses social media as a value-add rather than the traditional means for social in the media industry: an RSS feed.

2PM Data: Bleacher Report and FAANG

Most popular Twitter accounts worldwide as of February 2019 | Source: Axios, Crowdtangle
Leading brands in the United States on social media in 2018 | Source: Shareablee
Leading brands in the United States on social media in 2018, based on user engagement on owned video content | Source: Shareablee

In a recent report, Digiday estimated that Bleacher Report is due to generate over $200 million in revenue in 2019. Led by new CEO Howard Mittman, Bleacher Report (B/R) has methodically adopted a linear commerce strategy to differentiate themselves from others in the market. Here’s a key paragraph from the Digiday report [2]:

Bleacher Report is weaving in commerce with custom apparel and other merchandise that the company sells to fans both online and through its events. For the upcoming FIFA Women’s World Cup, Bleacher Report is working with female artists to design nine unisex soccer jerseys, which people will be able to purchase on Bleacher Report’s site. Bleacher Report’s commerce business is still in its early stages, with revenue up 500% year over year, said the spokesperson.

Though Mittman is against paywalling content, the Turner Broadcasting-owned Bleacher Report has introduced a growing number of opportunities for readers to transact through the company’s channels. A key to these commerce opportunities? Maintaining brand presences wherever their target demographic’s attention is held. In this way, Google and Facebook have become assets rather than liabilities. This is a common refrain amongst digitally-native media companies and the legacy-publishers who’ve adopted these best practices.

Old Dogs, New Tricks

The New York Times leads in this category. Though the 2016 election cycle garners a lot of the attention for the publisher’s subscription performance, growth began before these key election months and has far-exceeded expectations through 2018 and into 2019. If nothing else, this shows that old dogs can learn new tricks.

Number of paid subscribers to New York Times Company’s digital only news product, Q1 2014 to Q1 2019 | Source: New York Times
While some publishers decry Google and Facebook’s presence as barriers to their survival, The New York Times has fostered a cross-promotional catalogue of high-visibility media experiences, brand statements, and enhanced utilities. This has helped to elevate the publisher to a KPI beyond eyeballs and clicks, alone. NYT has developed a level of digital brand affinity that, in turn, has grown the company’s revenue verticals. In short, the Times deemphasized reach, alone, in favor of fostering a readership that sought a deeper consumer relationships with their publisher.

From: Linear Commerce

The digital economy rewards the companies that work along the line that separates traditional digital media and traditional eCommerce.A great product needs an organic and impassioned audience. Captive audiences need products and services to offer the community. Linear commerce is the understanding that digital media and traditional online retail will eventually meet at the center – along the line – the most efficient path for growth.

So why do other publishers seem to ignore this shift? In a recent conversation with CNN, the Editor of the Atlanta Journal Constitution (AJC) made a striking statement; he cites reach, he ignores depth. Here’s Kevin Riley on his concerns:

At the Atlanta Journal-Constitution, our audience has never been larger than it is today. And I think that is true of many, many newspapers when you combine the print audience and the massive digital audience that we can all garner in our markets. So does it make sense, that at a time when our audience is at our biggest point, our financial difficulties are at their most difficult point. To me that doesn’t make sense.

But it does make sense. And it explains the broader disconnect that exists in business, as a whole. Publishers, like many in retail, view their legacy products as dutiful purchases rather than market-driven, affinity-based products. Ben Thompson wrote a brilliant antitrust breakdown in “Tech and Antitrust.” Thompson concluded with the following thoughts on the potential of Facebook or Amazon experiencing legitimate antitrust scrutiny:

At the end of the day tech companies are powerful because consumers like them, not because they are the only option. Consumer welfare still matters, both in a court of law and in the court of public opinion.

Below is a comparison between a newspaper in a top 20 market (blue) and an independent publisher in the same market (orange). The difference couldn’t be more striking, the orange company optimizes for brand affinity, utility, and captive attention. The blue company optimizes for tradition-driven utility.

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Blue (legacy to digital): 1/ two revenue sources: display, subscriptions 2/ employs 200+ 3/ ownership group is public and trading at historical lows. Orange (digitally-native): 1/ four revenue sources: display, native, affiliate, DTC 2/ employs ~12 3/ privately-held

Across America’s second tier of metropolitan areas, legacy publishers like the Atlanta Journal-Constitution or Ohio’s Columbus Dispatch market to potential customers in a lackluster manner, at best. Like many news bureaus across the country, the contributions of these publishers are critical to the good of the public. As such, the typical value proposition seems to be duty to, rather than affinity for the publisher.

True, the dance between commerce and local news is different than what you’d find in sports or lifestyle but that doesn’t mean that the principles don’t apply. The New York Times has done a masterful job of reducing purchase friction (CRO), for instance. A casual reader can subscribe in 3-5 clicks. The publisher has also taken measures to widen and shorten their marketing funnels while staying true to their core mission. Consumers can learn about their product and convert in a much shorter time.

Traditional newspapers must begin to incorporate the ideas of digitally-native thinkers or viewership, clicks, and subscriptions will continue to suffer. The first step would be to examine their own platforms before dissecting the merits of another. Attacking Google, Facebook, Apple in the name of antitrust scrutiny distracts publishers from the KPIs that will determine present and future. They must operate as affinity-based businesses, now. Duty to newspapers perished with broadband access. But that doesn’t mean that business has to perish with it. What these editors and publishing executives will find is that the truth is less the 17 clicks away.

Read the No. 320 curation here.

Informe de Web Smith | About 2PM