Member Brief No. 8: NYT Commerce Report

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The word commerce was a dirty one in the media space, until recently. One of 2PM’s capstone beliefs is that commerce is the central engine of the digital economy. That may seem to be a reasonable now. But consider that just two years ago, fewer than ten digital publishers maintained direct to consumer storefronts. Many will point to Jackthreads and Thrillist, so here is the clipping from May 2010 for reference:

Thrillist has acquired Gilt Groupe-for-dudes site JackThreads. The deal moves Thrillist, the NYC-based email-newsletter-for-dudes startup, into the e-commerce market. Previously, Thrillist has generated revenue through ads and sponsorships in its emails and on its website.

Spooked by the perceived failures of the Jackthreads x Thrillist partnership, content and commerce was dead on arrival as a revenue strategy for quite some time. But if you dug into the venture’s number, Jason Ross’s eCommerce company did quite well after being absorbed by Thrillist.

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Issue No. 264: Welcome Common Thread

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Pictured: The founders of Qalo

2PM has the privilege of working with a new corporate partner [1] for Q2 2018. Common Thread Collective is one of 2PM’s noted eCommerce agencies, notable for what they are doing on behalf of digitally vertical native brands. Demand generation for eCommerce is an oft-discussed topic on 2PM. There are three styles of content x commerce strategies. The most talked about models:

(1) publishers who are building an eCommerce as a revenue source:

(2) vertical brands who insource content-publishing to bolster organic traffic, improving net promoter score (NPS):

There is a third way that brands interact with top-of-the-funnel consumers. And it centers around connecting brands to influencers, using messaging to develop content that resonates with prospective buyers. From there, it’s about harvesting first-party data to develop one on one relationships with consumers. Here is a highlight from a recent 2PM Executive Member Brief that should provide context for you:


Member Brief No. 3: The Attention Stack

First-party data (FPD) is information compiled and stored by by DNVB’s, media groups, and marketplaces. FPD describes your brand’s visitors, customers, and loyalists. Because companies with FPD have a prior relationship with their customers, they are in a position to use the data, to include names, addresses, email, demo, and gender — to communicate directly with them. First-party data is what is stored in your brand CRM. The attention stack is what your brand and data-minded operatives work to build by harvesting this data.


There isn’t just one way to approach the attention stack or the collection of first-party data. Here’s a look at one of Common Thread Collective’s methods.

  • Step one: understand the brand’s existing and potential customers.
  • Step two: recognize who influences the brand’s potential customers.
  • Step three: configure the most efficient and effective approach to reaching potential consumers with the influence that CTC has cultivated on behalf of your brand. Invite them to engage with your brand.
  • Step four: drive them to conversion or re-engage and retarget with the previously engaged consumer with dynamic product ads.

Given the importance of building the eCommerce sales funnel (i.e. the attention stack), I sought out an agency partner that would allow 2PM to observe their work with DNVB’s and mainstream retailers. Over the next three months, 2PM will examine the processes that have worked for their brands.

As Facebook begins to address their data controversy, agencies like Common Thread Collective will be the first to adjust, better serving their brand partners who are dependent upon Facebook’s marketing data to drive numbers at the bottom of the sales funnel.

Why should you know Common Thread?

Their approach to optimizing a brand’s attention stack is working and it’s working well. On top of this, their culture is truly unique. Prior to settling in on agency life, the group of managing partners focused on two areas of business that remain pivotal to their work: product entrepreneurship and professional athletics. The CTC partnership includes the former founders of Power Balance and are the existing owners of Qalo. Common Thread’s key clients are:  Diff Eyewear, QALO, Theragun, 511 Tactical, 47 Brand, and Owl Cam.

Many of CTC’s influencers were introduced to brands through the partners’ personal network for professional sports contacts. And influence is vital because CTC’s approach to bolster product sales is driven by social proof. There are two reasons that the average American consumer purchases a product: (1) low pricing (2) recommendations from someone that they trust.

We believe social networks are fueled by human interactions and video content, so to be great at social advertising you have to be able to create human content. We create content and activate influencers in unique and scalable ways. 

Taylor Holiday, Managing Director

Growing their own eCommerce brands, in house, is an additional datapoint that sets them apart. The founding team operates a holding company of micro-brands under their 4×400 incubator umbrella, to include: Slick Products, Opening Day, and FC Goods.

By building an attention stack for their own brands, it provided them with a deeper understanding of the economics that determine paid media’s best practices at scale. Common Thread Collective has skin in the game and proving sales efficacy on your own products is not often seen in the agency space. And their work is serving them well, Common Thread Collective’s typical return on advertising (ROA) ranges anywhere between a 4.06x to 8.3x ROA.

Elephant in the room: Facebook changes?

The success of digital ad buys depends heavily on the troves of data that Facebook has on consumers. Given that Facebook could face regulation, this could spell trouble for retailers who are dependent upon Facebook’s ability to influence product sales. The common fear is that Facebook will begin to roll back some of the data collections that allow the best brands and agencies to do their work.

My top priority has always been our social mission of connecting people, building community and bringing the world closer together. Advertisers and developers will never take priority over that as long as I’m running Facebook.

Zuckerberg, Testimony before U.S. Congress

Considering that greater than 70% of Common Thread Collective’s ad money under management is with Facebook and Instagram, Common Thread will be at the forefront of  the agencies tasked with managing these potential changes. We’ll continue to discuss those developments here. In the meantime, learn more about Common Thread by clicking the logo below:

ctc_HeaderLogoRetinaDark (1)

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By Web Smith | Web@2pml.com | @2PMLinks

 

 

Issue No. 261: Two Years Later | Part One

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On March 22, 2PM begins its third year. The purpose of the 2PM letter remains the same. It’s a weekly (or 2x/week) rundown of news, intel, and commentary that shapes our industry. It’s humanly-curated (with extreme care) and each week, the balance of the articles is influenced by the most read links from past weeks. 

This project began as an initial letter sent to 30 industry friends with a simple philosophy: by studying adjacent industries, you can improve your own. As such, the letter has evolved into a trusted source of information and commentary for many of the brightest in media, commerce, data, and branding.

So with that, I’ve highlighted impactful storylines from the last two years. Part one of two will feature the first of five events, shifts, and developments that will influence your industry’s next three to five years.

10. Shopify solidifies its standing as a go-to for top 100 eCommerce.

Platform objectivity is really important here, there’s little evangelism here.Here are the most commonly seen options: custom cart, WooCommerce, Big Commerce, Magento, Salesforce (Demandware), or Shopify. I believe that established brands should build on the platforms that are best for them but the numbers are the numbers.

Based on some recent research, I’ve polled the most notable 110+ eCommerce brands and a resounding 40+% of them are hosted by Shopify. This has tremendous implications for the Shopify agency industry. Current leaders in that space: Bold Commerce, BVAccel, Pointer Creative, Wondersauce, Fuel Made, and Worn. I anticipate that one of them to be acquired by a top 25 brand in the next two years.

9. Affirm redefines consumer credit.

Early in 2015, I encountered Affirm for the first time (albeit late). I was constructing a luxury eCommerce platform for men and I was hunting down ways to bolster the site’s conversion rate. Affirm was one of the first company’s that I reached out to because the premise of the service was simple:

  • offer financing at eCommerce checkout
  • remove friction (long applications, credit checks)
  • keep interest rates low and honest

This process was perfect for the online retailing of higher end items ranging from $500-$10,000. Hodinkee executed this concept to perfection. And now, they are pushing “honest financing” into physical retail.

People can sign up through the website or at checkout on some web stores for financing from Affirm that’s paid off in monthly installments. On Monday, the company said it’s making the micro-lending program available through Apple Pay, letting customers tap their iPhones to pay in brick-and-mortar stores.

This essentially makes Affirm a credit card provider without physical cards or credit scores. The San Francisco-based company pitches itself as superior to traditional credit cards from American Express Co. or Visa Inc. because it’s transparent about fees and charges no interest on purchases from more than 150 retailers.
Julia Verhage, Bloomberg Technology

8. Walmart pivots towards a startup culture.

When Walmart acquired Jet.com, the legacy retailer acquired a new direction led by Marc Lore. Many in the industry remain skeptical of Lore’s ability to bolster Walmart’s position in a market that’s deeply influenced by Amazon, Alibaba, and digitally vertical native brands. But to his credit, Walmart’s market cap is rising. In fact, it saw an all-time high on January 28, 2018. I’ve applauded his innovations. These innovations include his streamlining Walmart’s omni-channel operations, acquiring popular online retailers, and incubating native brands like their new Allswell.

From Member Brief No. 2:

The Allswell brand is strong, it’s independent, it’s inviting. It looks like a Silicon Valley-backed DNVB for bedding and mattresses. But most importantly, it appeals directly to upper-middle class women. If you notice, the “King” bed is now known as the “Supreme Queen”, a nice touch in an era (rightfully) dominated by the rhetoric of feminism and gender equity. Allswell is a play to capitalize on this cultural momentum.

7. Glossier forges a new path for content and commerce.

One of the core tenets of 2PM’s commerce beliefs is that to succeed, you must control both key levers: content and commerce. I’ve called this linear commerce. There isn’t an operation that is executing as well as Emily Weiss’ Glossier.

From the brand’s inception – which spawned from the hyper-popularity of Weiss’s beauty blog Into the Gloss – the beauty company has gone against the proverbial grain of the beauty business. Marketing a sense of authenticity and belonging rather than the beauty industry’s traditional fictitious glamour story, the female-dominant company (Dear Tech People reports 79% of Glossier’s staff is female) captured the love and attention of the coveted Millennials.

Janna Mandel, Forbes

From Member Brief No. 1

Glossier / Into The Gloss has achieved that proverbial line, the result of two planes intersecting to form infinite opportunity. Glossier is operating similarly to Kylie Cosmetics, but in a way that could be more sustainable for the well-funded D2C brand.

The majority of Glossier’s influence referral comes from their blog while the majority of Kylie Cosmetic’s influence referral traffic comes from Jenner’s Instagram and Youtube accounts. While Jenner’s influence is currently stronger, Glossier owns their influence plane.

6. Subscription media becomes the new standard.

Just ten years ago, paywall was a dirty word. And then the New York Times’ innovative commerce department developed a strategy that readers are willing to play for quality. In 2018, with the exception of Axios, Outline, and Inverse, there aren’t many examples of notable media startups who haven’t pursued subscription revenue as their focus.

I’ve cited TheSkimm, Skift, and The Information as innovators in this space.

The newsletter reports a 30% open rate. Since its launch, TheSkimm has expanded to offer podcasts, an e-commerce business and a paid app featuring a calendar of upcoming news and televised events. TheSkimm will use the new influx of money to build more subscription services, perhaps with the help of Google Ventures and Google, and enrich its video and podcasting options, along with plans for data analysis.

Melinda Fuller, MediaPost

In issue No. 262, 2PM will count down the last five storylines. If you have any feedback on 6-10, email me: web@2pml.com.

Read more of the issue here.