The biggest advertising trade group says half of US shoppers are buying direct-to-consumer products, and most big marketers are unprepared


casper nap pillow

Nearly half of shoppers are buying products from so-called “disrupter brands,” and the big marketing companies are unprepared, according to Randall Rothenberg, CEO of the Interactive Advertising Bureau.
These shoppers are not only relatively young and rich, but they’re interacting with these companies in ways that legacy marketers aren’t ready for.
Old-school marketers need to develop a robust and ongoing influencer marketing strategy or risk being left behind.
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A year after the digital advertising industry’s biggest trade group sounded the alarm bell for big marketers like Procter & Gamble and Unilever, it’s got more bad news for them.

It’s well-established that disruptor brands like mattress maker Casper and hair-loss product company Hims are upending these marketing giants. Now the Interactive Advertising Bureau is out with a new report that attempts to quantify this group of shoppers. It says nearly half of shoppers — 48% — are buying these direct-to-consumer products, and they’re rewriting the rules for how they expect to interact with the companies behind them and what they expect in return.

Read more: ‘The industry is killing itself’: Critics say TV is stalling in its efforts to get its advertising act together

“Across the US population, half of consumers are now buying disruptor brands,” said Randall Rothenberg, CEO of the Interactive Advertising Bureau. “That means half are buying brands that aren’t sold in retail stores. That’s astonishing given how recent the phenomenon is.”

For the new report, “Disrupting Brand Preference,” IAB worked with Cassandra, part of holding company Engine Group, to field an online survey in May of around 3,000 people, to paint a picture of the DTC shopper.

The big takeaway is, these people are not only numerous, but they’re the kind of customers that brands salivate over — they’re younger and richer than those that only buy from traditional CPG companies.

In fact, the report found, 68% of people who buy DTC products along with traditional ones are age 44 and under and 32% of them have a household income of $75,000 and up. Compare that to people who buy only traditional brands, where 40% are 44 and under and only 18% make $75,000 and up.

People who buy DTC companies actively share and post content about them

Most noteworthy, the buyers of DTC brands behave strikingly differently from people who only buy the old-fashioned stuff. Almost a third of these people are actively creating, sharing, or …read more


Source:: Business Insider

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