DTC brands are trying to diversify their media strategies, but often keep coming back to what they know: Facebook.
But Facebook prices are rising and other digital options are proving themselves. Will Facebook always be the darling of DTC advertisers?
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DTC Brands Say They Want to Diversify Media Buying, But By How Much?
Facebook has long been a useful platform for DTC brands to reach and build relationships with their customers. But some brands are hesitant to heavily rely on one platform.
“From a growth standpoint, there’s always this looming fear of being solely dependent on Facebook and being overly dependent on Facebook,” Matthew Michaelson, Smalls co-founder and CEO, told Digiday. Smalls, a cat food manufacturer, has added TV, direct mail and affiliate marketing to its mix.
This doesn’t mean reallocating budgets doesn’t come without setbacks. It takes several learning curves to jump into new forms of paid media. But marketers are so wary of the upcoming changes in the digital marketing landscape, it’s worth the upskilling.
Between the antitrust hearings and cookie-less future of the internet, marketers want to diversify their spending.
“Diversification away from Facebook is the biggest conversation I’m having,” said Jeromy Sonne, managing director of Moonshine Marketing. He noted that it’s still the biggest tool for brands and they will continue to buy on the platform, but they’ll also be experimenting with other formats.
For many DTC brands, fear isn’t driving diversification, but Facebook pricing is. Pricing is expected to surge this year as the economy rebounds. Some brands have reported paying CPMs between $14-$17 on Facebook, compared to $3-$5 on other social media platforms.
“The economy is set to come roaring back, and there’s a lot of competition to get in front of consumers who have been sitting on built-up savings they haven’t been able to spend this past year,” said Ross Shelleman, CEO of Aisle Rocket. Shelleman said brands could expect to see rates increase at least 30% on Facebook.
Even though brands may have various reasons to spread out their investments, many keep coming back to the platform that consistently drives ROI. DTC advertisers like ImperfectFoods, HelloFresh, Peloton and Grove Collaborative have diversified their spending—but they still lean on Facebook and Instagram. MediaRadar data suggests that other DTC brands are spending in a similar fashion.
In the first quarter of 2021, 794 DTC brands spent $363.4mm on Facebook*. Across all other digital platforms with programmatic spend, 1.4k DTC brands spent $62.9mm.
On Facebook, spend from DTC brands is up 8% from Q1 2020. But spend from all other platforms is down 28% over the same period.
Even though the pandemic created the opportunity for DTC advertisers to break into other marketing platforms, social media has traditionally been the darling of DTC brands, where they have built their loyal customer base. It appears that this hasn’t changed.
Top spending DTC brands on Facebook in Q1 2021 are:
- Peloton Bike
Though diversification may be a big talking point right now, DTC brands are still invest in Facebook advertising to a great degree.
*MediaRadar only measures brands who have spent over $30k in a year from a sample size of 2 million users.
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