Direct to consumer brands may no longer be new, but their sustained growth is not in question either. DTC brands continue to both bring in more revenue and spend more on advertising across channels.
Outside of the actual ad spend, the MediaRadar research team found two particularly interesting insights on this front:
- #1: DTC brands spending on advertising are concentrated in specific industries. 3 out of every 4 DTC advertiser came from just four categories: Apparel, Retail, Cosmetics and Home Furnishings.
- #2: As tempting as it is to think of DTC as the democratization of retail advertising, the numbers say otherwise. The chart below shows that DTC ad spend is highly concentrated in the top 10 percent of spenders. In other words, those who spend spend a lot.
These are the top spenders from Q1 2018 to Q2 2019 that make up a large portion of that top 10 percent.
The teeth-straightening Internet sensation spent over $200 million over five quarters. The spending reflects SmileDirectClub’s recent round of funding and $3.2 billion valuation. With 300,000 customers, the DTC brand still has plenty of audience to target.
Valued at over $4 billion, the exercise-focused company combines two DTC models as it spends nearly $180 million on advertising. It sells both equipment and training software to go with it. With premium equipment and a $39/mo price tag, some of Peloton’s advertising has been mocked as out of touch. But it’s clear the unique brand has struck a chord somewhere.
Leesa Sleep, a competitor of Casper, spent over $125 million on advertising over five quarters, trying to tip the market in its direction. Its Better Place to Sleep campaign went in a different direction but maintained its spread across digital and traditional channels.
The genetic testing company is still going strong: 23andme spent over $100 million on advertising from Q1 2018 to Q2 2019. 23andMe introduced a new feature late last year, introducing with it a brand new opportunity for unique marketing messages.
The DTC clothing site Stitch Fix topped the list of competitors with over $60 million in ad spending. The company was last valued at $2 billion after its IPO, meaning it has plenty of capital to work with.
Top DTC Brands With $10-$50 million in Ad Spend
- Casper Sleep: Over $40 million
- Kroger (Home Chef): Over $35 million
- TechStyle: Over $30 million
- HF Global (Harry’s): Over $30 million
- The RealReal: Over $30 million
- Poshmark: Over $25 million
- Cerberus Capital: Over $25 million
- The Saatva Company: Over $25 million
- Quip: Over $25 million
- UNTUCKit: Over $20 million
- Blue Apron: Over $20 million
- Touch of Modern: Over $15 million
- Minted: Over $15 million
- DoorDash: Over $15 million
- JAND (Warby Parker): Over $10 million