DTC brands - meet Pac-Man; and what Barclaycard could have done…
As P&G and Unilever move into the DTC market, Dominic Mills tests some assumptions about their evolution. Plus: why celebrity advertising is much harder than it looks; and the unlikely coupling of Jacob Rees-Mogg and Global Radio.
Students of corporate life will be familiar with the idea of the Pac-Man defence, the term coined to describe what happens when corporate prey turns predator.
A similar, if more nuanced, dynamic appears to be at play in the world of DTC brands which, directly or not, nibble away at those owned by legacy corporates.
We’ve seen Unilever move into this space, first with Dollar Shave Club and more recently UK snack brand Graze.
This week it became clear that P&G was following suit. Its recent acquisitions include feminine care brand This is L, First Aid Beauty, and hair care product Bevel, with more to come. In the US, Walmart has bought clothing brand Bonobos.
There’s a good section on the evolution of DTCs in the latest think piece from GroupM. Go to pages 38-41 here. As always, it is sharply written and provocative.
As GroupM points out, all DTC brands reach a critical point at some stage; either they fail (or, the same thing in effect, the VCs pull the money) or their initial marketing strategies, based on organic or low-cost social media marketing, become less and less effective.
At this point, to grow further, they need reach...which means TV and expensive mass media. And so their VC backers have to cough up or they sell out.
For most VCs this is the perfect opportunity to sell, the more so given they are selling into a buyers’ market.
Cost aside, it’s the right time for the likes of Unilever and P&G to buy: the product is proven; the e-commerce infrastructure works; they’re ‘buying in’ ready-made innovation, whether in product, business model or better data usage; and they nullify a potential threat.
The big risk, as GroupM points out, is in what it calls ‘organ rejection’, which works two ways: one, if DTC culture is killed off inside the larger organisation; and two, if consumers are turned off by the idea of big corporate ownership, assuming they even know about it.
But to me the most interesting dynamic is this: the assumption has been that it is the legacy brands that have most to gain from acquiring DTCs.
In fact, the balance may be tipping and it is now moving in the other direction: it is the DTCs that have lots to gain from the classic marketing and advertising skills as practiced by the legacy brands.
Barclaycard, you could done this...
Thanks to correspondents who emailed me after last week’s piece about Barclaycard’s latest extravaganza featuring Simon Cowell.
A couple referred me to the mid-90s series starring Rowan Atkinson which, I’m ashamed to say, I had neglected to mention. You can see a batch of them here, and enjoy Atkinson as hapless spy Latham, a forerunner of his Johnny English character.
On one level you can enjoy the writing and the acting: tight, sharp and, in the way it builds the characters, immensely engaging.
On another, each ad clearly demonstrated a product benefit — whether product insurance (the burning rug ad), or emergency cash (Moscow ambassador ad) — without ever being over-shadowed by Atkinson and his fellow MI7 spies. The card was the hero, not the star.
By the way, like all great campaigns, this one flirted so dangerously with disaster that it almost never was, as Paul Feldwick, the top planner on the series, tells us here. It also won an IPA Effectiveness Gold.
However, there’s a difference between using an actor-celeb like Atkinson, who can play many roles, and a straight celeb like Cowell, who can only play one part — himself.
Both, like Cowell, are Marmite figures. They are all possessed of gigantic egos. One difference, other than brilliant scripts and performances, is that Morgan and Edmonds demonstrate a level of self-awareness that Cowell seems incapable of.
The other is that, in essence, Morgan and Edmonds are the idea — if they won the Lottery, their egos would be out of control — whereas Cowell is merely an adjunct, and a poor and less-than-credible one, to the message. You wonder too if the Droga5 team were intimidated by Cowell or let him, rather than them, exert control.
The lesson here is that celebrity advertising is much harder than it looks. Too often it’s just a cover-up for the lack of an idea.
Jacob Rees-Mogg: Global’s vassal
And finally, to cheer up any back-to-work blues, there’s news of an unlikely coupling: Jacob Rees-Mogg and Global Radio.
The latest information from the register of MPs’ interests shows that Rees-Mogg was paid entirely in champagne — to the value of £323.50 — by Global Radio.
It says this was for a speech (perhaps he gave it in Latin) but I don’t believe that. Surely JR-M’s speechifying costs more than this. This exploitative rate, to borrow one of his terms, is pure ‘vassalage’.
Anyway, I bet he was really called in to give advice on the playlist for Heart 80s. He thought they meant the 1880s and when his suggestions proved useless, they paid him off with a crate of booze.