Rachel Smith

In recent years, there has been a significant shift in the consumer-goods landscape. This has manifested in the decline of traditional brick and mortar stores, and the rise of digitally-native vertical brands (DNVBs). DNVBs are characterised by the digitisation of all interactions and transactions - in other words, these brands provide a direct to consumer (DTC) product and almost exclusively operate online. Some of the most notable DNVBs include sleep brand Eve Mattress, travel brand AWAY, clothing brand Everlane, and shaving brand Harry’s. 

There has also been a steep rise in mobile-only products. In the UK, this includes challenger banking apps such as Monzo and Revolut, and ride-hailing apps such as Kapten, to name a few. Whilst these aren’t technically classified as DTC brands, the common thread that runs within them is that their consumers can only access them online, prominently via their mobiles, therefore the ultimate goal is to guide consumers in the funnel to visit their website or app.

These brands yield huge capital from extremely lucrative funding rounds, with totals reaching £324.7M for Monzo¹ and $336.4M for Revolut². The online identity of these brands negates the need to finance brick and mortar stores, which frees up the company's funds to pour into other entities. With this in mind, these relatively young brands have begun to expand their marketing approach by deploying more orthodox methods, namely embracing traditional formats such as TV, cinema and out-of-home advertising.

Utilising offline and out-of-home marketing channels might seem a questionable mismatch with these brands’ progressive online concepts, yet these brands continue to have a big presence within the physical and offline environment and it’s proving successful! For example, Monzo recently aired their first-ever TV ad, which led to June being their best-ever month for new customers³. 

We are starting to see a large world-wide adoption of digital-out-of-home (DOOH) marketing whereby there has been a gigantic 51% rise in the presence of these screens within the last year⁴. The use of these digitised outdoor billboards, which can be targeted and updated depending on location and time of day, is overtaking traditional out-of-home (OOH) advertising for the first time⁵. Just this month, the Chinese company, JD.com, made a sizeable investment of $142m in an elevator advertising firm which uses these screens to boost their offline marketing⁶.

A popular target for offline brand awareness campaigns, the Transport for London (TFL), expects to generate advertising revenues of 3.4bn over the next ten years to invest back into the transport network⁷. As a result, they are pushing the advertising opportunities on their real estate by rolling out DOOH in the form of digital ribbons and gateway screens⁸. This is expected to be complemented by the recent rollout of Wi-fi tracking to help understand the commuter's journey and use these insights to inform and create better ads⁹. 

The benefits of the outdoor real estate and offline channels are obvious - they are brilliant for raising brand awareness and closing the online-offline loop. However, there are many opportunities that these advertising methods cannot offer, which are only available with mobile advertising. For example, mobile campaigns offer a much smoother user-journey to guide the audience to an online product which is particularly important for digitally-native brands who require their audience to visit their website or app.

Why is mobile the best partner for these brands?

Paul Coggins, CEO of global mobile advertising start-up Adludio, highlights a huge opportunity for these brands, The natural advertising partner for these digitally-native brands is mobile. Mobile advertising has been previously viewed by some as the end of the purchase loop, a DR platform if you like. However, just as these digitally-native brands have evolved, so has mobile advertising. Adludio is bridging this gap by bringing brands into the top of the purchase funnel through brilliant creative”

“I’m not advocating that these brands abandon their offline campaigns, it’s a great medium for mass reach, but I think it’s incredibly important to highlight the benefits of mobile advertising for these brands. They have great success with offline campaigns, but their audience is primarily online, so why shouldn’t they see even better engagement with their online advertising?”

It’s a well-documented mantra of marketers to focus advertising efforts on where the target audience is. Mobiles are the world's favourite¹⁰ and most frequently used device¹¹, where device owners access the internet for up to 3 and a half hours a day¹². As a result, marketers are spending more on mobile advertising than any other channel¹³. 

“The mobile advertising landscape provides amazing opportunities for brands. This includes the use of the technology native to mobile, creative opportunities, and the ease of shaping and measuring an exciting consumer journey.”- Paul Coggins.

The move to a mobile-first era has paved the way for ultra-innovative and engaging advertising campaigns. Advertisements housed on mobiles can tap into mobile-first technologies such as haptics, gyro and touch, to facilitate kinesthetic learning and create sensory and interactive experiences - not to mention that these interactions are brilliant for assisting the memory of the ad. The interactive opportunities on mobile also facilitate stronger campaign metrics, unlike offline advertising for which metrics are much harder to measure.

It’s much easier to express a brand's personality through creativity in digital advertising because you aren’t limited to static advertisements and can engage your consumers through a number of their senses. For these brands whom consumer relationships and experience are paramount, this facilitates the personalisation of the creative that consumers will best respond to. Exciting creative also aligns much better with these brands’ progressive and innovative personalities, so advertising in a more modern and engaging way contributes to their brand continuity. 

There is also more flexibility with mobile advertising. Creative for campaigns is much more agile, success is easier to track and importantly can be quickly adapted if needs be to avoid making faux pas like this that thousands of people will see - TfL sorry for 'sexual assault joke' tube ad. Finally, it sits in the perfect position for these brands to guide their consumers down the funnel to the path of purchase (or at least browsing!). These brands who ultimately want their consumers to land on their website or download their app are much better positioned to do this by reaching the consumers online rather than offline. Particularly for those brands such as Hello Fresh who rely on subscription-based replenishment, it is important to unify the brand experience and have the option of retargeting.

With the creative opportunities available now on mobile, it’s a no brainer for these brands to take a strong presence in the digital advertising sphere and reap the benefits that mobile has to offer. If you’re interested in learning more about how digitally-native brands can benefit from engaging and interactive mobile advertising, get in touch with us at hello@adludio.com and we’d be happy to help!

 

 

Sources

 

1 https://www.crunchbase.com/organization/monzo

2 https://www.crunchbase.com/organization/revolut

3 https://www.marketingweek.com/monzo-tv-ad-campaign/?cmpid=em~newsletter~weekly_news~n~n&utm_medium=em&utm_source=newsletter&utm_campaign=weekly_news&eid=8799421&sid=MW0001&adg=A200B1C6-013B-42E3-8D4B-AFAA34D3E179

https://www.thedrum.com/news/2018/09/10/digital-advertising-static-motion

5 https://webcache.googleusercontent.com/search?q=cache:vyai5171fqQJ:https://www.campaignlive.co.uk/article/uk-digital-out-of-home-impacts-jump-36-year/1587257+&cd=4&hl=en&ct=clnk&gl=uk

6 https://www.techinasia.com/jd-leads-142m-investment-xinchao

7 https://tfl.gov.uk/info-for/business-and-commercial/commercial-media

8 https://www.thedrum.com/news/2019/05/29/exterion-media-upgrades-tfl-digital-ad-real-estate-with-ribbon-and-gateway-screens

9 https://www.thedrum.com/news/2019/05/22/tfl-introduces-wifi-tracking-improve-ads

10 https://www.telegraph.co.uk/news/2018/08/01/decade-smartphones-now-spend-entire-day-every-week-online/

11 https://www.mobilemarketer.com/ex/mobilemarketer/cms/news/research/7473.html

12 https://www.emarketer.com/content/mobile-time-spent-2018

13 https://www.emarketer.com/content/mobile-trends-2019