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Research Outline

Prepared for Carmen P. | Delivered September 23, 2019

Estimating total marketing spend among direct to consumer companies globally

Goals

To understand what the total marketing spend is among direct-to-consumer companies.

Early Findings

GENERAL MARKETING SPEND
  • The top 5 direct-to-consumer (DTC) brands ranked according to ad spend are Smile Direct Club, Peloton, Leesa Sleep, 23andMe, and Stitch Fix. Between January 2018 and March 2019 these brands spent $650 million collectively.
  • In this period, Smile Direct Club spent over $100 million on advertising in digital, print, and national TV.
  • Peloton Bike, Leesa Sleep, and 23andMe spent less than $100 million on advertising in the digital, print, and national TV space. These companies invest in premium ad units.
  • Stitch Fix spent the greater portion of its $50 million budget on digital advertising.

TV ADVERTISING SPEND
  • DTC brands are increasingly spending money on advertising on TV, which is surprising as these types of companies are considered digital natives.
  • In 2018, 125 DTC brands spent 60% more on television advertising amounting to a total of $3.8 billion. Though this result does not represent all DTC brands, it shows that many well-known DTC brands have grown to include TV advertising next to digital and social media advertising in their marketing strategy.
  • The majority of the growth came from 62 major DTC brands, which include Casper mattresses, Peloton Exercise Equipment and Uber. These 62 brands spent $2.4 billion on TV advertising.
  • Touch of Modern, an online men's lifestyle retailer, increased its TV ad spending to $33.9 million (in 2018) from $852,000 (in 2017). This helped increase its revenue by $50 million.

SUMMARY OF AVAILABLE INFORMATION
  • General information on the marketing spend of direct-to-consumer companies and the marketing spend of some companies has been provided.
  • Further information on the marketing/advertising budget for DTC companies is available, but most likely not in terms of dollar amounts but in percentage increases. Therefore, the total spend on marketing for the past three years could be attempted but most likely would need to be calculated.
  • As a result of the current trend of increasing advertising spend for TV, information was available on the TV advertisement spend.
  • More information on the advertising spend in other spaces is available but possibly not for all advertisement mediums.