Tobaccowala Sees Growth in Direct-Brand Economy (WARC)

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News, 12 February 2018

NEW YORK: Many brands are taking back control of their digital destinies through selling products directly to consumers, a move Rishad Tobaccowala, Chief Growth Officer at Publicis Groupe, believes will have several important consequences.

Tobaccowala discussed this subject at the 2018 Cross-Platform Media Measurement & Data Summit, a conference held by the Coalition for Innovative Media Measurement (CIMM).

And numerous brands, he reported, are now selling their products directly to consumers, posing a challenge to the traditional middle men in this process.

“More and more of them are selling directly,” Tobaccowala said. (For more, read WARC’s in-depth report: Fewer ads, fewer agencies? Tobaccowala tackles the “direct-brand” economy.)

And this trend is even impacting sectors where ecommerce has been relatively slow to take off, such as consumer packaged goods (CPG): “You’re seeing major CPG companies who have goals of having 25% of their sales by 2020 direct,” he added.

Mondelez International, the snacks company, is one example of a large manufacturer that has outlined just this kind of target. And the potential payoffs, Tobaccowala reported, extend well beyond driving new revenue streams.

Specifically, he suggested, the most valuable outcome from these efforts may be the amount of first-party customer data they generate for brands.

“Once you start selling directly, you begin to understand the real power of what the data is,” Tobaccowala said. “And once you begin to have that, you begin to have some very interesting leverage.

“Many marketers are paying a lot of attention to this, because I think they realise how important it is. And they should do as much of it as possible.”

This “leverage” results, in no small part, from the granular insights that marketers will be able to access – right through from basic click metrics to highly-complex behavioral indices.

As a step in this direction, Tobaccowala observed, it is now the norm for clients to construct an in-house infrastructure to handle the flood of information heading their way. “Every client is starting to try to create its own data platforms,” he said.

Tobaccowala is not alone in his contention that brands are actively disintermediating the sales process, as evidenced by the Interactive Advertising Bureau’s (IAB) 2018 Annual Leadership Meeting.

This event is being held in Palm Desert, California, and covers the advent of the “direct-brand” economy, including how brands are building their own supply chain “stacks” covering production, attention, data, and fulfillment.

https://www.warc.com/newsandopinion/news/tobaccowala_sees_growth_in_directbrand_economy/40021

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