Big startup ideas, they say, are a lot like “Goldilocks and the Three Bears.” Sometimes they are too hot and emerge before the marketplace is ready to embrace them. Sometimes they’re too cold and miss the market altogether. Here’s why Simulmedia’s new direct-to-consumer media-buying platform is just right.
First and foremost, the industry’s mindset has come around to the idea that direct-to-consumer marketing isn’t just a new disruptive force, but a fundamental new business model empowered by direct-to-consumer media: digital.
Secondly, it works -- enabling new establishment brands to emerge by bypassing traditional media channels and going direct-to-consumers, to compete with and often disrupt old establishment brands.
Thirdly, when they reach maturity, these new establishment brands do what all mass marketers do -- they turn to high-impact, mass reach advertising. And the best form of that still is television.
So what if TV could leapfrog the process and become an engine for direct-to-consumer brands earlier in their evolution? That’s what Simulmedia introduced last week. The platform, dubbed D2Cx, leverages the same platform, technology and inventory Simulmedia has developed for big brands, but puts it in the hands of new-to-market brands that otherwise would use search, social, mobile and the burgeoning biddable OTT marketplace.
If you want to get a glint of how that works, download LUMA Partners’ Terry Kawaja’s direct-to-consumer presentation and you’ll see why it scales. Now imagine scaling it with the best and most effective TV advertising inventory.
I’m not sure if this is what Dave Morgan had in mind when he founded Simulmedia in 2008, but I suspect some form of it was, even if the term D2C was way too hot back then. Want some proof? Remember Spot Runner? No? That was the WPP-backed startup that put the power of TV advertising into the hands of anyone -- small, medium-size or big business -- via a simple digital interface. All you need was a credit card and a media plan.
Spot Runner failed because it was too hot, but also because its technology and its supply of inventory didn’t scale. After eight years of incubating, Simulmedia with the biggest players on the supply and demand side, the timing is just right for D2Cx.
And ultimately, it should be a great thing for TV -- enabling it to unlock sources of demand that it has, to date, been prohibited from tapping into.
How do I know? I’ve seen it before. Actually, I covered it.
When I started covering the TV business in the early 1980s at Adweek, there were just 200 brands from 50 companies buying the “Big 3” TV networks. By the end of the 1980s, thanks to Ted Turner, Kay Koplovitz, Bob Pittman, Bill Grimes and other cable pioneers, there were 4,000 brands buying “national TV.”
Today, sources tell me there is anywhere from 8,000 to about 12,000 brands using national TV in some form.
If Simulmedia’s D2Cx does what I think it will, watch that grow geometrically over the next few years. That will be good for TV. It will also be good for the rest of the ecosystem, especially ad agencies, because it will create more demand for all advertising, marketing and media services.