SmileDirect has a lot of explaining to do. The maverick D2C brought a whole new way of selling, even fitting, teeth straightening solutions. As CMO John Sheldon told us at last week’s podcast here., this redefinition of the category is a long, involved sell where leads can take over two years to convert. As anyone with a TV screen likely knows, SmileDirect has become a familiar brand presence across linear, CTV and social video. But even as the company gloms more mindshare, it is guided by that D2C fixation on performance and the line between CPMs and the bottom line. You can listen to the entire
MediaPost: How has the SmileDirectClub video ad strategy evolved?
John Sheldon: SmileDirectClub has been advertising with video in earnest for just over four years. When we started, our TV was really straight DR, very classic, ‘click to go to the site’ kind of stuff, and we relied heavily on paid social, and, to some extent, we still do.
As a transformational brand, video helps us tell the stories of transformation. It's essential to who we are and proving our credibility and our efficacy. Whether it's the stories of Chemani, who's a late 20something who begins her ad by saying, 'SmileDirectClub changed my life,' or Madeline, an adorable young teen girl that breaks into tears because she's so excited at being given our impression kit to start her treatment by [her] parents. These are the stories that help signal exactly what our brand stands for, which is democratizing access to that smile.
MP: What does the video media plan look like now?
Sheldon: We're kind of everywhere, whether it's TV or TikTok or anywhere else we can find our target audience. TV and OTT and connected TV play a huge role in that for our business. We're up now around almost 40% of our spend on these classic and OTT and connected TV spaces for our video advertising.
MP: And what are the key metrics that you're using to measure growth, share of voice?
Sheldon: Our big competitor, [Invisalign], are like the Kleenex brand in the space. And we have completely different models. We're looking at aided and unaided awareness, but we're also looking very hard at making our allocation decisions based on both top-down and bottom-up metrics.
So we leverage Media Mix Modeling as our guidepost on a periodic basis to make sure we're not losing sight of the big picture with how we allocate our dollars. But then it's really easy to tweak and focus on today’s sales. But, of course, 15% of our sales are coming from leads that were [from] 24 months ago.
We have a complex sale: it's two grand, insurance is involved, and you're sticking this piece of plastic in your body for four to six months to straighten your teeth. So we need to be able to tell our story over time; to build up that credibility and the trust that you're going to get the results that we provide.
And it's hard, because the measurement tools between CTV and OTT and TV are all different. So we use MMM to help us create a set of factors to normalize across them, so we can move the monies where we're seeing the best performance. I expect that [we] will continue to spend up in TV.
MP: You have said that CPM is core to the ways in which you make your allocation decisions. Is this just a way to back into CPA?
Sheldon: CPM is really just a shortcut, because we know below a certain CPM we can deliver efficiency nearly every time. It's only a first look metric when we look to evaluate opportunities. But we go far beyond CPM and evaluating opportunities. But it starts with, are we going to be able to get there from here? And the CPMs help give us a head start on thinking about that.
MP: Has that approach closed out certain channels like OTT, where CPMs have gone a little wacky?
Sheldon: There are places that, honestly, we can't make it work because the CPMs don't work. Even in that realm, let's say when Peacock Network opened up, we went in there to try to see if we could make that work for our business. And we're testing those things to determine on an ongoing basis whether or not the CPMs within those different channels are going to work for us.
MP: So which ones are proving most efficient for you now?
Sheldon: We've had terrific success with Hulu. It's been extremely strong. We do a ton of work in tier two and tier three networks on TV, and have a tremendous amount of success in those places. It's good to be in that kind of environment of network viewing.
I see us in the future really starting to play more and more in those high-profile spots which I know start to come with some of these CPMs that we're talking about. I think there are smart placements for us where there are premium properties where the family is together -- teens and parents for appointment viewing in particular. That's an area I'm really interested in.
MP: Since video is so important to explaining your category, what formats are working best for you across these different channels?
Sheldon: On TV, 15s work the best. That audience we've been talking to the longest. They generally know who our brand is now, and so all we have to do is really remind them about our key value propositions, and they move and perform for us in meaningful ways.
OTT and CTV are much more on the 30s side, where we're hitting new audiences who are thinking about us for the first time. It's a little bit longer version of our story.
And in both places where we do brand work, we're doing that in the 30s kind of range. We've just launched our Choose Smile brand campaign to really focus on helping elevate how people think about our brand and what's important, and that takes a little bit more of a storytelling approach. Of course, in the digital environment, we're cutting stuff down and doing bespoke work specifically. We're actually starting to do really interesting long-form work in paid social -- 40 seconds, 60 seconds -- and really seeing that make a difference for us.
MP: Which particular social channels?
Sheldon: Right now we've launched it in Facebook.
MP: How are you measuring that? Does that have a performance impact?
Sheldon: That’s on very hardcore strict performance basis.
MP: So as your brand profile rises, your whole media strategy is changing, you're tweaking it accordingly.
Sheldon: Absolutely, we're tweaking our media strategy very regularly as we're getting new information. Again, we're so young. We're learning so much about what works, what generates traffic, what generates leads, what generates sales, and all three of those are very important to me. We have meetings and metric reviews that just focus on just one part of that funnel along the way in order for us to make sure that we have that continuous stream. Like I said, 15% of our customers are coming from 24 months ago as leads, and so that lead funnel really does need to be constantly fed.
MP: So how are you making the decision in that perennial tension between brand spend and performance?
Sheldon: We're stepping into it -- that's the short answer. And we're using our MMM work to really help us uncover the peripheral effect that the brand work has on the rest of the channels. One example: We did brand work as it relates to our new oral care line that we launched in Walmart last year. That had a really critical downstream effect on our aligner products and people getting teeth straightening. So it's interesting how pushing here actually lifted this boat.
MP: That's fascinating! So this idea that product development has a discernible marketing and even media impact. What did you learn there about how product and distribution actually can start having an impact on other parts of your media plan and brand awareness?
Sheldon: Absolutely, our launch of whitening in 6000 Walmarts, where hundreds of millions of Americans walk by you, was a big seven-foot blurb display sitting there. It's like a giant out-of-home billboard. On top of that, the products are really good. And so getting those in people's hands to get to understand what our brand is all about can be really powerful.
The other element is, as an innovative brand, a disruptive brand, product innovation gives us what we need to continue to showcase just why what we're doing is new and different.
We just launched our Comfort Sense piece, for example, which is a proprietary approach to making [the] teeth straightening process a lot easier on our club members. It's a combination of material science improvements and treatment planning strategies that make the movement of teeth more gentle.
And so more comfort means more people completing treatments successfully, and that's what we really want, getting that net result. Because then they'll go tell their friends and really help us build our reputation in the marketplace. And then we also get to showcase the results in our media to validate that we really are the most advanced way to straighten your smile.