The rapid — and very short-term — growth of emerging brands thanks to their Instagram and YouTube strategies fascinated 2019’s consumer market. Can companies transform this fast gain into a sustainable success in an attention-based economy?
2019 was the year of Instagram and YouTube. Countless amounts of creative content was generated and shared over these social platforms. Meanwhile, billions of consumers were exposed to an exploding number of new emerging brands through ads and marketing campaigns.
Did brands succeed in their social media marketing? Not really. Although many acquired a significant number of new users, few captured and retained customer attention.
In fact, acquiring Millennial and Gen-Z customers is no longer an issue. The problem now lies in retention, meaning that brands now require smarter tactics than ever. This is why numerous emerging consumer brands have failed to maintain their growth while balancing capital efficiency.
Here are two main marketing subcategories—branding and experience building — that emerging consumer companies can pursue in 2020 to ensure success.
Branding: Set yourself up for success from the start
Even if YouTube and Instagram ads are engaging, their turnover and retention rate can be low. Consumers can become disappointed with the brand’s name, mission, logo, color palette, or packaging. Millennials and Gen-Z consumers reject products that do not fit their belief systems. The consumer brands that have figured this out are now investing billions of dollars into their brand’s image.
Warner Brothers, for example, recently announced that it will simplify its logo, transforming it from the iconic, decades-old gold plated image, to that of amatte blue emblem.
Unfortunately, many emerging brands spend anywhere from zero to only a few thousand dollars to build their identities. Later, most of these brands have to undergo expensive rebranding to recapture their customers. Regardless of their products, consumer brands should invest more in their branding prior to an official launch or before any major marketing campaigns.
Experience Building: The most effective and long-lasting strategy
Although it is not the most affordable, building experience is the best strategy to capture consumer attention. Pop-up stores, proactive brand images, and influencers can create a strong and long-lasting impression. The more these techniques “influence” consumers, the stronger the customer loyalty.
Today, experience building is ubiquitous in the market. Contemporary consumers change their tastes at an unheard of pace. Although it may seem expensive, having an advisor with marketing expertise is a must if you want to survive in the consumer market. Simple ads on Facebook or Google will not suffice.
How can you fund your marketing campaign?
Cash flow from customers is never enough to launch and sustain a great marketing strategy. So how do you source capital to best support your ever-increasing expenses? Many emerging brands raise capital through traditional venture funds in exchange for equity. However, at an early stage, such methods are often a very costly way of funding growth.
There are many non-dilutive capital sources in the market already. The most famous and widely used sources are MCAs (Merchant Cash Advances), such as Shopify, PayPal, and Clearbanc. They work well for paid promotions on Facebook and Google. However, for “smart” marketing strategies—like branding and experience building—emerging brands need more than they can get from MCAs.
Fortunately, today there are new alternative options. Capital providers like VentureBox and Lighter Capital, for example, act like a hybrid of equity investment—venture capital structured like a credit investment—and venture debt, and can help companies without burning them or having their shares diluted.