YouTube Legend Dollar Shave Club Says TV Isn’t DeadBy Ritika Puri June 27th, 2013
The multi-billion dollar men’s shaving industry is no match for Santa Monica startup Dollar Shave Club. Last year, with only $1million in funding, the brand rose to Internet stardom with its flagship viral video ad. It was a seemingly overnight success story — in its first 48 hours on YouTube, the video had prompted 12,000 people to sign up to Dollar Shave Club’s subscription razor blade service.: When they say, “our blades are f***ing great,” boy, do they mean business.
In the last year, Dollar Shave Club has progressed from a scrappy viral video to immensely popular business. Last fall, they raised a $9.8 million funding round, and earlier this year, they even launched – get this – a line of men’s butt wipes. And with this growth, they’ve decided to make an oddly traditional move: They’re running a less profane version of the video on ESPN, Spike TV, and Comedy Central, said Kate Kaye of AdAge earlier this week.
The ads have been running since January, and are Dollar Shave Club’s only non-digital ads aside from a series of radio spots.
Why Buy TV Media When YouTube is Free?
Dollar Shave Club’s viral video cost just $4,500, according to Entrepreneur magazine last year. That small investment effectively kickstarted their entire business and PR strategy.
So why the investment in TV ads?
The goal is to compete on par with massive competitors like Gillette, explains AdAge. The $13 billion global market for men’s shaving has practically infinite resources, and to be a visible player, Dollar Shave Club needed to take a leap out of digital.
“We were very hesitant to go into television in the first place,” said Adam Weber, VP of consumer marketing at Dollar Shave Club told AdAge.
The concern wasn’t that it would be unnecessarily expensive; it was that they wouldn’t be able to effectively track results compared to online video channels.
Then Came the Data
Traditionally, television advertisers have relied on 800-numbers to track direct responses from interested buyers. These days, toll-free numbers are no longer effective measurement tools. Consumers would rather hop on their computers or smartphones to do a little more research first.
What pushed Dollar Shave Club to make the jump into TV was the availability of attribution metrics from a company called Convertro, which offers a service that could help them pinpoint the ideal times and places to run TV ads, and then deliver analytics in return.
In the eyes of ROI-hungry marketers, data has brought TV advertising back to life.
“[Convertro] runs through a model and spits out that the TV ad at that airtime delivered this many incremental orders for us,” explains Weber.
Using Data to Invest Budgets Wisely
Dollar Shave Club’s ESPN clips are 60-second clips of Dollar Shave Club’s original viral video. We’ve seen this strategy before, of testing an ad in a low-budget form with no cost for distribution to validate its appeal before the company invests the big bucks on mainstream media. If something is as much of a sensation online as Dollar Shave Club, it’s likely to elicit laughs (and conversions) regardless of the media channel.
When it comes down to the basics, though, this is a story about data. After four months of using Convertro to figure out when and where to run ads, Dollar Shave Club’s cost per acquisition has decreased by 48 percent. Traditional, seemingly expensive TV ads can actually turn out to be extremely efficient if they have the right data backing them.
The next step for Dollar Shave Club is probably to move beyond that $4,500 viral video. Even a YouTube sensation can’t last forever – especially for a start-up competing against some of the world’s biggest consumer goods companies.Image by Gutzemberg