DNVBs: Optimize your acquisition costs with Lengow!

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Digital Native Vertical Brands are experiencing their “golden age” on social networks, but the context has considerably changed in the last few years, disrupting their operation.

DNVBs have long been able to take advantage of the large audience on social networks at a low cost, but this time seems to be over.

To take the example of social networks, acquisition costs have doubled year-over-year in the last three years. This situation calls the DNVB model into question but also affects all e-commerce players. DNVBs have long been able to take advantage of the large audience on social networks at a low cost, but this time seems to be over. According to Mary Meeker’s Internet Trends Report, Facebook’s Cost per Click has risen by 61%, and the cost per 1000 impressions has increased by 112% compared to the previous year. This increase in bidding can be blamed on large advertisers who have finally turned to these platforms, against whom DNVBs are struggling. Consumers, who are increasingly solicited by ads, demonstrate their disinterest by clicking less and less on the excessive number of advertisements.

Given the rise in acquisition costs, how can digital brands cope? DNVB provides many options, but first and foremost, it’s essential to master the business model to perfection.

1/ Lengow simplifies the task

  • Automate the distribution of your product catalog

CSV, XML, CMS, API, etc., we easily retrieve data from your source catalog to be optimized on our platform, allowing you to showcase your products on +1,600 distributors worldwide.

Thanks to numerous automations, feeds are quickly operational, allowing your teams to save time and effort and operate independantly, without calling on your technical teams for help.

  • Optimize your ads

Your ad needs to be as attractive as possible to capture the prospect’s attention and get them to click on it. Think quality over quantity. Stand out from the crowd by optimizing your ad as much as possible with high quality images, an attractive title and highlight a special offer. Mention your brand directly in the title of the products. Indicate as much information as possible, such as your delivery policy—especially if it’s free!

To do this, our Rules feature allows you to create a full, customized title that includes the brand and color of your products, for example.

  • Get more control over your performance

It is essential to analyze performance, and several indicators should be implemented to allow for rapid intervention to improve efficiency according to defined objectives. Lengow helps you to set up a certain number of these parameters.

For example, you can retrieve your data by connecting your Google Analytics account to Lengow. Then select a product catalog imported on the platform and configure the application parameters (data to import, choice of account, views, etc.).

Lengow retrieves data from the last 30 days in Analytics once a day. The data is added to the main catalog as an additional source, so you can find it in the dashboard, product overview, rules, exclusions, matching attributes, etc.

  • Only send your most profitable products to a distributor

Have your products been online long enough to generate a sufficient amount of data?
Are you using a third-party source to manage your results and would like to use this data to highlight your most profitable products on one or more broadcasters?

Single out these products with our Segmentation tool and use this sub-catalog as a source catalog for the channel. The list of products will update automatically according to the results.

  • Stop the distribution of your least profitable products

To do this, use the Rule or Exclusion tools to define when certain products should no longer be distributed. For these two tools, performance criteria (turnover, clicks, ROI, CPC, margin, etc.) are available when defining each “condition”.

Example: My products are not sent IF the number of clicks over the last 7 days is greater than 100 AND the number of sales over the last 7 days is equal to 0.

Rules-screenshot

2/ Go further

  • Keep an eye on the competition

Analyze the pricing and strategies applied by your competitors on the channels you use. Adjust your settings accordingly on Lengow.

  • Optimize your landing pages

Having traffic on your site does not mean that the conversion rate is going to be high. The landing page is a key element in turning prospects into customers.Don’t forget to test the performance of your landing page through A/B testing.

  • Focus on customer lifetime value

Customer Lifetime Value is an indicator that corresponds to the sum of the profits generated by a company throughout its relationship with a customer. It is used to assess the profitability of marketing actions and is intrinsically linked to the cost of acquiring a customer. DNVBs interested in this measure can closely monitor repurchase rates and ensure to offer exclusive benefits to their most loyal customers. This strategy can generate word-of-mouth and ultimately acquire new customers through recommendation.

  • Think about offline

To counterbalance the setbacks of digital, some DNVBs are turning to physical trade. The rent represents a large marketing cost, but for some brands, every customer that comes in store is one less digital acquisition cost. To get started, however, it is necessary to have sufficient means to consider offline with confidence. A mixed model can be a good alternative for brands that wish to start selling physically.Web-to-store and local ads (Google, Facebook, Criteo) interconnect online and offline via your product feeds, which become complementary.

These companies have generally been created by enthusiasts, which is their biggest asset, but the business and financial aspects should not be left aside.

Finally, rising acquisition costs do not pose a threat to DNVB for the time being, but could quickly become one for DNVBs that are not well-managed. These companies have generally been created by enthusiasts, which is their biggest asset, but the business and financial aspects should not be left aside. To stand out from the crowd, Digital Natives can no longer rely on an overly traditional approach but must rely on more sophisticated strategies, and increasingly use automations and the right tools to carry out their campaigns. These changes represent a good opportunity for DNVBs to evolve their model and take their development strategy further, taking advantage of all the opportunities available to them today.

To better control your costs, Lengow provides many automations for your e-commerce activity, check them out!

Sources: Journal Du Net, Blog Playplug
Demande de contact EN

Naomi Botting

Communications Manager - UK/NORDICS