Razor subscription service Dollar Shave Club burst onto the scene about three years ago with just $1 million in startup funds and attention-getting creative—an irreverent, in-your-face YouTube video with CEO Michael Dubin outlining Dollar Shave’s advantages, and cameos from a person in a bear suit and a distribution center employee.
The video went viral, logging more than 10 million views and winning customers. But to build awareness and long-term growth in a category dominated by the likes of Procter & Gamble and Gillette, a YouTube video alone wasn’t going to cut it. Dollar Shave Club branched out into radio and began investigating television, but was hesitant due to the increased investment required and the murky measurement of today’s TV buys.
“Dollar Shave Club had great success with online video marketing, but we didn’t want to make the leap into broadcast without the ability to test, measure, and improve our campaigns,” says Adam Weber, vice president of consumer marketing for Dollar Shave Club.
That’s when Media Design Group (MDG) suggested a way for the company to expand its efforts into television, while tracking the return on its offline investments scientifically. “We talked to Michael Dubin about TV and radio attribution, and convinced him that because of the virality of the video, we should bring in a cross-channel attribution partner to monitor everything going on,” says Ben Zimmerman, MDG’s executive vice president.
The bread and butter of direct response today is television advertising that drives online conversions, Zimmerman says. “The metric is cost per acquisition,” not the numbers of boxes shipped, like a consumer brand. “The trend is moving from calling a phone number to ordering from a website, Facebook, exposure to retargeting ads, and clicking on affiliate links. There is so much happening before the actual sale takes place.”
MDG edited the viral video down to a :60 spot and turned to Convertro, a Santa Monica, Calif.-based attribution specialist, to test, measure, and improve Dollar Shave Club’s television placements and creative. Launched five years ago, the company specializes in using big data to go beyond the Excel spreadsheet and last-click attribution models to track the consumer’s complete path to purchase and determine how each campaign is driving sales.
“You have to be able to collect the media interaction across all dimensions,” says Jeff Zwelling, Convertro’s founder and CEO. “Very few disagree that attribution is a critical task. The challenge is that most people are doing it manually, which affects the quality of the output. It’s a big-data problem. You have to have a lot of technology to scientifically calculate which impressions matter.”
Together, the companies devised a schedule that would tell if Dollar Shave Club’s media buys were generating returns; which networks, programs, and creative treatments performed best; and which dayparts delivered. While monitoring spots running on male-skewing networks such as ESPN, Spike, and Comedy Central, Convertro’s machine-learning algorithm analyzed and compared searches and site traffic following each airing to determine what worked best. Equipped with a daily cross-platform data analysis, MDG optimized its offline campaign to translate Dollar Shave Club’s viral success to something more mass-market.
Cost per acquisition dropped 48 percent from March through May 2013 after implementing Convertro data to optimize media buys. “TV works,” Zimmerman says. “We found that the acquisition cost of a TV customer was better than what they could get online. In the DR world, I’m buying remnant advertising, and the cool thing is that I can come in and look at what happened yesterday. If one station falters—say conversions are dropping or lead flow is down—I can quickly eliminate [the ones] that are not working.”
The partners have since expanded the data analysis to optimize social media placements, and Dollar Shave Club has grown. Its product line now includes three styles of razors, shaving butter, and sanitary wipes, and the company has attracted more than $10 million in funding from venture capital firms.
While the channels will probably never converge into one tidy package, online videos like the one that launched Dollar Shave Club translate well to the bigger screen. “The younger generation likes content—they like to get it quickly and make quick decisions,” Zimmerman says. “The power of TV is that it can really drive digital channels. TV raises the tide for all channels.”