The COVID-19 pandemic has permanently reshaped the U.S. consumer economy. An overwhelming majority of American consumers are experimenting with new brands, and embracing new omnichannel shopping behaviors, which is setting the stage for permanently-heightened competition, according to a new study by IAB.
“The Media-Retail Cartel that limited the brands to which Americans were exposed and could acquire has been infiltrated and overturned by thousands of new brands, the limitless e-commerce shelf, millions of social media influencers, and a growing streaming-media persuasion machine that, contrary to conventional wisdom, favors advertising,” said Randall Rothenberg, Executive Chair, IAB and the co-author of “The IAB 2022 Brand Disruption Report.”
The report is the fifth annual study of what IAB terms “The Direct Brand Economy,” the snowballing effect of changes in digital consumers, digital supply chain management, digital distribution, digital selling, and digital marketing.
Brand Disruption Study Highlights
“Our 2022 Brand Disruption Report proves categorically that brands matter more than ever — but it’s a radically different world now,” said Chris Bruderle, Senior Director, Research & Analytics, IAB. “The new reality is permanent, there exists a ‘no-rest-for-the-weary’ competition for share among incumbents, disruptors, and their marketing partners.”
Consumer Privacy Battles Are Upending Marketing Planning
95% of brands are adjusting their data strategies because of political and browser pressures over privacy. That pressure is driving an advertising gold rush to streaming video. 84% of advertising buyers increasing spend on CTV say consumer privacy issues contributed to their increases. The race to first-party data is on, with nearly twice as many incumbents as disruptors increasing their data investment, resources, or initiatives since the COVID-19 outbreak began.
Who will own the future? Disruptor brand holding companies aspire to become the next P&G
No less than seven emerging DTC holding companies are vying to become the Procter & Gamble of the Direct Brand Economy, and have accrued hundreds of millions of dollars in funding this year: Thrasio, Berlin Brands, Elevate Brands, Suma Brands, Branded, Perch, and Foundry.
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