Direct Is The New Disruption

Whatever industry you serve, direct is the new disruption.

It used to be that brands would work with their agencies to speak to media properties and engage in other marketing and sales opportunities. Digiday had (another) fascinating piece this week, Amazon advertising is working directly with brands now, cutting out ad agencies. From the article:

“Amazon has always had a robust direct line to brands via an application programming interface for Amazon Marketing Services, the part of its ad business that includes self-serve Amazon ads. But working directly with big brands for bigger media buys, without agencies in the process, is a new phenomenon for Amazon. The company is increasingly sending its burgeoning sales team to directly meet with marketers and chief marketing officers, according to people familiar with the matter. It’s especially well-received by marketers because Amazon Advertising has long been touting itself as simply one part of an overall ‘Amazon strategy’ for advertisers. That means that brands should, or so the pitch goes, be thinking about everything from online Amazon stores, shipping, logistics, review management — as well as advertising.”

It’s not just Amazon.

It could be eye glasses, shoes, mattresses, search engines, online social networks, etc… It’s happening everywhere. It’s obvious, but (still) brands are thinking that their real competition is their traditional competitors (or some kind of technological disruption). When margins shrink and innovative new products are no longer right around the corner, businesses backs get pushed against the wall. They look for ways to maximize profits while cutting expenses. Technology is a driver, but it really just created a stage where middlemen, agencies and the in-betweens are getting squeezed out, commoditized and pushed to the side.

It’s not just services, either. 

Oreo (yes, those yummy cookies) partnered with Amazon to create a three-tiered subscription box offering earlier this year. It’s a smart play on many fronts:

1. It gets consumers to regularly (monthly!) eat and think about Oreos.
2. It enables Oreo to bring flavors not available at local retail (or in the consumer’s region) into their home.
3. It enables Oreo to test flavors, new package formats and more to see what might stick.
4. It creates a sensible frame of brand repetition in the consumer’s mind (are subscription services the new commercial that keeps being repeated?).
5. It gets Oreo into the ecommerce game.

But MOST importantly…

Oreo is now selling directly to their consumers, and has permission to communicate and engage with them (regularly). That cuts out the food stores and pharmacies and everyone else who used to be the retail gatekeeper between Mondelez (the company that owns Oreos) and their consumers. Sure, subscription boxes are not the be-all and end-all for brands (many businesses screw up their subscription box in a royal kind of way), but the concept of selling directly to consumers (which is nothing new) is becoming easier and easier for brands today. That’s a major disruption. 

Do you really know where the disruption is coming from?

In the marketing industry, the current narrative is deceiving. Most editorials on the future of the agency business focus on the big consulting agencies and specialized/smaller  boutiques, as being the main disrupters of the agency space. It seems to me, like it’s more internal brand teams (brands building their own, internal, teams) that are swiping away at a lot of the business that was traditionally given to agencies. And, yes, if a brand builds an internal team, that feels like a pretty “direct” business… not to mention when the media partners (see Amazon above), Google, Facebook, etc… are also working directly with the brands. Take a serious step back from your work today. Think about the real disruptors in your industry. Is it the big tech thing-a-ma-jig? Is it the startup in the garage? Really?  

It seems like the answer is clear: direct is the new disruption.