Content is the key to the kingdom, as competition intensifies amid new-age brands

In December 2021, Honasa Consumer, the parent company of direct-to-consumer or D2C brand Mamaearth, also acquired women-focused content platform, Momspresso, and its associated influencer engagement platform, Momspresso MyMoney, for an undisclosed amount.

Founded in 2010 by Vishal Gupta, Momspresso is a content platform for mothers and expecting mothers. According to the platform, over 95 percent of the content on the platform is user-generated content created by more than 60,000 mom bloggers in English, Hindi and eight other regional languages. Momspresso claims to have over 30 million users every month.

According to data by KPMG, India currently has over 800 D2C brands, with the sector being worth approximately $44.6 billion in 2021 and projected to touch $100 billion by 2025. The demand for these online-first brands is increasing by the day.

Given increasing competition in the space, brands are increasingly diversifying their consumer acquisition channel and focusing on retention. Experts believe that new age companies are increasingly focusing on acquiring new customers through effective marketing, content-first approach and influencer marketing.

Engagement to drive commerce

The reality is that D2C brands find it really difficult to engage with customers, says Sreedhar Prasad, internet business expert and former partner at KPMG. He explains that in order to have consumers to engage and that engagement giving multiplicity to the revenues will only happen through content.

For instance, for a beauty brand, the content could be across formats such as videos, blogs by dermatologists, make up artists and bloggers. Hence, potential customers find multiple reasons to come to a brand-owned platform otherwise they will only come when the brand spends money on retargeting, digital and social media.

“Content becomes a stronger driver for the customer to come to your platform and that’s the reason companies are really buying content platforms because content is engagement. Beauty and health are the most popular categories,” Prasad notes.

Reduced customer acquisition costs

The cost of customer acquisition tends to reduce dramatically if a company invests in high-quality content. Users will end up thronging to a brand’s website or social media platforms looking for relevant content and it becomes easier to gently push products once they start coming to these platforms regularly.

Therefore, content ends up reducing the cost of customer acquisition for new age direct-to-consumer (D2C) firms, points out Anirudh Singla, co-founder and CEO, Pepper Content.

“ScoopWhoop, for instance, is great at creating content, driving narrative and has a large distribution. So they are acquiring a target segment and building a distribution network. So, instead of spending money on performance marketing they have acquired a captive audience base by acquiring ScoopWhoop which will have very high-quality data around users on time spent, interests and more,” he notes.

Agrees Priyanka Gill, co-founder, The Good Glamm Group who believes that content is the cheapest and the most effective way to acquire sticky customers.

“Brands and e-commerce platform’s biggest challenge has been in marketing and we have found out the magic bullet to solve that is content and creators,” she tells Storyboard18. “Acquiring other content firms would increase our brand, our moot with content to commerce and give us an incumbent status with the first-mover advantage in the industry.”

Sreedhar Prasad thinks that content is now converting customers not discounts. “D2C brand will hit the glass ceiling at Rs 100 to Rs 200 crore and content is required to break the glass ceiling so that they become a widespread brand in the country. If you don’t have content then one has to resort to deep discounting and heavy marketing budgets to push products while engagement will only drive the brands,” he cautions.

Outsourcing vs In-housing

Acquisitions of a content company gives brands more control over what’s being produced over when the content work is outsourced to an agency, says Rubeena Singh, country manager of VerSe Innovation’s short video platform, Josh.

“Agencies tend to take more time and they are generalists while an in-house content arm would be a specialist. It is becoming important in digital to speak to the consumer through content, that’s why companies are acquiring companies and controlling the narrative,” she points out.

Form of content is changing too, Singh is quick to note. She adds that it’s no longer just text, there’s video content, AR, NFTs, metaverse, so content formats are evolving very quickly with technology and sometimes companies end up working with multiple agencies and integration jobs become hard.

“Agencies are also working with multiple clients so it becomes a challenge to ensure that they prioritise your work. Therefore, large companies in-housing works out economically and they can control their output better,” Singh concludes.

They used to say 'content is king'. But it seems that content is the key to the kingdom and these new-age brands want the key firmly in their hands.