Digital Marketing. The content-to-commerce route to woo customers

In 2018, three IIM graduates opted out of campus placements to start a finance newsletter — Finshots. Today, the newsletter commands a following of 5,00,000 subscribers. But the idea was never to build just a content company. “We kept telling people that this is not going to be a content company. We are eventually going to sell products,” says Finshots Co-Founder, Bhanu Harish Gurram. 

For Finshots, this content-to-commerce vision came to fruition with the launch of its insurance product — Ditto Insurance — in 2021. Significantly, about 60-70 per cent of Ditto Insurance customers come through Finshots’ newsletter. 

“One of the problems with the insurance ecosystem is that a lot of people are sceptical about buying a product from somebody they have never heard of. In our case, we’ve been able to generate an enormous amount of goodwill through Finshots and a large portion of our customer base wants to support us. They also refer us to other customers, so we  spend very little on marketing,” explains Shrehith Karkera, Co-Founder of Finshots.

The biggest cost for any company is the cost of customer acquisition and Covid-led internet penetration has further increased this cost. As more companies bid for ad space on Google and Facebook, the more expensive customer clicks become. Skyrocketing costs of paid marketing channels have pushed many D2C companies to build or buy content properties, which can help bring down customer acquisition costs.  

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Saus Rahul Chowdhari, Investor at Stellaris Venture Partners, “Today, the paid marketing channels have become expensive and so brands want to diversify and find cheaper ways to acquire customers. Content-to-commerce strategy is just the companies’ way of trying to build better and more diversified businesses, versus being dependent on other platforms (like Google and Facebook).” 

Doubling consumers

Good Glamm Group was among the first ones to try this. Taking the house of brands approach, Good Glamm Group has acquired established content companies like Miss Malini, ScoopWhoop, and POPxo, among others. 

“In the beauty category, we clearly saw consumers discover trends, products and brands on their social media feed and the largest content consumption on social media was beauty. That’s when we felt  content-to-commerce could be an extremely effective way to educate consumers about our products and get them to discover our brands,” explains Darpan Sanghvi, Group Founder and Ceo, Good Glamm Group. 

Vahdam: Adding a content flavour

The acquisition of POPxo proved the group’s hypothesis right. The combined entity saw a massive increase in customer acquisition while its cost of user acquisition (CAC) dropped. Before the POPxo acquisition, MyGlamm was acquiring 30,000 new customers per month. One month after the acquisition, the number doubled to 60,000 new customers per month. Today, with multiple content assets, Good Glamm Group acquires 6,00,000 new customers per month.

Beauty and personal care brand Mamaearth has also embraced the content-to-commerce strategy with the acquisition of mothers-focussed content platform Mompresso. 

A long-term play

Stellaris’ Chowdhari notes it takes time to build a content-led acquisition channel, but once it is built, the customer acquisition is much cheaper in comparison to paid channels. 

Finshots’ Gurram agrees, “It took us about two years to scale Finshots, and now we’re slowly scaling Ditto. So it’s like a long game that you have to play. We built both Finshots and Ditto, with the one round of funding that we raised from Zerodha. We raised about ₹4 crore, which we used to build the entire content business. Now, we have 100 people on the payroll. We truly believe that content is a low cost way of acquiring customers and building a sustainable business.”

While there are some businesses that start as a content platform from day one like Finshots, others choose to build or buy a content platform, once they are a big enough brand. Vahdam India, maker of teas, spices and superfoods, has reached that stage in its brand journey. The D2C (direct to consumer) brand is looking to acquire content companies to boost its inorganic growth. “Unlike some of the group companies which have acquired content platforms, we have not been able to find the right fit for us yet. But I think content to commerce makes a lot of sense, as storytelling is critical in D2C,” says Bala Sarda, Founder and CEO Vahdam India. 

He believes that even though it takes time to build trust through storytelling, people who get acquired through content channels would have a higher LTV (Lifetime Value) in the mid- and long-term, than the ones acquired through direct response marketing.

Consolidation in D2C 

Ishpreet Singh Gandhi, Founder and Managing Director of Stride Ventures notes even before Covid, when acquisition costs were not as high, D2C companies that raised large funding rounds were the ones that proved they could acquire customers digitally and also retain them through content strategies. 

And the major reason why consumer internet companies raise massive rounds is to build an engaged audience. “If you have a distribution, you can sell anything in the world. But creating distribution or audience is the toughest task and it takes the most amount of money. 

So it totally completely makes sense to invest in building content-led acquisition channels,” says Anirudh Garg, Investor at BEENEXT. 

Gandhi cautions that while brand awareness will be created through content, a lot more engagement is needed to build brand loyalties. “I think we will also see another acquisition spree by some of the late-stage D2C companies, as they try to improve their sales mix towards more online and offline. That’s where the D2C market trend is headed,” he concludes.

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