DTC Podcast Summary: “Bonus: Rethinking Profitability: How to Market Like an Investment Banker with Bradley Keefer from Keen”

Release Date: February 5, 2025

Introduction

In this bonus episode of the DTC Podcast, Bradley Keefer from Keen joins host Eric Dick and co-host Greg to delve into innovative strategies for direct-to-consumer (DTC) brands aiming to optimize their marketing efforts and profitability. The discussion centers on shifting the traditional marketing mindset from short-term metrics like Return on Ad Spend (ROAS) to more strategic, investment-driven approaches akin to investment banking.

Background of Bradley Keefer and Keen

Bradley Keefer shares his journey from working in IBM sales and energy commodity trading to joining Keen, a startup focused on empowering marketers. Greg adds context by highlighting Keen’s mission to quantify the impact of marketing efforts, enabling marketers to justify their budgets and roles within organizations.

Notable Quote:

• Bradley (00:00): “We're really trying to enable and empower marketers to actually justify why they exist as a function.”

Mission and Objectives of Keen

Keen aims to transform how marketers plan and execute their strategies by providing data-driven insights that go beyond traditional metrics. The platform helps marketers build better plans, make smarter decisions, and predict the impact of their marketing activities.

Notable Quote:

• Bradley (04:18): “It's about empowering that marketer to make a smarter decision moving forward… ensuring marketing is both impactful and predictable.”

Rethinking Profitability: From ROAS to NPV

A significant portion of the conversation focuses on moving away from ROAS—a short-term metric—and adopting Net Present Value (NPV) to assess the long-term profitability of marketing efforts. Bradley and Greg argue that ROAS fails to account for the true cost and long-term brand equity, whereas NPV provides a more comprehensive view of marketing’s financial impact.

Notable Quotes:

• Greg (07:18): “ROAS is typically so short excited… It exists in the vacuum that… doesn’t take into account long-term equity build.”
• Bradley (08:08): “We believe in net present value, which is the true incremental profitability driven by marketing.”

Insights from the Latest Report

Bradley discusses Keen's latest insights report, which analyzes data from approximately 350 brands managing around $7.5 billion in spend over several years. The report reveals that smaller brands (under $500 million in revenue) typically allocate 47% of their marketing budgets to the top of the funnel (ToFu) and 53% to the bottom of the funnel (BoFu). In contrast, successful larger brands tend to follow a 70:30 ToFu:BoFu split, suggesting a strategic shift towards brand building for sustainable growth.

Notable Quotes:

• Greg (09:58): “The ideal mix for a brand is a 70, 30 top to bottom of the funnel split.”
• Bradley (11:08): “The ideal question is: when do you make that flip from driving units to building brand?”

Strategies for Moving Up the Funnel

The hosts explore strategies for DTC brands to transition from an acquisition-focused approach to one that balances acquisition with brand-building. They emphasize the importance of not solely relying on digital channels like Meta and Google, which can lead to audience saturation and increased costs.

Notable Quotes:

• Eric (11:21): “Brands get addicted to discounting… Negative effects on your brand long term.”
• Greg (15:17): “Brands’ priority should not be moving units. Brands’ priority should be driving profit.”

Measuring Interaction Effects and Diversification

A critical discussion point is the measurement of interaction effects between different marketing channels. Bradley explains how Keen’s platform uses time series data and custom elasticities to model how various channels like Meta, Google, and Amazon interact and impact overall profitability. By understanding these synergies, brands can optimize their spend across multiple channels without overspending on any single one.

Notable Quotes:

• Bradley (16:48): “We customize those elasticities based on your own time series data.”
• Greg (19:58): “Keen operates on what’s known as a point of diminishing return… our platform visualizes this for you.”

Anecdotes and Examples: Poppy Soda and Others

Bradley provides real-world examples, such as Poppy Soda’s strategic investment in Super Bowl advertising, highlighting how sustained and well-planned top-of-funnel investments can elevate a brand’s category presence and drive long-term growth.

Notable Quotes:

• Bradley (20:09): “Poppy ended up spending in Super Bowl…but part of the reason is you can have the conversation around playing it safe versus driving awareness faster and lifting the entire category.”
• Greg (22:04): “Brands who are capitalizing on viral events are using them as tentpoles… changing the trajectory of their sales.”

Future of Marketing Channels: TikTok vs Meta

The conversation shifts to the evolving landscape of marketing channels, particularly the competition between TikTok and Meta. Bradley and Greg discuss the unique advantages TikTok offers in community building and targeted advertising, posing questions about the sustainability and future dominance of these platforms amidst data privacy and AI advancements.

Notable Quotes:

• Eric (30:03): “TikTok feels more like TV or movie competitor… more time spent on it.”
• Bradley (41:55): “Data is the new gold… how we think about data and what we can do with it is evolving.”

Conclusion and Call to Action

To wrap up, Bradley emphasizes the importance of using holistic, data-driven platforms like Keen to navigate the complex marketing landscape. He encourages listeners to download Keen’s Insights Report and explore their platform to optimize their marketing strategies effectively.

Notable Quote:

• Bradley (40:10): “Am I… throwing pennies all over the place? Look at that concentrated strategy and figure out how you can slowly incrementally make your audience wider.”
• Eric (46:03): “Download Keen’s Insights report… go to keen-ds.com and talk to Bradley.”

Final Thoughts

This episode provides valuable insights for DTC brands seeking to enhance their marketing strategies through data-driven decision-making. By shifting focus from immediate metrics to long-term profitability and understanding the interplay between various marketing channels, brands can achieve sustainable growth and higher profitability.

Download the Insights Report & Learn More: For a comprehensive understanding and actionable strategies, listeners are encouraged to download Keen's latest Insights Report here and visit keen-ds.com to engage with Bradley Keefer directly.

Stay updated with the latest strategies and insights by subscribing to the DTC Podcast and Newsletter at directtoconsumer.co.