Comprehensive IAB Study Finds Leading Direct Brands Reshaping Sectors from Apparel to Personal Care
PHOENIX, AZ (February 10, 2019) – IAB, the national trade association for the digital media and marketing industries, today released its second annual “IAB 250 Direct Brands to Watch” report identifying the direct-to-consumer brands that are driving positive change in the U.S. consumer economy. The companies—including both now-familiar brands, such as Glossier and Warby Parker, as well as newer upstarts such as Brandless and Oars & Alps—are the fast-growing consumer brands redefining the relationships between brands and customers.
“We are in the midst of a seismic change in business practices, enabled by the growth of digital media and driven by a new generation of digitally native entrepreneurs” said Randall Rothenberg, CEO, IAB. “Collectively, the IAB 250 are models of the best practices and trends that are overturning and revolutionizing consumer markets in the U.S. They are setting the competitive standards by which the world’s largest incumbent brands are beginning to base their strategies and investments.”
Disruptors brands are surfacing in all categories, from Stitch Fix and Allbirds in the apparel and fashion sector; Seesaw and The Honest Company in baby care and parenting; to Drizly and Winc in beer, wine, and alcohol. There are seven characteristics that remain similar no matter what category they compete in:
- Direct brands are centered around individual consumer relationships and the data they provide
- Direct brands are web-native
- Direct brands are socially closer to the consumer
- They are “maniacally focused” on consumer experience
- Direct brands use content as a differentiator
- They define content more broadly than incumbent brands and partners
- Their mission is central to their story
Brands like Billie, in the personal care category, lead the way in social community building and storytelling. They are creating unique and individual relationships through, storytelling, customization, and a relentless attention to customer experience, according to the IAB. By creating buzz-worthy experiences, we see that these companies are not confined to the web; they are a bright spot in the dim outlook for retail. Creating physical experiences are a natural extension of these community-driven brands and are propelling new store growth with over 850 physical locations projected to be opened in the next 5 years.
The diversity among the 250 businesses listed in IAB’s report is notable. Nearly a quarter of the direct brands to watch are helmed by women. This trend is in sharp contrast to the Fortune 500, which can claim just 5 percent female leadership. In addition, while New York and California are known as the hubs of digital disruption, nearly 100 of the brands came from a broad range of other locations. Texas is the home of 8 direct brands to watch, with another 6 from Washington state, 6 from Massachusetts, 5 from Illinois and 4 from Chicago. Other states represented include: Idaho, Minnesota, Missouri, Nebraska, Utah, Wyoming and Wisconsin.
“The impact of the growth of these companies is rippling through their respective supply chains, and is seen across the entire country,” said Sue Hogan, Senior Vice President, Research and Measurement, IAB. “If you look at our online interactive headquarter location map, it is represented by brands with headquarter locations from coast to coast, and everywhere in between.”
The report was released at the IAB Annual Leadership Meeting in Phoenix, Arizona to an audience of over 1,200 influential brand marketers, agencies, technology firms, and publishers.
The report features 10 distinct product categories. Apparel/fashion companies accounted for the vast majority of direct brands to watch, with 91 companies on the list.
New this year: the velocity of social media buzz and social footprint was factored, revealing that rapid increases in social attention are happening in virtually every category on the list. In addition, nearly one-third of the brands listed, with representation in each and every category within the “IAB 250,” are built on subscription models, demonstrating that a guaranteed, steady flow of revenue is possible across a range of sectors and products.
Below is the complete list of companies, ranked in each category:
“The IAB 250 report shows how deeply direct-to-consumer brands have pervaded the national market, with thriving companies to watch in 21 states and D.C.,” said Rothenberg. “This is a movement—not just in advertising and marketing, not just in terms of the disruption of traditional sales models, but in the opportunity for Americans to shift perspective for more effective, efficient and collaborative brand/consumer relationships. The 250 brands to watch has evolved from a list of identified logos to a brand tracker indicating momentous change, made possible by the walls broken down by digital media, metrics, and ecommerce.”
“This report illustrates the impressive diversity of the direct brand economy,” added Hogan. “With this, the influence of direct brands in the market is clearly evident. They are marketing in breakthrough ways. and driving traditional brands to rapid innovation. This roster of 250 disruptors, combined with the trends being revealed by Randall and our guest speakers at the conference, are a roadmap forward.”
The “IAB 250” is sponsored by the Direct Brand Initiative Strategic Partners, Google, Hulu, Pinterest, and Spotify.
To see the complete report, please visit www.iab.com/iab250.
All IAB 250 Brands to Watch in 2019 are founded no earlier than 2010. IAB provides a selection of direct brands across categories for Dun & Bradstreet to match against their SMB list, and using additional data collection from multiple sources, including Rival IQ for social footprint and velocity, IAB passes the data through an weighting formula for an overall Company Score: Economic Efficiency (e.g., Revenue; # Employees); Financial Confidence (e.g., Revenue; Funding; Partners; Max Valuation); and social metrics. Data collected also includes company name, URL, and CEO name. Companies are aggregated into 10 categories for presentation purposes.
The Interactive Advertising Bureau (IAB) empowers the media and marketing industries to thrive in the digital economy. Its membership is comprised of more than 650 leading media and technology companies that are responsible for selling, delivering, and optimizing digital advertising or marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, it develops technical standards and best practices. IAB and the IAB Education Foundation are committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., IAB advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, the IAB is headquartered in New York City and has a San Francisco office.
IAB Media Contact