 CMO Luana Bumachar and Martin Agency (the agency behind the ad) CEO Danny Robinson at the Cannes Lions Festival of Creativity, they indicated that there will be another campaign with Snoop Dogg this year. They had a short video that teased it with the caption “Snoop is back and he’s going to sell even more f***ing stoves.”){kind=link}
Solo Stove partnered with Snoop Dogg last fall on a marketing campaign where he was “giving up smoke”, only to reveal days later that he was talking about fire pit smoke. The ads received a ton a media coverage, but ultimately Solo Stove didn’t feel like it resulted in the sales they needed on the campaign and parted ways with their CEO and their external ad agency.
They’ve since hired a new CEO and a new ad agency and have moved on from the Snoop Dogg campaign. Except, they haven’t.
During a panel discussion with Solo Brands’ (the parent company of Solo Stove) CMO Luana Bumachar and Martin Agency (the agency behind the ad) CEO Danny Robinson at the Cannes Lions Festival of Creativity, they indicated that there will be another campaign with Snoop Dogg this year. They had a short video that teased it with the caption “Snoop is back and he’s going to sell even more f***ing stoves.”
Conflicting Messaging on the Campaign
Maybe with time to reflect they realized the Snoop Dogg campaign was good, or maybe there is internal disagreement on the effectiveness of the campaign. Whatever the reason, there is conflicting messaging out of Solo Brands on the campaign.
Beyond the obvious executive changes, interim CFO Andrea Tarbox had the following remarks following the departure of the CEO.
OUR FOURTH QUARTER RESULTS CAME IN BELOW EXPECTATIONS AS WE EXPERIENCED SOFTER-THAN-ANTICIPATED SALES IN OUR DIRECT CHANNEL. WHILE OUR UNIQUE MARKETING CAMPAIGNS RAISED BRAND AWARENESS OF SOLO STOVE TO AN EXPANDED AND NEW AUDIENCE OF CONSUMERS, IT DID NOT LEAD TO THE SALES LIFT THAT WE HAD PLANNED, WHICH, COMBINED WITH THE INCREASED MARKETING INVESTMENTS, NEGATIVELY IMPACTED OUR EBITDA. WE BELIEVE THERE IS A SIGNIFICANT OPPORTUNITY FOR US TO BUILD AWARENESS AND THAT THESE NEW CAMPAIGNS WILL EXPAND OUR REACH AND BENEFIT OUR BRANDS OVER THE LONG TERM.
Andrea Tarbox, former interim CFO of Solo Brands
New CEO, Chris Metz, also had the following to say on his first earnings call at the helm of Solo Brands.
WE HAVE HIGH GROSS MARGINS, BUT WE ARE NOT SPENDING OUR MARKETING DOLLARS EFFECTIVELY, AND THEREFORE, WE ARE NOT ACHIEVING THE RETURN ON AD SPEND OR ROAS WE EXPECT TO HELP DRIVE OUR GROWTH. TO THAT END, IN THE PAST 30 DAYS, WE HAVE HIRED A NEW CHIEF GROWTH OFFICER AND A NEW LEADER OF BRAND MARKETING AND CONSUMER INSIGHTS TO ADDRESS THIS ISSUE. WE HAVE ALSO TAKEN IMMEDIATE ACTION TO RESTRUCTURE OUR MARKETING PARTNERSHIPS. FIRST, WE ARE ENDING OUR MARKETING CONTRACT WITH AN OUTSIDE FIRM THAT HAS PLACED MUCH OF OUR MEDIA SPEND. SECOND, WE ARE ALSO REPLACING OUR CURRENT MARKETING AGENCY. WE HAVE MOVED OUR BUSINESS TO A NEW MARKETING AGENCY THAT HAS STRONG FULL FUNNEL PERFORMANCE AND DIGITAL MARKETING CAPABILITIES. OUR NEW PARTNER HAS DEEP EXPERIENCE WORKING WITH D2C FIRMS THAT ALSO HAVE AN OMNICHANNEL FOOTPRINT, SUCH AS NIKE, ATHLETA, KOHLER, BEATS BY DRE, AND THERABODY. WE ARE EXCITED ABOUT THE POTENTIAL TO PARTNER WITH A LEADING FIRM TO ASSIST US WITH OUR MARKETING STRATEGIES.
Chris Metz, CEO of Solo Brands
That doesn’t really jive with what CMO Luana Bumachar said regarding the value of the campaign this week.
We were talked everywhere. We got about over like $100 million in earned media. We could never afford that as a brand. But then we looked down the funnel and said, what else did it do for the brand? It was an amazing consideration campaign. We looked at all of our retail channels, Amazon, Google, and our own DTC site. The surge in purchasing intent was unquestionable. Also, our organic search exploded. We had over like 500% increase on search. I would like to brag one thing. We also saw search and Snoop numbers going up. We saw these search numbers going up. We also drove Snoop recognition and awareness, let’s just call it. I’ll take that. But also the question was, did it drive sales? Did it convert? And we saw the conversions number going up. So 31% increase of sales of fire pit alone in four weeks of the campaign. We also saw the cost of acquisition going down by a lot. 22% of our cost of acquisition declined during that period. So in summary, it was really good for the brand, it was good for the business, and it’s amazing for the company.
Luana Bumachar, CMO of Solo Brands
Beyond the core financials, there’s also mixed messaging on what the campaign did for the demand funnel. Compare Luana Bumachar’s remarks above to what Chris Metz said below.
IT’S SOMETHING THAT WE STUDIED VERY DEEPLY. AND WHAT I CAN TELL YOU ABOUT THE FOURTH QUARTER IS THAT THE EFFORTS THAT YOU’RE TALKING ABOUT, THE MARKETING EFFORTS, DID GO VIRAL. AND WE GOT A LOT OF BRAND AWARENESS. AND IT’S WHAT I WOULD CALL TOP-OF-THE-FUNNEL MARKETING, RIGHT? SO WE’RE REALLY SHOWING OUR BRAND TO NEW CONSUMERS FOR THE FIRST TIME. WHAT HAPPENS IS, IN KEY SELLING SEASONS LIKE Q4, YOU WANT TO BE SPENDING MORE OF YOUR MARKETING DOLLARS TOWARDS THE BOTTOM OF THE FUNNEL. SO THINK OF THE TOP OF THE FUNNEL AS BRAND AWARENESS, THE MIDDLE OF THE FUNNEL AS KIND OF BRAND CONSIDERATION. AND AS YOU WORK DOWN TO THE BOTTOM OF THE FUNNEL, IT’S BRAND CONVERSION. AND SO YOU WANT TO BE SPENDING ACROSS THE FULL FUNNEL THROUGHOUT THE ENTIRE YEAR, BUT YOU REALLY WANT TO BE CONVERTING IN KEY SELLING SEASON. SO ALTHOUGH WE CREATED BRAND AWARENESS WITH THAT CAMPAIGN, IT WASN’T LINKED IN ANY WAY TO OUR WEBSITE. SO IF YOU WENT TO OUR WEBSITE, YOU WOULDN’T SEE ANY CONNECTION TO IT. WE DIDN’T HAVE A FULL PRODUCT OFFERING THAT CONNECTED BACK TO THAT CAMPAIGN. WE DIDN’T ROLL IT AS MUCH INTO OUR EMAIL AND RE-MARKETING EFFORTS. SO I THINK THE LEARNING IS THAT GREAT CREATIVE, GREAT BRAND AWARENESS.
Chris Metz, CEO of Solo Brands
I think there’s no denying that the campaign created a lot of awareness. Attaching a dollar value to the ROI of the campaign is trickier, like most marketing campaigns.
The campaign ran at the end of November, so it would be exceptionally difficult to separate a seasonal uptick in sales from sales from that particular marketing campaign. Plus, Solo Brands’ Q4 revenue was $165.3 million, down $31.9 million or 16.2% from the prior year. Does that imply that without the campaign, their revenue would have been significantly lower? That seems hard to believe, and a big red flag on their business model if it’s accurate.
Regardless, we look forward to seeing what the new campaign looks like in the back half of this year. I feel like former CEO John Merris will be somewhere saying “I told you so.”