Tech: A startup promising everyday household items for $3 could wreak havoc on TV advertising

If a new startup promising cheap everyday household items catches on, it could wreak havoc on marketing–particularly TV advertising

Growing up in the US, you learn quickly that Crest toothpaste promises superior whitening, and Old Spice will make you smell like a real man.

But if a new startup–Brandless–which promises to create a "Procter & Gamble for millennials"–catches on, it could wreak havoc on the marketing industry, and TV advertising in particularly.

For decades, marketing giants like P&G and Johnson and Johnson and General Mills have churned out every type of soap and shampoo and razor and cleanser imaginable. And to get people to buy these particular items over the thousands of others in the market, they needed to tell stories.

They did that through packaging and characters like Tony the Tiger and Mr. Clean. And they did that through TV ads.

Indeed, even as TV ratings plummet, these so called "CPGs" or consumer packaged goods companies, have helped keep the TV ad market vibrant, mostly because they have decades of experience and research showing that TV is the best place to tell their stories.

But what happens if a new generation of consumers starts rejecting those brands for convenience and price? After all, millennials and other demographics have already shown they're perfectly happy buying cheaper glasses and mattresses from direct retailers that cut out all the expensive distribution and marketing costs. And then there's the little example of Amazon's impact on Americans' love of shopping in stores (see, Day, Prime).

It's a big if of course. People love brands because of what they say about themselves, like being a Nike running type of person. But for items that people don't like or need to think that much about, when does marketing at its core become irrelevant?

For decades, we heard the message that "Choosy Moms Choose Jif." At some point, choosy moms might go with the peanut butter that costs $3 and gets sent straight to their house, as long as it tastes pretty good.

And what do the Procters of the world do if their sales take a big hit? The guess here is they probably don't decide to spend even more money on marketing, particularly TV ads. They'll more likely have to rethink their business models.

In the short term, that could be painful and scary for TV networks, who live and die on big CPG brands spending millions to prop up a good part of the $70 billion-plus TV ad market. Not to mention the ad agencies that revolve around such brands.

If a new startup promising cheap everyday household items catches on, it could wreak havoc on marketing–particularly TV advertising Read Full Story