Have you noticed how F1 has gained traction in the past few years? No, I am not referring to Drive to Survive (DTS) on Netflix. That’s just one element of the entire force behind the reinvigorated fan following of F1. It's a smart media strategy and it’s not about making F1 an entertainment company. Liberty Media, an American Fortune 500 company, bought F1 for $4.6 billion in 2017. They have taken the following measures around the sport which act like engagement levers:
Players were given the liberty to post on social media from the race venue or car garages and even the constructors (i.e. Mercedes, Red Bull, Ferrari, etc.). This brought viewers close to the sport in a completely new way.
F1 started posting quality content on YouTube, Instagram, and other platforms and even launched its own Esports Series to promote its own Formula 1 video game. They recently announced the return of F1 to Las Vegas!
Will Buxton, a digital reporter for F1, does a live stream just before the race is about to go down.
A new opening theme song was produced for F1 by Brian Tyler, who is a famous American composer who has given background scores for films like Fast & Furious, Scream, and a lot more movies.
And yeah, DTS on Netflix gave us a sneak peek into the intra-team player rivalries, the politics and the business of the sport.
Since the acquisition of Liberty Media, this is the first time since 1950 that F1 has gained such massive viewership. However, can this revival of an existing entity using media apply to the world of products/services? Thinking further, how about launching a product later once you have a strong media narrative?
What is Linear Commerce?
I came across this term in a newsletter 2PM run by Web Smith. Before we define it, let’s look at two major themes of how a product/service is launched:
Prevalent Commerce: A firm launches a product/service and then spends a marketing budget to push out content, ads and other marketing tactics to bring in a loyal audience that will use their product and give a nice ROI on their spending.
Linear Commerce: Another firm starts a media publication around a relevant topic that brings in a massive audience because of high-quality content. Post this, they launch a product/service based on feedback from this loyal audience, which will not need a mammoth budget to promote as they already have a captive audience in place.
Linear Commerce can be defined as a strategy where you build up a media publication viz. an Instagram page, blog, podcast, newsletter or a YouTube channel that has acquired a sizable amount of audience and then top it off with a flavour of commerce by launching a product, service, a brick and mortar store or something completely new that is driven by what your loyal audience already wants. In some cases, linear commerce takes a different meaning where a product/service company does partnerships with established media outlets to gain traction.
Now, this ties back to something I wrote about the up and coming Creator Economy and how creators can monetize their most loyal fans. You can see a lot of creators that start by amassing a huge audience in a completely organic manner and then start selling merchandise. It does qualify the linear commerce criteria but let’s park those instances aside.
Let’s focus on products, services or anything that is born out of a successful media publication, which is bringing a smarter approach to an existing consumer need, achieving billions in revenue or getting more viewership as we talked about F1 earlier. However, before the product, we need a strong media narrative to launch. The kind of narrative you build through the engagement levers of various media platforms sets the foundation to launch a product/service that gains traction.
Acing the narrative game
The only example of Linear Commerce that comes up time and again in multiple places is Glossier, a skincare & beauty products brand, which is the truest example of a brand using a linear commerce approach.
Emily Weiss started a blog named Into The Gloss while working as a fashion assistant at Vogue in 2010. Because of her fashion world connections, she was able to interview and photograph the medicine cabinet of celebrities like Kim Kardashian and others. This star-studded section called ‘Top Shelf’ on the blog brought in a lot of readers.
Owing to the popularity of this blog, Glossier was launched. It wasn’t just a beauty brand selling through the D2C e-commerce route but had a unique aesthetic philosophy of minimalist beauty. The narrative stood out and it became quite successful. Until there was a dent in the narrative recently and they are receiving flak for it. So, there is a downside to the linear commerce approach if the narrative is not reliable. Media is just a tool that propagates that narrative to the audience.
A linear commerce entity already builds up a loyal audience who believes in the thought leadership of the media they consume. The next step is just to weave a product in a category that is relevant to them and solves a pain point they give a damn about. It's just flipping the status quo and you know a lot more about your audience than companies who have been pushing their offerings through a spray-and-pray approach for decades.
Linear Commerce is just a term but if you look at the strategic approach, I bet we could dig up a lot more examples. Let’s look at one from the early 20th century.
The roots of Linear Commerce
Most of us have heard of the Michelin Star rating that is bestowed upon the best restaurants in the world. A lesser-known fact is that this rating system is an eternal byproduct of the linear commerce approach adopted by Michelin Tires.
An automobile industry boom was happening in the 1900s in France. There were only 3000 passenger cars, a number which rose to millions in a few years. However, at that time the Michelin brothers thought that the automobile market was too small to run a profitable business.
How does a tire brand increase the market size of automobiles in the 1900s? They started looking for ideas to promote the fast-growing automobile industry, convince more people to buy cars and promote their brand too.
They came up with the idea of a travel guide - Michelin Guide. We did not have Google Maps or travel blogs/vlogs back in the 1900s so travel guides were a popular thing to go to far-flung places. There was a growing trend of long-distance tourism at that time due to which quality information about far-away destinations was sought after.
The brothers saw a gap in the quality of information they could provide to motorists compared to other guides existing at that time. They included maps, tire repair and replacement steps, listings of petrol pumps and car mechanics, and listings of suitable restaurants and hotels along the way. It was a successful launch post which they expanded to other countries soon and then the world.
A travel guide was also a form of media in the 1900s. Using this publication, Michelin Tires was able to make long-distance tourism legit to increase their tire sales indirectly and even give birth to a restaurant rating system.
DIY Insurance: An upcoming linear commerce inspired entity in India
Finshots, a newsletter explaining news from the financial world in a very simple language, was launched in August 2019. They have now amassed 5,00,000+ subscribers. This is a lot for a few paragraphs sent to your inbox and is mainly about the financial aspects of topical events like the budget, M&A, foreign policies, IPOs, investing and a lot more. No videos. No Ads. Just substance.
This shows that quality content can captivate an audience with high engagement. And, this audience will want more from you.
They launched Ditto Insurance in February 2021. I don’t fill in my information on random insurance websites because of the fear of getting spammed. Surprisingly, Ditto doesn’t have insurance agents but rather insurance advisors with whom you can talk through what they call the Ditto Hotline. You can set up a spam-free call with one of their advisors or just have a chat on WhatsApp free of charge. It won’t be immediate in most cases because these advisors take only 8 calls/day as compared to 50-100 calls/day taken by a normal salesperson at other companies.[1] They don’t want to be aggressive in their user growth but want it to grow organically.
Why are they taking things slow? Why not start selling insurance by charging a convenience fee? Ditto Hotline is a great tactic to understand insurance buyers in India and their pain points. True convenience is what they want to provide while buying insurance so we would not feel that the convenience fee is not worth it.
The insurance advisors are just taking in-depth interviews of callers, which is what you do in primary research before launching something. This linear commerce approach took to market research where the respondents want to give legit responses because a consumer can only set up a call with Ditto Hotline. That’s a treasure trove of consumer insights that they are using to build a DIY insurance buying service (currently marked as ‘Coming Soon on their website) that could make our experience of buying health insurance more reliable, hassle-free, and even disrupt the existing market of health insurance in India.
Closing Thoughts
The linear commerce approach could come up in newer forms in years to come. This is an unconventional way of building a product/service, which if done right can give you audiences that will be with you even if a new product you launched failed horribly.
The narrative of a composite media publication holds the ship together for them to be able to experiment and launch clutter-breaking products/services.
Did some brand or product come up in your mind that is leveraging the linear commerce approach? Let us know by simply replying to this email or adding a comment.