Reflecting on the marketing strategy

As its new funding round approached, the founder of Hubble, a subscription based, social media fuelled, direct-to-consumer (DTC) brand of contact lenses, are reflecting on the marketing strategy that have taken them to their current run rate and debating changes to them that will allow them to exponentially grow.

1. Evaluate Hubble’s current business model. Would you invest in their current fundraising round? Why or why not? What excites you and what worries you about the company at this point in its development?

2. How efficiently does Hubble acquire and retain customers? What do they do well and what needs improvement?

3. Assess how Hubble has used owned, earned, and paid media. What needs to change as the company scales? Why?

4. What is the role of offline and online advertising in acquiring Hubble customers? Evaluate the following decision facing Hubble regarding online versus offline media allocation:

a. As of April 2018, Hubble is allocating 78% of its paid media spend to online advertising and 22% to traditional channels (i.e., TV, radio, podcast, and direct mail). Is this budget allocation between online and offline appropriate and if not, how would you adjust it?

b. Based on the results of the TV campaigns, would you recommend that Hubble switch some of its spending to TV? Why or why not? How much?

c. Should Hubble continue to spend the bulk of its budget on reaching new consumers or reallocate some of that spending to retarget those who have already been exposed to its ads? Why?

5. As Hubble prepares to scale its business following its upcoming fundraise, how should they allocate capital across the following decisions? Which, if any, would you prioritise in the short term?

a. Should Hubble expand its product line?

b. Should Hubble move beyond DTC? If so, should it open its own flagship stores, sell via a wholesale model through retailers, or create a reseller option for opticians?

c. Should Hubble expand internationally or focus on its business at home in the U.S.?

d. How do each of these scaling decisions impact Hubble’s integrated marketing communication strategy?

Note: 1) As the footnote of Exhibit 9 of the case suggests, assume that the monthly media budget averages $1.5m dollars and that the average CAC has been running around $100. For simplicity assume these estimates will remain valid for all of 2017 and 2018.

2) For those interested in reading the full New York Times article about Facebook’s algorithm (of which excerpts appear in Exhibit 8 of the case), here is the link: https://www.nytimes.com/2017/11/02/magazine/how-facebooks-oracular-algorithm-determines-the-fates-of-start-ups.html

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