When Headwinds Get Strong, Innovation Matters

In January, the World Health Organization dealt another blow to the idea that wine – or spirits of any type – were good for your health. Now, while this is an edict that I can’t personally abide, it comes at a difficult time for the industry where, at least in California, tasting room traffic was down 22% in 2023. It’s against these macro-headwinds that new customer acquisition needs to be front and center for any DTC winery endeavor.

Unfortunately, the issue for many wineries is that they rely heavily on tasting room traffic to drive sales and club memberships. Because tasting room interaction is a form of direct selling, it brings significantly higher conversion rates than one can expect in a more traditional measured media / DTC environment, which is the good news. The bad news, of course, is that most folks rely on happenstance or vaguely measurable social efforts (yes, “attribution” is a thing) to drive traffic, which is fine… until it’s not.

In reviewing certain hyperlocal campaigns used around the country, you might be surprised to learn that programmatic audio (no, radio is not dead) is being used as it allows precision-based geotargeting. Now, there are admittedly some FTC hurdles and even state-based rules to overcome, but these campaigns are broad and varied – some with a drive to the winery itself, and some to simply support localized wholesale efforts.

The wineries that are adding radio to their media mix are as varied as say DAOU Vineyards in Paso Robles, CA and Door Peninsula Winery in Sturgeon Bay, WI. The point is not to individually tout radio, but to instead applaud those folks who are willing to test a “surround the consumer” media strategy.

Omnichannel marketing has existed for decades. That said, it seems to me that the wine industry in general is a bit less likely to embrace the strategy for fear of failure because, yes, not every individual channel you test will have an acceptable Return on Ad Spend (ROAS) and/or Customer Acquisition Cost (CAC). That said, what seasoned direct marketers know is that the channels used will actually help lift response rates across channels. In other words, they will aggregate the cost of each channel and the total/aggregated response rates in order to calculate a combined ROAS.

So, think about radio, direct mail, paid social, and geo-fenced digital when you’re thinking about driving your tasting room traffic. In other words, embrace testing and be innovative, because the current headwinds demand it!

by: Jeff Giordano