How 2 very different DTC startups balance paid and organic marketing

Digital Marketing Redux // May 26, 2026 How 2 very different DTC startups balance paid and organic marketing By Julia Waldow Diana Paulson Made-to-order rug brand Ernesta and pet-tracker Tractive are both emerging direct-to-consumer companies. But each has a unique challenge, when it comes to navigating paid and organic marketing.

Ernesta, which was founded in 2022, is operating in a crowded and high-consideration category, with “many, many companies that sell rugs,” said Alan Smith, the brand’s president.

Meanwhile, Tractive, which was founded in 2012 and runs on subscriptions, has been fighting for larger category awareness for years, said Andrew Bleiman, evp of North America for Tractive. “Ninety-five percent of pet owners in the United States do not know the category of GPS trackers exists,” he said. “We face this huge challenge.”

Both Ernesta and Tractive are trying to boost their customer bases and grow their businesses at a time of larger macroeconomic uncertainty. Consumer confidence in the U. S. hit a record low in May amid the U. S. -Iran conflict, and higher gas prices could deter some shoppers from making discretionary purchases, like home decor.

At the same time, marketing costs are skyrocketing, making reaching customers at various points in the conversion cycle more difficult. Smith and Bleiman, offering two different playbooks, shared how they’re approaching marketing spend during a May 21 panel session at The Lead, moderated by Modern Retail.

Ernesta, for its part, finds that it can take “a long time” to convert a customer, Smith shared. Ernesta sells custom-sized rugs — both through its online website, as well as its soon-to-be 15 stores — and knows that people aren’t buying rugs every day.

Oftentimes, customers want to speak with Ernesta’s design assistants, receive samples at home and consult virtual sizing guides. Ernesta’s rugs typically run from $300 to over $2,000, depending on size and material. In a competitive category like rugs, maintaining margins can be difficult, Smith acknowledged. “You kind of have two choices,” he said.

“You could race to the bottom, offer a cheap product, do a lot of performance marketing that maybe isn’t incremental and feel like you’re competing.

Or, you could do the opposite, which is, you could build a brand, think about the future customer, keep your prices competitive … and [reach] that customer that is going to be in the market in six months, as opposed to being forced to buy tomorrow.” Following the second path, Smith said, is “how we win long-term.”

To that end, Ernesta has dabbled in both paid and organic marketing, but leaned more toward organic marketing in recent years. It does work with creators, many of whom are interior designers, to show off how its rugs work and be “more educational,” Smith said.

Ernesta’s products are different sizes and made to order, so it isn’t a brand that can really “sell [rugs] en masse and give those out [to creators] for free,” Smith shared. It can be a challenge, Smith said, to cater to both interior designers and everyday consumers, when it comes to content.

The first group, he said, “is working for their clients and trying to run their own business.” The second, he said, “just kind of wants the end product.” Both care about design, but may have different motivations, Smith said. Therefore, Ernesta has made sure to diversify its marketing strategy beyond creators alone, including holding events at its stores.

While Ernesta operates in a category driven by infrequent purchases, Tractive is the opposite. It sells a device that attaches to a pet’s collar — with a SIM card inside — and separately sells a software subscription ranging from $5 a month to $10 a month.

Tractive says its subscription plan is necessary for accessing functions like heart rate monitoring, geofencing and weekly health reports. Using Tractive’s app, customers can track their pet’s location, heart rate, activity and sleep. The brand never sells the device and subscription together, so as to have higher margins.

On its website, Tractive prompts shoppers to choose a subscription plan after checkout, offering a 1-year, 2-year and 5-year plan. “Every dollar we make on the device itself, from a company valuation perspective, is worth $1,” Bleiman said. “Every dollar we make on a subscription is worth at least $4.”

Still, marketing a subscription product can be challenging, Bleiman shared. “You find yourself in the sticky situation of trying to sing the praise of your product, while also screaming about the fact that you’re going to have to pay for it, perpetually,” he said. Tractive’s sweet spot is at the bottom of the funnel, Bleiman said. “