Why DTC Brands Are Branching Out To OTT

Rebecca Lerner
Nov 12, 2019 · 4 min read

This article was originally published on MediaPost, on October 28, 2019.

It’s challenging to reach consumers in today’s increasingly fragmented media landscape. It’s not enough to just be fluent on a singular platform. For a brand to become a household name, a holistic, multi-platform marketing strategy is essential.

This is particularly reflective in the emerging direct-to-consumer (DTC) market, where brands are branching out to TV to grow both reach and revenue. A recent report from iSpot.tv uncovered that 167 DTC brands spent an estimated $1.7B on TV advertising in the first half of 2019, which was a 15.3% increase from the same period in 2018. TV is already drawing top advertisers in the category like Warby Parker, Casper, Booking.com and Wayfair.

Social media has been the road to superstardom for many DTC brands. Most of them are digitally native and many have created huge viral sensations, like Dollar Shave Club’s now infamous video “Our Blades are F***ing Great”. Social media allowed them to effectively target customers most likely to be interested in their products, develop a following and drive fast growth. But many DTC brands are now looking for ways to continue that blazing fast growth by reaching new audiences, especially in places where they still don’t have a major presence.

TV + Targeting = Growth

TV is a prime platform for brands to get in front of massive audiences, allowing them to establish relevance in the minds of consumers. TV is also particularly complementary to direct response advertising on social media, which is most effective when consumers are at the point of purchase. Digital advertising, like on social media, helps add more touchpoints to TV advertising, and television ads lend credibility and scale to digital advertising. Running a TV ad can help improve open rates on emails, increase the response to Instagram ads, and reinforce the brand’s message.

Smart marketers are now combining TV’s traditional advantages of broad reach and engagement with digital savvy to segment, test, and re-engage audiences. Television should be a key component of any advertising campaign and with the growth of streaming services, television is now able to drill down to find the perfect customer while retaining the ability to scale, optimize, and influence all marketing channels.

Traditional linear TV can be expensive for up-and-coming DTC brands. OTT, on the other hand, not only provides the ability to precision target desirable audiences, it is also far more affordable than linear making it a natural fit for many DTC brands. With the lower price tags come lower customer acquisition costs — and unlike linear, OTT allows for true ROI analysis and attribution at point-of-sale. Additionally, OTT is typically showing completion rates in the high 90th percentile, and a recent study found that 72% of viewers recall ads, with 40% saying they paused a show to learn more about a product or service.

A Focused Approach To Local

As some larger DTC brands dip into the brick-and-mortar retail game, local OTT campaigns and precision targeting can play an integral role in driving new customers into local retail locations. By strategically targeting new customers with OTT in micro communities with dynamic creative — or extending their linear campaigns with OTT reach-extension — brands can not only drive awareness, but can also give openings a boost and promote sales or product launches.

Similar to its targeting capabilities, OTT also provides granular measurement and reporting. When these metrics are leveraged in conjunction with point-of-sale data, they can track attribution directly back to in-store visits. This kind of closed loop attribution isn’t possible with traditional TV, but is critical to understanding customer acquisition costs in the same way they would in an entirely digital customer journey. For digitally native DTC brands and marketers who rely on data to drive informed decisions, these types of insights will paint a much more valuable picture of their TV advertising campaigns.

According to Accenture, 87% of people use a second screen while they watch TV — so the opportunity is ripe for cross-screen engagement. Sure, there is fragmentation in the media landscape. But by taking a holistic approach, DTC brands can not only make more meaningful connections to consumers, they can also build on the targeted, data driven approach with TV that they perfected with social media. For the digital savvy marketers behind many of the forward thinking DTC brands linear will be a great first stop but OTT provides a similar granularity to digital, delivering the meaningful campaign metrics needed to prove success.

MadHive

MadHive is an end-to-end advanced advertising solution for digital video that leverages cryptography, blockchain, and AI to optimize business outcomes and deliver evidence-based accountability. Learn more at www.madhive.com.

Rebecca Lerner

Written by

VP Marketing @ MadHive. Mom. 6th generation Californian. #VikingRiverCruises target demo.

MadHive

MadHive

MadHive is an end-to-end advanced advertising solution for digital video that leverages cryptography, blockchain, and AI to optimize business outcomes and deliver evidence-based accountability. Learn more at www.madhive.com.

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade