Why DTC Brands Should Be Shifting Their Marketing Dollars to OTT

Rebecca Lerner
Jan 28 · 3 min read

It’s not an exaggeration to say that DTC brands have turned the retail industry on its head, disrupting traditional tactics by leveraging their digital-savvy upbringings to create unique, innovative marketing strategies that drive first-party consumer relationships and sales. Take Dollar Shave Club for example, which was kickstarted by the now-famous video “Our Blades are F***ing Great”, ultimately leading to the company’s social media superstardom, mass-market penetration, and eventual sale for $1 billion. But as the DTC movement starts grows, penetrating more and more verticals, the marketing strategies are evolving.

While the majority of DTC brands initially relied on social media, search and other traditional digital channels to connect with consumers, many have saturated those audiences and are looking for ways to continue building their audience. TV can be a powerful medium to drive reach and brand exposure. But if they want to continue to capitalize on the digital targeting capabilities that played an integral role in the emergence of the category, there is really only one option: OTT.

OTT + DTC = ❤

Similar to the DTC vertical, OTT has seen explosive growth recently, with ad spend expected to reach $5 billion this year. And OTT shows no signs of slowing down, with recent reports showing that the number of cord-cutting households is expected to grow by 15.5% in 2020 to 25.3 million households. However, as subscription fatigue sets in for consumers, free ad-supported services like Pluto TV and Tubi are becoming increasingly popular.

These ad-supported (AVOD) services present a huge opportunity for advertisers to target consumers based on data, including things like demographics and interests, similar to traditional digital advertising. On OTT brands can recreate the kinds of personalized relationships with consumers that they enjoyed across social platforms by specifically tailoring ads for individual people, and delivering them in an addressable fashion on a one-to-one basis. This creates a better value prop for advertisers, publishers, and consumers.

And while the majority of mainstream brands are also jumping on the OTT bandwagon to reach untapped audiences and deepen relationships with existing customers, digital-savvy DTC brands might very well change the game (like they did on social). The real-time measurement and reporting that OTT provides can result in faster data insights on both audience and performance, allowing marketers to make better, informed decisions.

In order to leverage OTT to its full potential, DTC brands must think about how best to utilize impression metrics in conjunction with other data points like site or in-store visits and ‘point-of-sale’, delivering attribution data to drive future ROI. This sort of closed-loop attribution is critical to understanding customer acquisition costs for “TV” in a similar way they would on traditional digital channels.

The opportunity on OTT is obvious, but marketers need to think outside the box and ask themselves: how can you tailor creative on an individual one-to-one basis? How can you leverage real-time data insights to create an agile approach? How can you pair reporting metrics with additional data sets to track attribution? How can you ensure creative is actionable? And something tells me that DTC brands are going to be the first to crack the code.

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

Technology Marketing & Strategy Professional. Mom. 6th generation Californian. #VikingRiverCruises target demo. NYC.

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.

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