How Industry Disruptors Rewrote the Marketing Playbook
In the digital age, a new genre of businesses known as direct-to-consumer (DTC) brands challenge the notion of what it takes to be a success. These “disruptors” prioritize low-cost options to deliver high-quality products to their audience and their marketing is no exception, connecting with the consumer in a personal way [while keeping a tight marketing budget]. Here’s how DTC brands have used marketing in a way that aligns with their non-traditional business model and how that strategy has evolved with ever-advancing technology in the TV space.
Why DTC Brands Rewrote Their Media Strategies
Lower Cost of Entry
Direct-to-consumer brands build their media strategy on the foundation of cost-effectiveness. Many DTC brands rely on digital-heavy ad strategies, since it generally costs a fraction of a TV campaign. However, with the fragmentation of content platforms, the cost of entry for TV advertising has significantly decreased, making it more accessible to marketing budgets. And DTC brands took notice. In 2019 alone, two-thirds of new advertisers in the national TV ad space were DTC brands. This sector of the market invested over $425 million on TV between 4Q 2018 and 4Q 2019.
Lower cost of entry aided this growth, allowing newer, smaller DTC brands to enter the space. For more established DTC brands, they reached this level of maturity in marketing by allowing their business to grow organically through their original advertising model. The DTC model establishes a consumer base online, then as their marketing budget allows, they grow into the podcast and satellite radio space. This jump is a crucial step in brand exposure for smaller DTC companies as it expands their consumer base to a larger demographic, providing the means to mature into TV advertising.
Once in the TV space, the attribution metrics for website visits speak for themselves. DTC brands at all investment levels saw double-digit traffic increases on their website when their first TV ad spot launched, with an immediate surge of 56% in monthly unique visits during the initial campaign’s launch month. Throughout the run of a debut TV ad, monthly unique visits grew on average 85% from the TV launch through January 2020. For those who invested the most money in this medium, over $10 million in ad spend, they saw their website visits triple.
The Advent of TV Audience Targeting
Plus, for the first time in linear TV advertising, brands can use data-driven strategies to target and reach their consumer bases. Tapping into anonymous user data, brands can target audiences on a household basis with demographic markers and then deliver the most relevant content to their screen.
As DTC companies mature and outgrow their social media-focused strategies, they are also jumping to TV to expand relevance and conversion. Adults 18 and older watch, on average, 5 ½ hours of video daily, 80% of which is viewed on a TV. In short, TV is still king, and its data-driven linear capabilities now bring it up to the targeting standards that the digital space long ruled.
Multiscreen Advertising Strategy
For DTC brands, however, the combination of targeting and cost-friendly entry for data-driven linear TV won’t wholly shift them away from the digital sphere. Instead, it will help them create a more holistic marketing campaign with the help of platforms like NYI’s Audience One. When TV and digital work together, brands typically see a 60% increase in ROI, and TV also increases online brand searches by 80%. As they did with the dawn of digital advertising, DTC companies are disrupting their status quo once again by returning to a more traditional advertising medium and molding it to fit within their new business model.