For every three-person startup selling T-shirts on Instagram, there is another Glossier or Casper building toward becoming a billion-dollar business. How will they get there? To date, direct-to-consumer brands have been focused on sending targeted ads to consumers via premium online video. Now, some major DTC brands are now starting to take their marketing to the next level by using television to reach their target audience. The same data these brands have been leveraging to find audiences in a digital environment can now be used with television advertising. DTC brands are using addressable TV to find, target and send messages to their high-value audience prospects with closed-loop attribution.
Challengers face challenges
Challenger brands are taking market share from more established incumbents, sparking a transformation in retail, and the fragmentation and diffusion of consumers/retail channels runs parallel to the changes in TV audiences. Gone are the days of tens of millions tuning into shows on the Big Three or Four networks. Viewers are harder to reach at scale thanks to expanded television viewing environments (linear, VOD, TV everywhere, connected, OTT, etc.) and the explosion of content.
Now, as the DTC space matures, reaching the right audience on the right digital platform with the right message is getting more expensive. As DTC competition increases, multiple brands are fighting to reach the same audience, digital ad costs are on the rise, and it’s harder and harder to break through to potential customers.
Tactics like influencer marketing and hyper-targeted digital advertising initially won favor with these efficient businesses. Traditional channels like TV advertising were avoided because historically, they were considered effective at delivering ads to broad demographics. It’s rare to see a DTC brand “wasting” precious marketing dollars on a big broadcast ad buy.
But as these brands continue to grow, they are learning some of the earlier DTC go-to tactics (like influencer marketing) are not everything they were cracked up to be, with a loose focus on metrics, too many variables and no deterministic accountability. Luckily, just as these brands are growing and getting smarter, TV is as well.
Precision at scale
Addressable TV offers marketers the ability to find and target precise audiences at scale, with the power of the sight, sound and motion and the brand impact that only television delivers. Data and analytics come together to give DTC brands the ability to extend their precise digital campaigns to a powerful television platform, a far cry from the scattershot approaches of yesterday.
Addressable TV creates a one-to-one connection between brands and consumers with full brand safety built in. Challenger brands are built on the power of their connections with audiences (and customers). They are consumer-first, as well as digital-first, and as a result, all that great data created must be leveraged to generate ROI across all channels. Addressable TV makes a brand’s first-party CRM data work harder as they precisely target desired audiences at the household level and deliver the right brand message to the right people.
Brands that want to grow their scale and reach with precise audiences can now deliver massive results with addressable TV advertising. For example, we saw a DTC brand’s holiday campaign leverage the hard work of their efficient digital programs and sophisticated audience segmentation efforts. They took a first-party audience segment of existing holiday shoppers, precisely targeted them with a TV campaign, and drove a 3:1 return on ad spend. For all campaigns, we can calculate the value of an impression based on the viewing environment.
Addressable TV gives brands visibility into exactly which households were exposed to brand messages, and who took action as a result with deterministic measurement. The path to success for upstarts has been built on using the most efficient marketing strategies to raise awareness, build audiences, drive sales and increase loyalty. Driving that efficiency is confidence in leading-edge, data-driven tactics that are measurable and impactful.
DTC brands can now fully leverage this new data-driven television ecosystem—there are over 90 million households across STB (set-top box) and IP-addressable TV that can be aggregated to send targeted messages to high-value audiences at scale.
And, as consumers move across devices, addressable campaigns can be optimized to ensure the right frequency and maximum efficiency across all screens. Now, every channel, including TV, is accountable to the same metrics that DTC brands were built on. Brands and their consumers have changed, and TV is changing right alongside them.