Why direct-to-consumer brands are spending more on TV advertising

In this oversaturated direct-to-consumer market, it is imperative that companies invest in the right partners to ensure brand growth. Between intense competition and the need to control costs, it’s easy for DTC brands to believe that advertising on TV is beyond their budgets. But increasingly, marketers are discovering TV offers DTC brands expert, customized strategies that are cost-efficient, mindful of ROI—and perfectly in tune with the unique qualities that made these brands stand out in the first place.

Ad Age Studio 30 spoke with Jason Baron, senior vice president of direct marketing for WarnerMedia Ad Sales, who elaborated on the company’s advertising opportunities for DTC brands across multiple platforms and brands including CNN, TNT, TBS, truTV, Adult Swim and Cartoon Network. Baron also touched on the myriad of potential opportunities for more in-depth data and analytics from ongoing collaboration with sister company Xandr.

What are some of the biggest challenges you find with getting DTC brands to embrace TV advertising?

The three steps we use to help direct-to-consumer brands grow their business are discovery and customer acquisition, research and conversions, and awareness, loyalty and perception. No matter what stage they’re in or where they want to advertise, these brands are always looking for performance and driving sales.

Every brand can touch all three or just one. Discovery and acquisition are a part of everything.

Historically, the biggest barrier to entry for a lot of DTC brands has been the higher prices of advertising on TV. We have solutions across the board at WarnerMedia, but some of these brands think national cable might be out of their price range so then they try and go for the cheaper, more efficient CPM, but they’re not getting the quality of the content or the audience. Where DTC brands are going to win is when they’re investing in brands that have quality and premium content, which we can offer. The easy, cheap route is not the long game.

Another challenge—especially on the linear side—is you need time to understand if your brand has been successful. Brands can’t necessarily judge results unless the campaign is running for at least four to six weeks.

What sets WarnerMedia apart from other companies when it comes to direct-to-consumer brands?

Many DTC brands are evolving out of search and social, only now getting into linear television. With WarnerMedia’s assets, we’re bringing a unique approach. We’re not proposing massive multiplatform deals from the get-go. We want to understand where the clients are coming from and where they want to go—whether it’s dipping toes into linear TV, testing an OLV or VOD campaign or executing sponsorships and on-site activations. WarnerMedia is a one-stop shop with a consultative approach, actively listening and understanding where DTC brands are in their journey.

On top of that, we’ve been successfully collaborating with sister company Xandr. We’re excited about all the consumer insights that Xandr can offer to enhance existing advertising offerings.

We’re also leaning into our data, analytics and relevant ad capabilities. We created a product called ResponseNOW, working with a third-party vendor on targeting search lift. While linear TV doesn’t offer attribution, we’ve found that for DTC brands, advertising on TV is an excellent way to reach consumers and drive sales.

What kind of campaigns are DTC brands looking for?

There are different tiers depending on what the brand’s goals are, whether they’re just testing out the waters or whether they’re comfortable spending on TV. Many are thinking more about OTT, especially with platforms like CNN Go, while others are interested in podcasting or OLV or VOD. We take their cue, but ultimately we try to provide the solution that aligns with where the brand is in its trajectory.

Here are just a few examples:

• A top DTC bedding brand is spending across WarnerMedia’s portfolio including CNN, TBS, TNT, truTV, Cartoon Network and Adult Swim. They started with us on linear television, and just recently, they tested digital for a Labor Day campaign. We saw strong results on Cartoon Network, Adult Swim and CNN, which span teen, millennial and 50-plus audiences. This campaign highlighted the relationship between consumers and how they’re spending, and now the DTC brand is launching a big digital and linear campaign for VOD and OLV in time for Black Friday.

• A lot of direct-to-consumer brands are leaning into news and sports as well. For example, a home improvement brand we’re working with has a CNN deal built around the elections. It started in 4Q19 and continues through Super Tuesday, the Republican National Convention, the Democratic National Convention and high-profile political events such as debates or town halls leading to Election Day 2020. The brand’s commercials will air across CNN on all key election-related events on linear, digital, the airport network—everywhere the CNN viewer is engaging with the content.

• A dentistry company has ramped up their portfolio from a linear and digital perspective, buying into high-profile sports like NBA on TNT, ELEAGUE and NBA TV. Plus, they’ve extended across the portfolio on emerging consumer brands like truTV. With the breadth of content across WarnerMedia, our efforts reach every demographic and area of focus that a direct-to-consumer brand wants to hit.

• A men’s health brand has bought into the NCAA tournament and the MLB playoffs. They’re a brand that leans into CNN digital and linear, namely the high-profile CNN events around politics. They’re also a big supporter of podcasts like Bleacher Report’s “The Lefkoe Show.” They now work with us across linear and digital and are investing in audio as well. 

What are the podcasting opportunities you offer?

A lot of DTC brands are interested in the podcasting space. To that end, we take a 360-degree approach to create more impactful cross-platform partnerships.

Our biggest podcasts at present tend to connect to news and sports. A lot of them are original linear programs like “Anderson Cooper 360°” and “The Lead With Jake Tapper,” and we can expect to see this area grow with the launch of CNN’s podcast studio. On HLN, we focus on the murder mystery genre and are launching an original podcast called “Down the Hill” about an unresolved investigation. On the sports side, in addition to “The Lefkoe Show,” Bleacher Report has “Stick to Football.” We’ll continue to see WarnerMedia’s podcast portfolio expand across our family of brands in years to come.

Jason Baron

Jason Baron is senior vice president of direct marketing for WarnerMedia Ad Sales. Within this role, Baron oversees all direct response advertising across WarnerMedia’s portfolio of leading brands, including managing advertising sales for the WarnerMedia Podcast Network. Based in New York, Baron reports to Joe Hogan, executive vice president of sales and marketing, WarnerMedia. Under Baron’s leadership, the company’s direct response division implemented new strategies resulting in significant revenue growth across all categories. By initiating an integration of the direct response teams across linear and digital groups, Baron led the division to double its direct response ad revenue by 2012. Baron joined the company in 1997 as a CNN account executive and held ascending positions before being promoted to senior vice president in 2011. Previously, Baron held sales roles as an assistant and media buyer at Corinthian Media, and as a buyer in account services at Grey Advertising. He received his bachelor’s degree in communications and history from Rutgers University, and lives in New Jersey with his wife and two young daughters.