DTCs And Traditionals: Learning From Each Other In The New Age Of TV 

"On TV And Video" is a column exploring opportunities and challenges in advanced TV and video.

Today’s column is written by Darren Moore, VP and head of product marketing, TVSquared.

The last few years have been lightning in a bottle for direct-to-consumer (DTC) brands, who are now investing in TV – but demanding more out of their buys. They prioritize impression-based measurement and data-driven insights to reach and engage with audiences across platforms and screens.

DTCs TV revolution & what the “old guard” is learning from it

DTCs take the lead on cross-platform TV strategies, which consist of testing and learning, around-the-clock measurement, regular optimization, audience intelligence and hyper-targeting.

But traditional brands have taken a page out of the DTC media playbook. While traditional advertisers have long seen TV as a vehicle for reach and brand building, now they want much more: leveraging video delivered across screens to drive sales, new customer acquisition and reach extension.

In a world where ecommerce is the norm, what are traditional advertisers learning from DTC brands?

  • To adopt impression-based advertising for linear & streaming: DTCs understand that despite endless debates and industry-wide conversations, a common currency does exist for all forms of TV – the impression. With their TV strategies built on impression-based advertising, DTCs get a consistent view across platforms, understanding how linear, addressable and streaming are working separately and together. This single source of truth for cross-platform TV campaigns not only holds TV accountable in a way it never has before, but it also gives advertisers a deep look into reach and frequency, unique reach and outcomes. And, of course, they are using this information to reallocate impressions across media partners and audiences to drive results.
  • To achieve outcomes – audience intelligence is better than reach: DTCs have proved that with digital, it’s all about finding, reaching and activating the right audiences whenever, wherever and however they consume content. With the advancement of smart TVs, linear ads can be tied directly to the household, delivering an entirely new level of audience intelligence (far beyond the “age and gender intel” most advertisers are accustomed to). Combined with the rise of streaming and addressable, audience-based targeting can become a larger part of TV ad strategies. DTCs proved that driving outcomes or achieving specific KPIs are not tied to mass reach. Rather it’s about using TV’s scale and available data to get in front of the audiences that will drive the best results.
  • To embrace continuous optimization: DTCs approach TV with the belief that every single dollar spent has to work, which is why digital-like measurement is such a core component of their media strategies. They take those real-time insights and continuously make them actionable to improve reach and performance. They use the learnings to inform optimizations regularly, sometimes even weekly – whether it’s tweaking creatives, adding or suppressing publishers, adjusting frequency, making smarter day and daypart mixes or fine-tuning audience buys.

Traditional advertisers are not the only ones taking notes – we’ve seen DTC advertisers take a page out of the traditional TV playbook as well.

DTCs learning from the masters – brand building & reach

As DTCs grow and scale beyond early adopters, they are looking toward more traditional advertisers for ways to leverage TV to build brand awareness and find even more impactful reach-and-frequency strategies.

DTC competition is increasing, customer acquisition is getting harder and acquisition costs are increasing. Because many traditional advertisers (auto brands, brick-and-mortars, etc.) have products that don’t necessarily create easy repeat-purchase opportunities, they have mastered using TV for reach, both to attract new customers and to stay top-of-mind among their existing ones. They know it’s easier to get repeat buyers than to find new ones, even when there is a long gap between purchase cycles.

DTCs, especially, have to balance the need for new customers while creating loyalty with existing ones. Using social media and other digital channels, they have mostly focused on niche, often younger customers. But now, many need to expand beyond their core tactics with audiences and figure out how to get more customers into the funnel.

DTCs are taking on linear TV strategies to gain broader awareness, learning from the experience and scale of traditional advertisers, who have used TV for brand building for generations.

Consider seniors and older consumers, who are driving the shift toward online shopping by adopting new digital behaviors and becoming more tech-adept in the wake of stay-at-home orders and social distancing policies. Ecommerce is becoming part of their routine. As a result, this is an opportunity for DTCs to find new customers via TV, to tell their brand story and extend reach to more audiences in front of the big screen.

Today, analytics allow advertisers to measure reach, reach extension and unique reach from TV channels and platforms just like DTCs have been able to do on digital.

Of course, you can’t talk about reach without frequency.

Frequency capping on TV is hard, especially given the plethora of platforms and screens to exploit. Traditional TV advertisers have had years to finesse their exposure strategies, and DTCs need to do better.

On digital, DTCs found their targets and hit them hard, with the same ad following them for days after that first click, search or abandoned cart. But on TV, that's just not cost effective. Yet, it’s happened to me, particularly on OTT, where I've seen the same ad 40 times in one week. You are either clobbered into submission, or end up with a persistently negative view of a new brand.

Traditional TV advertisers have played the GRP game for years, and are more adept at finding that “sweet spot” between reach and frequency. While GRPs certainly aren’t the answer, DTCs need to be smarter with their brand perception, money and TV data to balance reach and frequency across audiences, screens and platforms to grow beyond their base and yield the best and most profitable outcomes.

Whether you’re a young DTC brand or a decades’ long advertiser, learning from each other can lead to game-changing growth.

Follow TVSquared (@tvsquared) and AdExchanger (@adexchanger) on Twitter.

 

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