Born online, and with a conversion-first focus, direct-to-consumer brands rarely elect television as an advertising channel. Though many of those brands have experienced soaring video engagement via digital platforms, they have been hesitant to apply that tactic to television. Many DTC brands have not yet needed to engage with TV; they have been able to build successful sales models without it. Objections range from the common belief that television viewership has plummeted—particularly among younger generations—to the theory that even people who do watch TV tend to skip all of the commercials. Finally, DTC brands shy away from TV on philosophical grounds: how can a brand born from a direct connection to consumers benefit from going old-school with TV? In my experience growing great DTC brands, TV is far from old-school lackluster, it should be a part of the marketing mix for the companies seeking to push past plateaus and towards scale. As we see stagnation become a part of the DTC brand lifecycle, television can deliver the reach and expanded touchpoints that extend and invigorate DTC brands.
MYTH: “NO ONE IS WATCHING TV ANYMORE”
DTC brands have grown up using digital channels that offer clear, typically last-click, attribution models. Shifting toward new media formats with KPIs such as brand awareness can be extremely unsettling. Yet those same digital channels are limiting, and brands need to go bigger in order to reach new audiences. TV allows brands to meet consumers where they are spending significant time. Yes, digital video consumption is trending upward, but linear television is still the most-used electronic platform for U.S. adults and, furthermore, is where the most video content is consumed, across generations. 96% of the U.S. population has TV access, as compared to 73% with broadband. As consumers watch more video than ever, brands would be wise to embrace this tactic in all of its forms. In their paper, Media in Focus—Marketing Effectiveness in the Digital Era, Les Binet and Peter Field write, “TV is still the most important video format, accounting for around three quarters of all viewing, and most TV is still watched live,” and further note, “TV is still much the best medium for driving market share, and this matters because…market share is the most important business metric as far as profit is concerned.”
MYTH: “EVERYONE SKIPS THE COMMERCIALS”
Millennials, in particular, are a distracted audience; double screening is very much a part of their TV activity. Due to this, in part, campaigns that leverage video across all formats perform best. Multiple devices aside, Nielsen reports that during primetime programs, Millennials were the least likely to change the channel during commercials. That said, yes—a certain amount of ad skipping occurs, an activity that mutes advertising, much like ad blockers work online. As a prevention measure, networks are working through new ways to protect vital ad dollars. Some are slashing up to 50% of commercial time, cutting clutter and focusing on a sustainable model for quality storytelling that attracts all types of consumers.
TAKING THE LEAP: SUCCESS STORIES
Certain DTC brands are leaping into TV advertising—and the resulting growth has been exciting. The companies that have received investment and are seeking broader growth helped drive a 60% increase in TV media spend in 2018, as compared to the year prior. At-home cycling and workout solution Peloton doubled sales after raising TV spend to $161.3M; pet-supply retailer Chewy also increased its TV media spend to a comparable level to that of Peloton. June 2019 was a monumental month for both companies, with the latter going public and the former confidentially filing for an initial public offering.
Other DTC brands have also seen success with TV spend and are, unsurprisingly, working hard to improve television as an attributable source. Though much more expensive and in its infancy, addressable TV offers enhanced targeting and impact. Essentially, many of the personalization benefits provided by digital platforms will be possible for TV advertisers, too. Lingerie-disruptor and DTC brand ThirdLove already has addressable TV in its marketing mix and expects higher conversions from those ads.
In summary, television still dominates consumer attention and time. And while they must adapt, networks will not allow the medium—or its advertisers—to fold to digital. Television enables DTC brands to scale past exhausted audiences, spark awareness, and bring stories to life on a mass-market level.
If you are interested in refining your brand’s marketing mix and strategy, reach out to Stella Rising today. With deep consumer insight and experience igniting disruptor brands, we can drive audience and revenue growth for your company.