Would you believe that direct-to-consumer (DTC) marketers, who historically advertised almost exclusively online, are venturing into television — and they’re doing so at a rapid pace?
According to a new reportOpens a new window on national ad spending from ad-buying group Magna Global, DTC marketers grew national TV ad spending in the first half of the year by 52.9%, up from a 35.8% year-on-year increase the previous year.
Interestingly, this is a marked difference from the 32% overall growth in ad spending from DTC marketers for the first half of 2019.
On its face, this uptick in TV ad spend from companies that, as Nat Ives explains in the Wall Street Journal, “made their mark by cutting out middlemen…and using targeted social-media advertising to find customers instead,†might seem peculiar. Especially considering that many in the industry have been predicting the demise of TV advertising for the last decade.
Indeed, as young, digital-first brands increasingly entered the market in recent years, they seemed to upend traditional marketing strategiesOpens a new window . These businesses proved it was possible to get major audience traction that would convert to sales purely by online means.
These start-ups were making the most of their more limited ad budgets, focusing on hyper-targeted digital campaigns that brought the most bang for their buck.
And it worked.
Consequently, many experts have long expected the downfall of many of the ad formats of yore. TV advertising, for instance, has been considered by many as a dated medium outpaced by digital, data-driven competition.
And yet, we’re now seeing digital-native companies that are first and foremost direct-to-consumer turning to television.
Admittedly, in the grand scheme of advertising spend, the amounts being invested by DTC brands in television are negligible. As Vincent Létang, executive vice president of global market intelligence at Magna, explains: “It’s from a low base, obviously, because until three years ago, [DTC companies] were almost 100% digital.â€
Létang, however, also makes the point that growth continues to be strong.
Why you should care
While we may be talking about a small subset — DTC marketers — this is an important trend that warrants attention.
The first takeaway: Digital marketers are seeing opportunities in offline avenues. Taking heed of Ives, as these organizations mature, they’re widening their advertising approach.
He points to “high-profile examples such as Warby Parker and Casper Sleep Inc.,†both of which “have opened stores and begun advertising more broadly.â€
What we’re seeing is that DTC brands that ‘make it’ and are looking to scale need to be creative and find new avenues to target potential customers. While the best place is online, most people are digital consumers these days, so finding ways to engage them outside digital platforms makes sense.
As such, this trend has traditional ad sellers hoping that DTC businesses could turn into new sources of substantial revenue.
The second point marketers should note is the impact digitization is having especially on TV. Ultimately, the shift to data-driven decision-making in TV advertising, buoyed by the number of people buying smart TVs, is converting TV from an outmoded option to a newly digital opportunity that is, in fact, thrivingOpens a new window .
In its expansion, programmatic advertising has reached television. Programmatic TV advertising is now availableOpens a new window and is eliminating the need for educated guesswork and intuition.
Instead, as with so much of the marketing landscape, leveraging data to better target audiences and improve ROI has changed the game for TV advertising.