DTCs' TV Revolution & What the “Old Guard” is Learning from It

**A version of this blog originally appeared in AdExchanger.**

The last few years have been lightning in a bottle for direct-to-consumer (DTC) brands. This growing group of start-ups, upstarts and disruptors have skyrocketed in terms of growth, all while changing the way we, as consumers, buy everything from clothing and beauty products, to home goods and prescription medications. These digital-native brands, with a focus on data and the end-to-end customer experience, are clearly doing something right—and more traditional brands (CPGs, QSRs, insurance providers, etc.) have taken notice.

DTCs demand more out of their buys, prioritizing impression-based measurement and data-driven insights to reach and engage with audiences across platforms and screens. Not only have we seen larger, traditional brands adopt more DTC-like business practices (whether through their own initiatives or via acquisitions), but they have also taken a page out of the DTC media playbook when it comes to cross-platform TV advertising, spanning linear and OTT/CTV. And this makes sense; after all, one of the many things 2020 taught us is that every brand is now an e-commerce brand.

For reasons we know far too well, 2020 was an unprecedented year. With more people at home, watching linear and streaming TV around the clock, brands had to pivot and, essentially, move into e-commerce. When people couldn’t leave home, brands had to engage digitally. So, it’s no surprise that many also pivoted their media strategies, too. Even in the midst of the pandemic, CTV showed signs of growth, increasing by 27% in 2020, and is expected to grow another 40% in 2021. CTV’s growth is a big driver of making all forms of TV advertising tied to impressions, a common currency for DTC digital natives.

For traditional advertisers, TV’s role has long been one of reach and brand building. Now, they are looking to get much more out of it – leveraging video delivered across all screens to drive sales, new customer acquisition and reach extension.

With video becoming heavily consumed over IP channels, data that enables more precise measurement and greater targeting is at the forefront of moving TV forward. From the start, DTCs have demanded that TV provide the real-time analytics, measurement and targeting capabilities they are accustomed to with digital. And now, the industry has finally met them where they are, bringing all forms of TV together and creating an ecosystem where impressions can be the new standard across different TV platforms.

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

In a world where e-commerce 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 > 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” advertisers are accustomed to with traditional TV). Combined with the rise of streaming and addressable, audience-based targeting can become a larger part of TV ad strategies. DTCs have proven 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. But that’s just a part of it. They take those real-time insights and continuously make them actionable to improve reach and performance. They use the learnings to inform optimizations regularly (even on a weekly cadence for some) – whether it’s tweaking creatives, adding or suppressing publishers, adjusting frequency, making smarter day and daypart mixes, fine-tuning audience buys, you name it. DTCs never stop learning and follow the data to ensure TV is consistently an ROI-positive channel, even as viewership trends change and consumers continue to fragment across screens and platforms.

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. In Part 2, we’ll explore how  DTCs, especially as they grow, are increasingly learning from traditional advertisers when it comes to mastering TV for brand building and reach, and how “old-school” methods can become even more valuable when applied in the new data-driven TV era.