Why DTC Brands Are Positioned to Thrive Right Now

With many people still spending the majority of their time at home due to the ongoing COVID-19 pandemic, TV has become the epicenter of day-to-day life. A Comcast study found that homebound audiences are, on average, watching an additional eight hours of content per week (across linear TV and OTT streaming services), while Nielsen has reported that streaming grew to 25% of total TV usage during Q2’2020 alone. Meanwhile, inventory prices have also decreased and consumers are now buying a broader range of products online than ever before. As a result of this, more and more advertisers are pivoting to a more ecommerce-focused model.

Direct-to-consumer (DTC) brands—most of which are digital natives that have increasingly turned to TV advertising to drive performance—are in a strong position to thrive in the current landscape. For example,TVSquared recently analyzed a global, app-based DTC Education Brand. We found  that, even during a global crisis, this advertiser has been undergoing significant growth—across linear, but notably OTT (which was added into its media mix back in early 2020).

Here are a few of the highlights from our findings:

• During the first two months of lockdown (March and April 2020), this brand’s linear TV response increased by +63%, while its OTT performance soared +85%!
• In the wake of COVID-19 (specifically throughout April and May 2020), the brand’s cost per response across OTT services improved by an average of 40%.
• Due to its success with OTT, including strong response rates, the brand is now investing even more heavily in OTT. Specifically, since its initial launch into OTT, the advertiser’s OTT spend has increased by an average of 663%!

While the brand has benefited greatly from incorporating OTT into its media mix, it hasn’t abandoned linear TV. In fact, when OTT is added to linear campaigns, the incremental reach it brings is enormously impactful.

Click here to read the full case study and watch this video to learn even more about key DTC trends during COVID-19.