A new study from video advertising software company Telaria and Hulu finds that direct-to-consumer brands can reach consumers effectively via connected TV.
The report, with the ungainly title of “Emerging Alliances: How CTV and DTC Brands are Upending Traditional Paradigms for Performance Minded Marketers,” found that DTC shopper who watch both linear and streaming programming are two time more likely to purchase a product after ad exposure than those with linear TV only.
With TV ad spending fairly flat, networks have been pushing the notion that in order to grow, that hot new direct-to-consumer brands like Peloton and UntuckIt need to supplement their online marketing with broad-reach TV advertising.
At the same time, over-the-top viewing has been growing and technology companies have been rushing in to make buying targeted TV ads easier for media buyers and advertisers.
According to the study, CTV offers “the best of linear TV storytelling and digital performance optimization help marketers reach the right audience with the right message at the right time, all in a brand safe environment.”
The attraction of direct to consumer brands is similar to the appeal of connected TV and getting programming over the top, the report found. New video platforms offer a more relevant consumer experience, whether showcasing a shade of lip gloss or recommending a romantic comedy to watch.
DTC brands curate streamlined product lines and tailor brand interactions based on first party insights, the report noted. Streaming services invest in content they know resonates with their viewers and the advertising follows suit, both contextually and demographically.
The combination produced more effective advertising. “After seeing CTV ads, DTV shoppers were 60% more likely to seek out more information, three times more likely to purchase the product. And two times as many DTC shoppers found CTV ads more relevant than linear TV,’ the report said.
“To date, direct-to-consumer companies have been remarkably successful in developing brand identity in an accelerated window, while simultaneously driving conversion. But they have outgrown banner ads and sponsored posts on social media. With optimization in their DNA, they are ready to tell their story on the big screen that sits in their target audience’s living room,” said Jennifer Catto, CMO at Telaria. “CTV fosters premium brand experiences through TV’s sight, sound, and motion, but is accountable to perhaps more modest budgets through digital’s measurable, data and decisioning outcomes.”
The study was conducted by Radius-Global, which conducted 20 minute online surveys of 1,563 consumers between the ages of 22 and 53 who watched at least seven hour of TV per week from Feb. 20 to Feb. 23, 2019. Telaria also conducted one-to-one qualitative interviews with DTC shoppers on the shopping an TV viewing habits.