Commentary

As DTC Brands Flock To OTT, They Must Reframe Ad Strategies

There are now over 400 direct-to-consumer (DTC) brands that have collectively raised $3 billion in capital since 2012, according to an Inc.article.  These DTC brands have built and sustained successful businesses largely through social media advertising on platforms like Instagram and Facebook, but that’s now changing.

There’s more competition than ever among both DTC and large brands, and social media platforms, with their ever-changing algorithms that hurt viewability and deplete brands financially with diminishing returns.

Now, the very DTC brands that once found success on social are scrambling to more traditional media to find their audiences — including traditional and connected TV.

However, we’re quickly seeing that when you move a social-media strategy to streaming television, the ad strategy needs a new framework.

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The Creative Challenge for OTT

What’s made DTC brands successful on social media is the rapid iteration of creative that’s highly tailored to their customers. As consumers interact and share content, the platforms collect first-party data that goes back to the brand, helping it refine and produce more creative quickly.

15- and 30-second TV ad spots, on the other hand, have been traditionally resource-heavy in both cost and creative bandwidth — which ultimately reduces the scale at which brands can release these types of ads.

And while DTC brands seek to use connected TV and OTT to reach their target socially media- savvy Gen X, millennials, and Gen Z, these audiences are the very people cutting cords the most and subscribing to streaming, specifically circumventing traditional media’s rising costs and ad loads.

Tailor Creative to Your Audience and the Platform

DTC brands will need to develop creative that replicates the one-to-one relationships they had on social. A few one-size-fits-all commercials that typically run on traditional television won’t work because they directly contradict the basic philosophy that many DTC brands use to market their brands, one that relies on the tenets of individuality, customization, and hyper-relevance.

OTT is fertile ground for this, but if DTC brands want to stand out in the streaming era, their advertising needs to be integrated more into the content and be data-driven so it’s tailored to the individual viewing experience.

Make Commercials Actionable

The DTC model relies on action, whether that’s user-generated promotions of the brand or direct sign-ups and sales. The goal is to shorten the distance between awareness and purchase, but that’s infinitely harder when ads disrupt a user’s viewing experience and don’t provide easy ways to take a next step in the buyer’s journey.

How can DTC brands make their ads actionable in an OTT environment, particularly at a time when users live in a state of partial attention and admit to using multiple screens while they watch media? The key is creating an ad strategy that capitalizes on this behavior and prompts the viewer to action.

Leverage OTT for Data & Feedback Loops

DTC brands get constant feedback on their social media campaigns performance and user data, and they’ll need that same insight to compete on streaming platforms. How do you get that same level of insight within OTT? While traditional TV spots are purchased on a broad GRP, brands who use programmatic OTT solutions will find access to tighter and more granular targeting and subsequently faster data insights on both audience and performance.

Brands that can navigate their social-media strategy thoughtfully into streaming television will thrive in the quickly converging OTT space.

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