Commentary

Why D2C Brands Are Branching Out To OTT

Social media has been the road for superstardom for many D2C brands. Most are digitally native, with some huge viral sensations, like Dollar Shave Club’s now-famous video “Our Blades are F***ing Great."

Social media allowed Dollar to effectively target customers most likely to be interested in its products, develop a following and drive fast growth.

But many D2C brands are now looking for ways to continue that blazing fast growth by reaching new audiences, especially in places where they still don’t have a major presence.

TV + Targeting = Growth

TV is a prime platform for brands to get in front of massive audiences, allowing them to establish relevance in the minds of consumers. TV is also  particularly complementary to direct-response advertising on social media, which is most effective when consumers are at the point of purchase.

Digital advertising, like on social media, helps add more touchpoints to TV advertising, and television ads lend credibility and scale to digital advertising. Running a TV ad can help improve open rates on emails, increase the response to Instagram ads, and reinforce the brand’s message.

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Smart marketers are now combining TV’s traditional advantages of broad reach and engagement with digital savvy to segment, test, and re-engage audiences.

Television should be a key component of any advertising campaign and with the growth of streaming services that run ads, television is now able to drill down to find the perfect customer while retaining the ability to scale, optimize, and influence all marketing channels.

Traditional linear TV can be expensive for up-and-coming D2C brands.  OTT (streaming video ) on the other hand, not only provides the ability to precision-target desirable audiences, it is also far more affordable than linear, making it a natural fit for many D2C brands.

With the lower price tags come lower customer acquisition costs — and unlike linear, OTT allows for true ROI analysis and attribution at point-of-sale. Additionally, OTT typically shows completion rates in the high 90th percentile, and a recent OpenX study found 72% of viewers recall ads, with 40% saying they paused a show to learn more about a product or service.

A Focused Approach To Local

As some larger D2C brands dip into the brick-and-mortar retail game, local OTT campaigns and precision targeting can play an integral role in driving new customers into local retail locations.

By strategically targeting new customers with OTT in micro communities with dynamic creative — or extending their linear campaigns with OTT reach-extension — brands can not only drive awareness, but can also give openings a boost and promote sales or product launches.

Similar to its targeting capabilities, OTT also provides granular measurement and reporting. When these metrics are leveraged in conjunction with point-of-sale data, they can track attribution directly back to in-store visits. This kind of closed loop attribution isn’t possible with traditional TV, but is critical to understanding customer acquisition costs in the same way they would in an entirely digital customer journey.

For digitally native D2C brands and marketers who rely on data to drive informed decisions, these types of insights will paint a much more valuable  picture of their TV advertising campaigns.

According to an Accenture study, 87% of people use a second screen while they watch TV, so the opportunity is ripe for cross-screen engagement.

Sure, there is fragmentation in the media landscape. But by taking a holistic approach, D2C brands can not only make more meaningful connections to consumers, they can also build on the targeted, data-driven approach with TV that they perfected with social media.

2 comments about "Why D2C Brands Are Branching Out To OTT".
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  1. Ron Kurtz from American Affluence Research Center, October 28, 2019 at 4:34 p.m.

    I wonder how OTT compares to direct mail for being able to target a highly defined market segment effectively and cost efficiently. 

  2. Ed Papazian from Media Dynamics Inc, October 28, 2019 at 6:13 p.m.

    Rebecca, I happen to believe that OTT advertising has many positives---especially very high viewer attention to ads as demonstrated by a recent TVision analysis using eye tracking sensors. However, the reason why the costs are lower for OTT is because the audiences are much smaller than for many linear TV venues. I believe that in terms of eyeballs, OTT's CPMs are usually a good deal higher than many linear TV buys---which is fine if it does a better job of targeting. Also, the actual incidence of second screen usage for linear TV per commercial  "exposure" is not even close to that 87% figure cited.

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