While D2C marketers have been relatively slow to invest in connected TV (CTV), their spend has been creeping up along with recognition of CTV’s targeting and ability to measure online and offline conversions in new ways.
The results of a just-released online survey of 175 D2C and direct-to-business marketers by digital media tech company Digital Remedy and first-party data and insights platform Dynata at the end of 2021 provide a snapshot of their 2022 spending plans and attitudes toward CTV/OTT.
On average, respondents reported dedicating 25% of their first-half 2022 budgets to search and social media, 15% to print, and 12% to digital display (chart above).
But at 10% ($878,000) on average, CTV is more or less on par with other secondary sources: 11% for mobile apps, 9% each for digital out-of-home and digital audio, and 8% for linear TV.
And CTV’s share is a bit larger among D2Cs with larger budgets — up to 12% among those with media budgets over $100,000:
Among marketers that allocated some of their media budgets to CTV/OTT in first-half 2021, 43% said they’ll spend more on those platforms in first-half 2022, versus 3% planning to spend less.
And among those that had no allocation to CTV/OTT, no media budget, or weren’t sure of their budgets yet, 29% said they planned to spend on CTV/OTT sometime in the future.
Nearly 50% of D2C marketers who plan to spend more on CTV/OTT in 2022 said it will be the brand’s first time investing in the space.
What would motivate direct-to-consumer and direct-to-business marketers to increase their CTV investments?
Brand-lift measurement was the most-cited motivator (47%, in a multiple-response question).
“Growing DTC brands that are focused on stimulating brand awareness among key consumers might be persuaded to spend more on CTV/OTT, especially if a media partner could provide measurement insights regarding their campaign,” notes the report.
Other leading motivators: higher-quality OTT inventory (38%), real-time optimization (37%), incremental lift measurement (35%), and real-time channel performance reporting (33%).
Nearly a quarter — 23% each — cited custom KPIs (key performance indicators) and full-funnel attribution. Just 11% said that “nothing” would convince their organizations to increase their OTT/CTV budgets.
At the same time, 42% admitted lack of familiarity with brand-lift measurement, and 48% admitted the same about incrementality measurement.
The researchers point out that while the industry is still dependent on last-touch attribution because of its ease of use, there is growing interest in the incrementality approach — which, rather than assigning credit for a conversion, attempts to identify the causal events or interactions behind conversions. (The goal: Measure the lift in desired outcome that a specific media channel brings to campaign results above native demand — the increase in leads, sales and other key performance indicators/KPIs that would not have occurred without specific marketing efforts and interactions, such as ad views.)
The respondents’ emphasis on brand-lift measurement reflects their key priorities for 2022: increasing brand awareness and sales growth (31% ranked each of these No. 1).
While 23% of D2C marketers say they run more conversion-oriented campaigns than other types, 33% say they run more awareness-focused campaigns, ad 37% say they run an even mix.
But regardless of which types of campaign they run, D2C brands “are laser-focused on marketing investments that can ultimately prove measurable results,” and tuned-in to CTV’s abilities to enable performance insights,” which in addition to brand awareness include KPIs like site traffic, online purchases, account sign-ups and app downloads.
Survey respondents were drawn from Dynata's 67-million pool of B2C and B2B marketers and surveyed through its online panel. All respondents were sole or shared decision-makers for purchasing digital marketing, advertising and/or market research services. Respondents spanned a wide range of product/service categories.