Over-the-top (OTT) ad spend is on track to reach $5 billion by 2020, with the digital-esque targeting capabilities, granular campaign reporting and low-cost linear alternative attracting a wider variety of brands than traditional TV. These features are helping advertisers — big and small — ensure they are delivering the right messages to the right people while mapping tangible business outcomes and ROI to campaigns. And one vertical that is starting to invest heavily is DTC, thanks to the striking similarities to traditional digital advertising.
It’s no secret that many DTC brand’s claim to fame is forward-thinking social campaigns — just look at Dollar Shave Club’s now-famous video, “Our Blades are F***ing Great”. Most DTC brands are digitally native and social media allowed them to effectively target customers most likely to be interested in their products, while simultaneously developing a following and driving fast growth. But social only goes so far, and many DTC brands have saturated those audiences and are looking for ways to expand into additional markets.
Hundreds of DTC brands like Warby Parker, Casper and Wayfair are already spending billions of dollars on linear TV every year, but with OTT offering the same digital capabilities that sparked the first DTC surge, something tells me they will find their home on streaming TV.
Digital TV And The Future Of DTC Brands
Traditional linear TV has played an integral role in helping advertisers get in front of massive audiences, allowing brands to establish credibility in the minds of consumers. But the emergence of OTT is enabling advertisers to establish that same reach and credibility while transcending traditional audience-based TV buys.
OTT allows advertisers to purchase inventory based on granular consumer data, including things like demographics and interests, similar to traditional digital advertising. Digital TV also enables brands to specifically tailor individual ads for individual people and deliver them in an addressable fashion on a one-to-one basis, creating a better value prop for advertisers, publishers, and consumers. And for digital-savvy DTC brands, this is a huge opportunity to create new relationships with untapped audiences, while deepening relationships with existing customers by adding additional touch points.
Not to mention, linear TV can be expensive for emerging/DTC brands. And in addition to these precision targeting capabilities, OTT is also more affordable than linear, making it a natural fit for many DTC brands. Additionally, OTT still drives the same effectiveness of traditional TV, with a recent study showing that 72% of viewers recall ads, with 40% saying they paused a show to learn more about a product or service.
Measurement That Matters
OTT also provides detailed campaign measurement and reporting, including impression metrics that can be leveraged in conjunction with point-of-sale data, in order to track attribution directly back to in-store visits. This sort of closed-loop attribution isn’t possible with linear TV, but it is critical to understanding customer acquisition costs in the same way they would in an entirely digital customer journey.
For the digital-savvy marketers behind many of the forward-thinking DTC brands linear will be a great first stop, but OTT provides a similar granularity to digital, delivering the meaningful campaign metrics needed to prove success. This will allow marketers to drive informed decisions, with insights that will paint a much more valuable picture of their TV advertising campaigns, and work in conjunction with social media.
Rebecca Lerner is Executive Vice President at MadHive, an end-to-end advanced advertising solution for digital video that leverages cryptography, blockchain and AI to deliver evidence-based business outcomes. MadHive’s next-generation advertising suite delivers precision targeting, audience verification, as well as the first OTT-first device graph and cross-device attribution, while addressing the biggest threats to the advertising industry — the issues of trust, transparency, fraud and brand safety.