Disrupting the traditional retail space, challenger brands - born from the internet and with digital in their DNA - have created a competitive edge by connecting directly to their consumers on a deeper level while cutting out the middleman.
Typically, these direct-to-consumer (or DTC) brands have relied on social media and SEO to reach and acquire new customers as part of their marketing strategy. And while these cost-effective, performance-based marketing tools have proven to be successful, brand marketers are now looking for other ways to grow their business.
With 75% of U.S. households owning connected TVs (CTV) today and with 48% of all U.S. consumers buying from direct brands in 2019 - this is a huge opportunity for digitally-native brands to connect with consumers in ways they’re accustomed to. DTC consumers tend to be digital-first, owning multiple devices and often completing purchases on their mobile phones, tablets or laptops. CTV has become simply another device for this audience - making digital identity resolution a key element in better understanding a consumer’s cross-device journey.
A robust opportunity for DTC brands, connected TVs enable marketers to tap into a new way to understand their audiences, and reach them at the household level through each of their devices, including the emerging CTV device.
The Promise of Relevant and Personalized Content
Relevance is everything for DTC consumers. And as the number of CTV device owners grow, so does the adoption rate of streaming TV offerings and a new wave of inventory. As a result, DTC brands can benefit greatly by advertising on CTV to target and serve personalized ads - capabilities linear TV simply cannot achieve.
For instance, if Blue Apron, a subscription-based meal kit service, decided to deliver ads via CTV, they would have the ability to align their products not just based on a cooking segment or food-related content to a targeted audience, but also rely on their first-party audience data, as well as past exposure via their mobile phone or other digital devices. By leveraging the benefits of a digital cross-device graph, DTC brands have the ability to tap into more efficient and sophisticated cross-device targeting capabilities, while also benefiting from frequency capping, attribution and measurement.
With better informed ad strategies driven by cross-device insights, brands are now able to manage how often they run ads, inclusive of CTV, without wasting media and spend from over-targeting. As a result, brands are able to connect with new and existing consumers at the right time, to the right audience, and with the right content.
Building Brand Awareness
Generating continued brand awareness and customer loyalty can be a challenge for any brand. But as one of the fastest growing channels in advertising, CTV can deliver high-quality, non-skippable ad experiences that guarantee viewability - perfect for building brand awareness.
Meaning, that unlike other channels, CTV is one of those rare platforms where viewers sit through 15-to-30 second ads in their entirety. When coupled with the ability to strategically place ads before and during streaming content, brands can capture consumers when they’re the most engaged. The result: a perfect setup for DTC companies to increase brand awareness and capture viewers who are already in a content consumption mindset.
Marketers already know it’s important to understand high-value consumers across various touchpoints - so CTV provides another screen to target consumers and deliver relevant experiences more effectively. And because DTC shoppers seek out brands that offer value, convenience and choice, brands are equipped to be more successful with personalized ads that are device and medium appropriate.
Extend Audience Reach and Scale
Whether it’s an existing customer to be reactivated, or a prospect who has visited a DTC site, app or exposed to a CTV ad, knowing how to reach these audiences at scale is critical for this group of disruptor brands. Although a prospect may have responded to an ad on their phone, brands can now extend reach and engagement opportunities for that prospect across all digital devices, including CTV.
With more ways to connect with their target audience, brands are enabled to employ a wide variety of marketing tactics, creative and messages tests, and also enable the measurement of effectiveness over time across each of the consumers devices. In a DTC world where return on ad spend and metrics like lifetime value are the lifeblood - enabling efficient and effective reach combined with performance of CTV will fuel current DTC initiatives, and enable the creation of new solutions.
A Real Opportunity for Growth
As more households continue to abandon paid cable services - 27% of households are expected to be “cord cutters” by 2023 - leveraging CTV will enable brands to reach new audiences at scale. It’s important to not just look at these audiences in a silo, but rather as part of a broader view of the customer.
By addressing consumers across content types and devices and taking advantage of the power of CTV, brands enable both top of the funnel brand awareness, and also moves the consumer down the funnel efficiently, creating greater return on investment for DTC advertisers. And, by bringing the advantages of programmatic into the mix, brands are empowered with real-time results to help optimize campaigns faster across consumer touchpoints. The CTV space is poised to become a key contributor to, and influence on, the DTC consumer journey.
Some might say it's the perfect match.
Tapad is a global leader in digital identity resolution solutions. The Tapad Graph connects millions of consumers across billions of devices enabling marketers around the world to maximize campaign effectiveness and drive business results.
