Jul 25, 2019

By Nicole Bitette
“The more human stories we see revolving around DTC companies, the more we start to see them as a new generation of trusted, mass-market brands.”

The latest tactic embraced by direct-to-consumer (DTC) brands that want to add to their advertising arsenal is rather old school: television.

A recent VAB report indicates they invested nearly $4 billion in TV ads last year, a 60% increase year-over-year.  For many, its a first foray into the market, as they relied on digital and social media advertising to target younger and digitally native consumers.

To spotlight the trend and illustrate the efficacy of TV advertising, VAB teamed up with Viacom’s in-house agency, Velocity, to produce a series of ad spots featuring Touch Of Modern's CEO Jerry Hum and Peloton’s CEO John Foley. The ads are running across OTT, VOD, online video platforms, as well as more than 60 national and local TV networks.

Chris Carlson, SVP creative director of Velocity, said they chose a human-centered approach for the ads because digital-first brands often feel lifeless. “We felt that seeing and hearing from the leaders of the companies helped humanize their companies and made them feel more relatable,” he explains. “VAB had already done the hard work in researching which companies had great stories to tell and people in charge, so it made it easy for us to work alongside the brands.”

 

“Our partners at Velocity did a great job of understanding the underlying strategy and were inspired by the stats that we were able to share about how enormous this surge of ad spend was from these DTC brands,” says VAB president and CEO Sean Cunningham. “Being able to elicit genuine, really just truthful human responses from founders is one of [Velocity's] great talents.”

Creating a New Generation of Trusted, Mass-Market Brands With TV

“When we started with television it was just an experiment,” says Hum in one of the spots. “Very quickly it ended up being the biggest portion of our marketing spend.”

Hum's story is illustrative of why DTC startups invest in TV advertising, which offers greater reach and awareness compared to digital inventory. This is particularly important to new brands, and helps to explain why brands that didn’t exist five or six years ago are now pouring millions into TV, according to Cunningham. Some newer companies are investing as much as $100 million into TV right from the start.

Carlson adds that TV is a “critical plateau” where brands can launch into a new category and the mass market will instantly perceive them as famous.

“You can smartly target core consumers all day long, but when it feels like the brand is everywhere and everyone is talking about it there forms a critical mass heading toward brand legitimacy that goes beyond any academic approach and moreso starts to enter the wider public consciousness,” he says. “The more human stories we see revolving around DTC companies, the more we start to see them as a new generation of trusted, mass-market brands.”

 

Another reason for the DTC movement to TV is the expansion of advanced advertising technology and capabilities. In other words, linear TV can offer targeting and reporting that's comparable to that of digital platforms.

“The difference now is we have the data,” Cunningham explains. “What all those DTC companies have in common is at their roots, they're data and analytics companies first.”

As TV companies approach the end of their fiscal years, Cunningham says they will see “exponential rewards” in both the near and long term mainly due to their investment in data tools and data science, which he says is already paying off.

“If I were advising another company, I’d tell them to test TV out,” Hum quips. “As a competitor, I’d tell them not to.”