Why addressable TV is the logical next step for DTC brands

The same data these brands have been leveraging to find audiences in a digital environment can now be used with addressable TV advertising to find, target and send messages to their high-value audience prospects with closed-loop attribution.

Challenger brands face challenges

Challenger brands are sparking a retail transformation, and the fragmentation and diffusion of consumers and retail channels runs parallel to the changes in TV audiences. Times have changed, and tens of millions no longer tune into shows on the big three or four networks. Viewers are harder to reach at scale because of expanded television viewing environments (Linear, VOD, TVE, Connected, OTT, etc.) and more content than ever before.

As the DTC space matures, reaching the right audience on the right digital platform with the right message is getting more expensive. As DTC competition increases, multiple brands are fighting to reach the same audience, digital ad costs are on the rise and it’s getting harder and harder to break through to potential customers.

Tactics like influencer marketing and hyper-targeted digital advertising initially won favor with these efficient businesses. Traditional channels like TV advertising were avoided because historically, they were considered effective only at delivering ads to broad demographics — not highly targeted audiences. It’s rare to see a DTC brand wasting precious marketing dollars on a big broadcast ad buy.

But as these brands continue to grow, they’re learning that some DTC go-to tactics (like influencer marketing) aren’t everything they were cracked up to be, with a loose focus on metrics and too many variables. Luckily, just as these brands are growing and getting smarter, TV is as well.

A one-to-one connection at scale

Addressable TV offers marketers the ability to find and target precise audiences at scale, with the power of sight, sound and motion — not to mention brand impact — that only television delivers. Data and analytics come together to give DTC brands the ability to extend their precise digital campaigns to a powerful television platform, a far cry from the scattershot approaches of yesterday.

Challenger brands are built on the power of their connections with audiences (and customers). They’re consumer-first and digital-first; as a result, they’ve amassed an abundance of rich first-party CRM data. Addressable TV makes that data work harder across channels, precisely targeting desired audiences at the household level and delivering the right brand message to the right people.

Brands that want to grow their scale and reach with precise audiences can now generate massive ROI with addressable TV advertising. For example, we saw a DTC brand’s holiday campaign leverage the hard work of their efficient digital programs and sophisticated audience segmentation efforts. They took a first-party audience segment of existing holiday shoppers, precisely targeted them with a TV campaign, and drove more than three-times higher return on ad spend versus digital. For all campaigns, we can calculate the value of an impression based on the viewing environment.  

Addressable TV gives brands visibility into exactly which households were exposed to brand messages, and who took action as a result with deterministic measurement. The path to success for upstarts has been built on using the most efficient marketing strategies to raise awareness, build audiences, drive sales and increase loyalty. Data-driven tactics that are measurable and impactful will continue driving that efficiency.

There are over 90 million households across STB (set-top-box) and IP addressable TVs that can be aggregated to send targeted messages to high-value audiences at real scale. As consumers move across devices, addressable campaigns can be optimized to ensure the right frequency and maximum efficiency across all screens. Now every channel, including TV, is accountable to the same metrics that DTC brands were built on. Brands and their consumers have changed, and TV is changing right alongside them.