DTC Brands and Television

Direct-to-consumer, or DTC brands, have often taken unconventional paths when it comes to advertising. For example, many utilize Instagram or other social media influencers to promote their product. Recently, DTC brands have started to move away from social media platforms and back towards traditional advertising, such as posters on subway cars and television. Several DTC brands have begun implementing television into their marketing strategy. They believe that it has contributed to sales and web traffic. HelloFresh, a meal preparation delivery service, is just one brand that has utilized television advertising. The brand began buying television spots in 2015. According to David Webb, the group’s director of growth and analytics, the television ads are behind the organization’s 88 percent year-over-year increase in site and app visits. HelloFresh is not the only company with a successful television advertising strategy. Other popular DTC brands, including Stitch Fix, Ancestry, Chewy, and Carvana, have also seen a correlation between spending on television ads and revenue. Television advertising amongst DTC brands is a growing trend. More and more companies are purchasing ads on TV. In 2017, DTC brands spent $1.3 billion on TV ads in 2017, which is $650 million more than they spent during the previous year. The year-over-year increase was 98%! Although television ads are becoming more popular, they are also simply not an option for many smaller DTC brands. TV advertising is costly, and requires longer lead times and for companies to work with a traditional agency that is familiar with this form of marketing. DTC companies who have already purchased television ads, however, argue that it is a very cost-effective method of advertising. Some believe that other groups do not adequately understand the economics of television. Tophatter, a mobile auction app, found that TV ad channels pay off just six to nine months after their launch. Continue reading at https://mattnemer.com/dtc-brands-and-tv/

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Matt Nemer

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Matt Nemer
Chief Financial Officer