Direct-to-consumer (DTC) brands burst on the scene using two main marketing channels to build engaged audiences and sell products: search and social. But as time passed, those channels have become crowded with competitors, and DTC marketers have begun to examine how emerging avenues like connected TV can give them an edge.
“Search and social have been hacked,” said Miles Fisher, senior director of ad platform sales and strategy at Roku. “CTV has not been hacked yet and whichever brand figures that out first at scale will be looked upon the way we talk about Allbirds or Warby Parker winning that first DTC wave.”
Fisher’s comments came at a panel discussion at the Grow NY conference alongside Joe Anhalt, vice president of growth and marketing at DTC luxury shoe company Koio. They explained the top considerations for DTC brands as they examine how CTV would fit into their marketing strategies.
Here are five takeaways from their discussion.
Streaming TV ads help brands connect with people who are difficult to reach on search or social — platforms that are oversaturated with competitor ads. Relying only on search and social means you’re missing segments of the country.
“Google and Facebook are amazing machines but there’s an inherent coastal bias and a lack of reach for certain segments,” Fisher explained. “Roku over indexes for audiences in middle America and for demographics that are getting older.”
Furthermore, a number of factors have made streaming — and streaming ads — more accessible than ever. TVs are affordable, and a growing number of streaming services offer free content. This has created a groundswell of new streaming audiences and resulting new opportunities for brands.
Anhalt explained that Koio is now considering CTV ads as a supplement to search and social. The company is known for handmade Italian leather shoes that emphasize sustainable luxury and minimalist design. However, articulating its blend of approachable, mission-driven luxury and the rationale behind its premium pricing is a challenge with the limited space provided in paid search and social campaigns.
“We’re selling luxury products but also an aspirational lifestyle. We are trying to communicate this level of perceived value that can justify this price point despite having so many competitors at half the price,” said Joe Anhalt, Koio’s vice president of growth and marketing. “We need to be experimenting more with storytelling platforms, and CTV is one of them.”
Mobile shopping and social media forever transformed consumer expectations. People expect the ability to buy products as soon as they discover them — regardless of the platform. Roku caters to this expectation with shoppable ads that allow people to click “OK” on their Roku remotes to make purchases or receive special offers via text. In fact, Roku recently announced a first-of-its-kind partnership with Shopify to provide viewers the ability to purchase products from Shopify merchants directly from their Roku TV remotes through Roku Action Ads. This will be the first commerce integration for independent Shopify merchants on TV streaming, creating a completely new advertising channel for them.
For years, tracking the ROI of traditional TV ads was a challenge. Who actually saw the ads? What actions did they take afterward? Those questions have been hard to answer, leading DTC brands to stick with tried-and-true channels like search and social.
With streaming TV, it’s easier than ever to measure performance. Roku's Automatic Content Recognition data allows brands to understand what audiences are watching on both legacy and streaming TV. Another powerful tool is the Roku Ad ID, which functions like a mobile ad ID, allowing brands to understand if their ads led to specific behaviors, such as site visits or check-outs.
Roku sits in a unique position, hosting its own inventory on owned properties like The Roku Channel and our Roku City screensaver, while also accessing outside media opportunities through integrations with other streaming channels on the platform. With Roku Audiences, available through OneView, brands of all sizes can buy ads using Roku’s first-party dataset and get detailed breakdowns of how well those ads performed against your reach and conversion goals.
“More people are spending time watching streaming than there are dollars being allocated to streaming, so it doesn’t matter if you’re a really small startup. There's opportunity,” said Fisher.
Some advertisers are shy of streaming because of its perceived high cost. While absolute prices may be higher in streaming than they are in search or social, the value and creative impact of streaming impressions are correspondingly higher as well. For example, Elvie saw a CPA that was 24% less than industry standards.
Plus, there are plenty of ways to manage costs. You can get creative with video production — perhaps taking a page from Airbnb’s recent campaign which features still images of people hanging out at their most unique short-term rentals. Another way to be cost-efficient is by targeting specific audiences and managing reach and frequency based on how many times people have been exposed to your ad.
“Brand dollars can be accountable but they don’t necessarily have to be attributed the same way as performance,” said Fisher. “When you can make the case that you are landing with the right audience and you are changing brand perception, the dollars and the business outcomes will follow.”
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