TV Ads Driving Web Traffic and Revenue for DTC Brands

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More com­pa­nies are see­ing the wis­dom in start­ing their oper­a­tions online before they set up bricks and mor­tar loca­tions. In today's crowd­ed mar­ket­place, these busi­ness­es need to reach con­sumers with mes­sages about the prod­ucts and ser­vices they offer. The VAB esti­mates that, in total, these direct-to-consumer brands spent over $3.8 bil­lion on TV adver­tis­ing last year.

Growth in DTC Brands

The VAB’s new report Direct Out­comes: Ana­lyz­ing the ‘Big Bets’ DTC Brands are Mak­ing on TV, defines a DTC brand "as a com­pa­ny sell­ing its prod­uct direct­ly to cus­tomers with­out third-party retail­ers, whole­salers or oth­er mid­dle­men.” Exam­ples of these brands range from Pele­ton to Casper. Con­sumers show no signs of tir­ing from the online shop­ping trend that now accounts for 14.3% of retail sales. In the next five years, we can expect sales in this chan­nel to grow. Near­ly two out of three shop­pers believe they’ll make about 20% of their pur­chas­es online.

DTC com­pa­nies get that they need to adver­tise reg­u­lar­ly. They’ve also dis­cov­ered that TV ads direct­ly dri­ve web­site traf­fic. And that’s traf­fic they need in order to grow sales.

Emerging DTC Brands and TV Advertising

While some DTC brands have been around for a while, new entrants are set­ting up shop reg­u­lar­ly. In their ear­ly growth stages, these busi­ness­es are like­ly to spend more than aver­age on adver­tis­ing to dri­ve con­sumer aware­ness. Last year, the 63 busi­ness­es the VAB labels as ‘emerg­ing’ bought $1.4 bil­lion in TV ads. This spend­ing lev­el was near­ly 100% high­er than the year before. Dur­ing the same time peri­od, researchers mea­sured a 183% increase in search queries and a 213% increase in online video views. Exam­ples of emerg­ing brands includ­ed in the VAB study include Chewy​.com and Pill­Pack.

Expanding DTC Brands

TV adver­tis­ing by ‘expand­ing’ DTC brands con­tin­ues to increase as well. Last year, spend­ing by the 62 brands includ­ed in the VAB study increased by 29% over 2017 and reached $2.35 bil­lion. Con­sumers def­i­nite­ly took notice of the ad pur­chased by War­by Park­er and 23andMe. Researchers mea­sured a 24% increase in search queries and a 95% increase in online video ad views after TV ads ran.

The VAB notes that TV adver­tis­ing in spe­cif­ic ver­ti­cals has jumped since DTC brands have entered the mar­ket­place. 2018 spend­ing in the fol­low­ing ver­ti­cals by DTC brands amount­ed to:

  • Per­son­al Finance $286 mil­lion
  • Mat­tress­es $266 mil­lion
  • Real Estate Ser­vices $194.5 mil­lion

To help your DTC brands increase rev­enue, share Audi­enceS­CAN pro­files of online shop­pers with them. The pro­files are avail­able at AdMall from Sales­Fu­el and explain which forms of adver­tis­ing influ­ence these shop­pers.

Kathy Crosett
Kathy is the Vice Pres­i­dent of Research for Sales­Fu­el. She holds a Mas­ters in Busi­ness Admin­is­tra­tion from the Uni­ver­si­ty of Ver­mont and over­sees a staff of researchers, writ­ers and con­tent providers for Sales­Fu­el. Pre­vi­ous­ly, she was co-owner of sev­er­al small busi­ness­es in the health care ser­vices sec­tor.
June 14, 2019 Media + Marketing Tags: , , , , ,