Over the past few years, direct-to-consumer brands that built their businesses on Facebook, Instagram and Google ads have started turning to TV en masse, tapping into television’s unparalleled reach to fuel second- and third-stage growth. In 2018, for example, 120 DTC brands spent $2.6 billion on TV ads, up from $1 billion just two years ago, according to the Video Ad Bureau. At the same time that these digital disruptors have been embracing old-fashioned TV, some of the world’s oldest and largest marketers—and TV advertising stalwarts—are going the other way. P&G, for example, is taking some of its household-name skincare brands online, investing more in influencer and social campaigns in order to focus less on achieving broad awareness (already done) and more on developing experiential engagements with consumers.
What’s behind this mirroring of marketing strategies? Here’s a quick look at some of the industry forces pushing retailers old and new out of their comfort zones and into new advertising territory, and what it heralds for advertising’s future.
Competition, Costs and Capabilities Lure Digital-First Brands to the Big Screen
With the explosive growth of DTC companies—both in number and size—the category that was born online is starting to outgrow its digital dimensions. As the segment matures, many of the more established DTC brands are looking for access into demographics outside of social channels. At the same time, more DTCs means more competition and that has led to higher prices for social campaigns. And while TV is not cheap—brands like Peloton and Chewy reportedly spent more than $100 million on TV buys last year—the medium does offer tremendous reach and thus gives brands a better chance of achieving household-name status. In addition, TV is increasingly offering the digital-like targeting and measurement capabilities previously available only online. All in all, these add up to a perfect storm of events that are causing many digital-only brands to widen the aperture of their marketing mix.
P&G Gets Personal with Push into Performance
Of course, DTC’s growing interest in both linear and addressable TV has upped the ante for traditional CPG brands, causing companies like P&G to turn to digital to better compete with upstart brands and drive product sales more directly via performance marketing. For its Olay and SK-II product lines the company is planning on increasing spend in influencer marketing, social media and PR to engage more directly with consumers. In the case of SK-II, P&G is using performance marketing to drive consumers into retail stores, which actually serve as the best advertising vehicles for the brand and helps guarantee a sale. P&G used CES to showcase these new products that address some of the biggest challenges facing CPG marketers: knowing who their customers are and establishing a direct relationship with them. TV will remain a crucial advertising vehicle (Olay ads will run during the Superbowl) but using digital to gather the data that can help inform marketing going forward will be a big focus this year.
Moving Toward a Multi-Channel Majority
While representatives of each category are talking to the press about the short-term benefits of borrowing from each other’s playbooks, ultimately the takeaway is about more than just driving awareness, engagement or sales. The moves speak to the growing importance of multi-channel marketing in today’s growing, dynamic and increasingly fragmented media ecosystem. Reaching consumers wherever they are increasingly requires a content everywhere mindset and multi-channel campaigns are the only way execute against that aim. While it will take a while to gauge the returns on these new investments, with DTC and CPG marketing mavens leading the charge, the results are sure to be edifying.