COMMENTARY

Will D2C Brands Change How TV Ads Are Bought, Sold, Measured?

• by Dave Morgan , Featured Contributor, August 8, 2019

The emergence of digital-first, direct-to-consumer brands as a significant, growing pool of new TV advertisers was a big theme this past spring during the upfront. I believe that D2C brands will become such an important part of the TV ad industry over the next few years that they will end up reshaping in their own image much of how TV advertising operates.

Why do I believe this? One, because television generally, and TV advertising specifically, are in critical phases of transformation. Two, because digital technology and approaches are transforming every part of the industry. Three, because generational change in key leadership roles on both the buy and sell side are accelerating that change. Four, because TV companies themselves are all transforming to become direct to consumer.

And five, most importantly, because nothing reduces resistance to change like money. D2C brands represent not only a significant pool of new ad dollars for television -- but these brands and ecommerce are quite likely to represent the dominant spend on TV within five years.

What might the D2C-reshaped world of TV advertising look like? Here are some of my thoughts:

More focus on audience. Most D2C brands launched in a digital ad world that focused on audiences first and content second. While they certainly also value the importance of context and positioning, it is critical for them to find their audiences wherever and whenever they are on TV. 

As former P&G executive and fellow columnist Ted McConnell famously says, ”brands don’t have remnant customers -- so why should they view any audiences at any time as ‘remnant?’”

More focus on automation. D2C brands are expert in customer analytics, and they want to leverage data from their analytic systems across all of their media buys. That means buying units and time more precisely. That means buying across many properties. That means making and changing buys at the last moment. Faxes, phone calls and handshakes won’t be enough for them. Real automation in the TV ad “demand fulfillment” will become table stakes for TV companies.

More focus on scatter. D2C companies operate much more dynamically than legacy brands with their long, slow supply chains and complicated networks of distributors and retailers. D2C companies need more nimbleness, and most will be happy to embrace the flexibility of scatter over discounts in the upfront.

Less pomp and more performance. Folks who allocate D2C advertising budgets are under much more scrutiny for ROI on a daily basis than most of their legacy brand counterparts, so I suspect that we’re going to see less focus on the “pomp” that the TV industry showers on legacy marketers and media folks, and more focus on performance. In other words, there will be less focus on hosting celebrations of splendor honoring TV ad buyers on a weekly basis and more focus on discussing and improving the CAC (customer acquisition cost) of TV ad campaign spots relative to search, social and cost-per-click ads.

What do you think? Will D2C brands reshape the TV ad world in their own image?