Want to Target DTC Shoppers? Go With CTV

Study shows viewers more likely to respond to ads on streaming services

Shoppers were twice as likely to purchase a product after seeing it in a CTV advertisement than if they saw the same advertisement on linear TV. iStock

New research suggests that one key to direct-to-consumer wallets could be streaming services.

Hulu partnered with the video ad-tech company Telaria on new research that shows connected TV, or CTV, is a key channel for DTC brands to increase reach and drive brand awareness among a mobile-first demographic.

DTC shoppers surveyed said they spend 70% more time streaming TV each week than they do using social media. In total, their streaming TV consumption totaled nearly 13 hours per week, 20% more time than they spend watching traditional linear broadcasting.

“This revolution that we’re seeing in TV—streaming and digital-first television—is happening also now in retail, with digital brands changing the way that consumers access goods.” said Telaria CMO Jennifer Catto.

More than 1,500 consumers ranging in age from their early twenties to mid-fifties who said they watch at least seven hours of TV per week took part in the survey.

Television might seem like a natural choice for a DTC brand seeking to launch its business beyond banner ads and sponsored social media content. A February 2019 report from the Video Advertising Bureau tracked 120 DTC brands using Nielsen data and found they spent more than $2 billion on televised ads in 2018 overall. That’s nearly double what they spent two years prior. And though linear TV still represents the lion’s share of the televised audience, CTV is an appealing route for brands looking for the pizazz of linear television with the targeting tools of digital marketing.

“When you’re buying for TV, you’re buying reach, but you’re not buying for the exact audience that you want to reach,” Catto said. “CTV gives you that same premium environment—television’s sight, sound and motion—coupled with really precise audiences. It means that you’re not wasting your marketing budget on eyeballs that don’t matter to your brand.”

And Telaria found that this data-driven approach bears out. According to the study, shoppers were twice as likely to purchase a product after seeing it in a CTV advertisement than if they saw the same advertisement on linear TV. Meanwhile, twice as many shoppers found CTV ads more “relevant” to them than their linear counterparts.

Working with CTV “really lets advertisers own the entire purchase cycle,” said Karen Ring, Telaria’s head of research and insights. Having that insight into where ads are being placed and the precise audience being targeted gives advertisers a better picture of their overall conversion rate and what customer acquisition costs, she said.

“They’re able to connect those dots by being digitally grounded, something that’s not available to buyers in a traditional TV environment,” she said.

@swodinsky shoshana.wodinsky@adweek.com Shoshana Wodinsky is Adweek's platforms reporter, where she covers the financial and societal impacts of major social networks. She was previously a tech reporter for The Verge and NBC News.