DTC Brands Are Finding Their Target Audiences Through Streaming Services

Some view OTT as a testing ground for other video campaigns

A black woman with the words "Everybody needs you-time" on the left, a small dog on front right and two white men smiling on the back right.
Using OTT is another way for these DTC brands to connect with a different segment of their audience.
Birchbox, Ollie and Roman

Custom dog food brand Ollie has ambitions to advertise on linear TV. But before taking the plunge, Ollie intends to learn what it can from streaming.

This month, the direct-to-consumer company is testing a monthlong video advertising campaign on Hulu. The 15-second dog-dense spots mark an effort to diversify from social media, where Ollie presently spends most of its marketing dollars, and help hone the brand’s approach to longer-form video marketing, said co-founder and chief experience officer Gabby Slome.

“The entry point is more palatable than a [traditional] TV ad,” Slome said. “These are our baby steps, of walking before we run.”

Switch on the ad-supported video service of your choice, and you’ll notice Ollie isn’t the only DTC brand testing the temperature of the streaming waters. DTC brands eager to diversify from social and paid search are looking for marketing opportunities on high-quality video inventory.

Taking a test-and-learn approach

Birchbox, which sells subscription beauty boxes, ventured into traditional television advertising with a few scattered linear buys, but when the company began executing a “surround-sound” campaign this year, CMO Amanda Tolleson thought it was past time to make streaming part of her marketing mix.

To test creative, Birchbox shot a number of video ads and tested them on social media sites. The best-performing videos made it to Hulu, where they are being run in front of users who match Birchbox’s target: women between 25 and 45.

“The CPMs [cost per thousand impressions] are way better there than they are on our linear buys, and our CPVs [cost per view] are way better than on our linear buys,” Tolleson said.

Birchbox’s Hulu campaign has a “test-and-learn” budget, and Tolleson is testing ad creative, targeting parameters and programming to see what works best. She anticipates that as the lessons roll in, her streaming marketing spend will increase.

Sidebar of data about AVOD continuing to grow from Hulu, Roku, Tubi, Pluto TV and Xumo.

“We know the audience we are going after is there,” Tolleson said. “We know they’re in the right kind of mindset. We know they’re the right demographics.”

Ollie, like Birchbox, is looking to learn a lot from its tests on Hulu. To measure success, Ollie says it will evaluate total streaming ad spend against the number of conversions the company can attribute to those ads. It’s also looking to learn about the creative, too.

“Instead of crossing our fingers, going out with one commercial and really going boom or bust,” Slome said, “we’re able to A/B test a few iterations.”

Learning from linear

Men’s telemedicine brand Roman had a different tactic and approached streaming after tackling traditional TV first. About a year ago, the brand started advertising on linear live sports “in earnest” because linear TV opportunities were more readily available than OTT, said Will Flaherty, vp of growth at Roman’s parent company, Ro.

The brand took lessons from linear to shape its streaming strategy. Roman partnered with Major League Baseball’s streaming platform, MLB.TV, as an advertiser and later as an official partner, which made reaching baseball fans—who tend to respond well to Roman—easier than stitching together media buys across regional cable networks, Flaherty said.

Roman has worked with nearly a dozen streaming services, including Pluto TV and digital streaming services owned and operated by broadcasters and cable companies. On streaming, Roman’s marketing is reaching new consumers, and it also serves as a test for the brand’s traditional TV marketing.

The biggest limitation on these emerging platforms, Flaherty says, is scale. Marketers may find themselves piecing together several buys across different platforms to reach large audiences. “You do have to cobble it together, barring some of the larger services,” Flaherty said. “As much as these services are growing, they’re still much smaller in aggregate than in linear TV.”

Capitalizing on growing interest

Streaming platforms are eager to capitalize. Peter Naylor, Hulu’s head of ad sales, said that the number of DTC brands advertising on Hulu more than doubled in 2018; overall ad revenue from those clients was up 85% year over year. Hulu this year tripled its sales force dedicated to DTC brands and performance marketers to account for growing interest.

This story first appeared in the Aug. 19, 2019, issue of Adweek magazine. Click here to subscribe.

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