Matt Nemer on Direct-to-Consumer Brands and TV Advertising

Direct-to-consumer, or DTC brands, have often taken unconventional paths when it comes to advertising. For example, many utilize Instagram or other social media influencers to promote their product. Recently, DTC brands have started to move away from social media platforms and back towards traditional advertising, such as posters on subway cars and television.

Several DTC brands have begun implementing television into their marketing strategy. They believe that it has contributed to sales and web traffic.

HelloFresh, a meal preparation delivery service, is just one brand that has utilized television advertising. The brand began buying television spots in 2015. According to David Webb, the group’s director of growth and analytics, the television ads are behind the organization’s 88 percent year-over-year increase in site and app visits.

HelloFresh is not the only company with a successful television advertising strategy. Other popular DTC brands, including Stitch Fix, Ancestry, Chewy, and Carvana, have also seen a correlation between spending on television ads and revenue.

Television advertising amongst DTC brands is a growing trend. More and more companies are purchasing ads on TV. In 2017, DTC brands spent $1.3 billion on TV ads in 2017, which is $650 million more than they spent during the previous year. The year-over-year increase was 98%!
Although television ads are becoming more popular, they are also simply not an option for many smaller DTC brands. TV advertising is costly, and requires longer lead times and for companies to work with a traditional agency that is familiar with this form of marketing.

DTC companies who have already purchased television ads, however, argue that it is a very cost-effective method of advertising. Some believe that other groups do not adequately understand the economics of television. Tophatter, a mobile auction app, found that TV ad channels pay off just six to nine months after their launch.

TV ads’ expenses are not the only factor holding some DTC brands back. In some ways, TV metrics are harder to measure than those online. Measurement companies such as Conversion Logic or TVSquared, however, are helping solve this problem. They are equipped to track whether a person is on their phone or other devices as they watch television.
Although it has some drawbacks, television is quickly proving a popular advertising channel for direct-to-consumer brands.

This article was originally published on MattNemer.com.

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Matt Nemer currently serves as the CFO of PlushCare, a telemedicine group in San Francisco. Before working with PlushCare, Matt spent 15 months serving on the executive team at the popular men's wellness startup, Hims Inc. There, he managed finance functions and assisted with key strategic projects. Before that position, Matt spent nearly two decades as a leading Wall Street research analyst responsible for covering the retail and ecommerce industries.

To learn more about Matt Nemer, visit MattNemer.net.