In recent years, savvy advertisers—particularly those working with innovative young direct-to-consumer (DTC) brands—have accelerated their paths to TV advertising, upending historical patterns in which brands slowly built presences in other channels for years before launching their first TV efforts. Since the onset of COVID-19, this trend has increased dramatically, with young DTC brands racing to fill the void left by traditional TV advertisers that cancelled campaigns amid the pandemic.
This sudden shift sets the stage for a potential sea change within the competitive landscape of TV advertising in the coming years—provided that the brands that are accelerating their entry into TV are seeing the returns needed to continue their investments. Which begs the question: Do brands that launch their first TV campaign earlier in their lives see a greater impact on their digital performance than more-established brands?
To explore the implications of brands entering the TV advertising space earlier in their life cycles, Effectv and VAB recently took on an expansive analysis of hundreds of brands, both DTC and non-DTC, that have turned to TV as a way to drive their businesses forward. Let’s take a deeper dive into the motivations of these brands and the results that their TV efforts have delivered to date.
The Pandemic-Driven Shift to TV
The diversification of advertisers within the TV space in 2020 has been swift and significant. According to a VAB analysis, nearly $460 million entered the national TV marketplace in the first half of 2020 from 110 first-time national advertisers across 59 categories. Impressively, nearly 70 percent of new first-half national TV dollars were invested during Q2, the heart of the pandemic.
There’s a number of reasons why these young DTC brands are now accelerating their paths to TV advertising. These include the continued expansion and evolution of targeting and measurement capabilities within the TV space, both of which create greater efficiencies and lower costs of entry in TV. But it goes deeper than that. The legitimizing effect of TV advertising for brands, along with the medium’s enablement of deeper brand storytelling, are rapidly making TV a must-have for the type of growth that today’s young startups need to deliver.
The Outsized Impact of TV Advertising for Young Brands
Given the short-term, lower-cost TV inventory opportunity opened by the pandemic, it’s not terribly surprising that more early stage companies started to experiment with TV advertising. But according to our analysis, the results these brands are achieving suggest that they are going to continue to invest—and likely attract more and more young brands like themselves to the channel.
For our analysis with Effectv, we looked at the average monthly unique website visitors that were recorded in relation to the TV campaign launches for 190 new TV advertisers. When we examined results according to the age of the advertising companies, interesting patterns emerged. While both DTC and non-DTC brands across all life stages saw an immediate double-digit increase in unique visitors to their digital platforms during their TV launch month, the results were even more striking among younger companies.
According to our analysis, younger brands (3 years old or less) saw the largest lift—23 percent—in average website traffic within their launch month alone. Younger DTC brands are particularly aggressive as they challenge the incumbent brands in their spaces. They’re spending more (33-36 percent more) and advertising more consistently than the older brands, resulting in a greater return on their investment. The results speak for themselves.
TV can serve as a great validator for new brands, bringing swift credibility and scale, fast-tracking them to become household names quicker than those confined to digital channels. But our analysis also found that TV’s power as a growth engine isn’t confined to young brands. Across all measures, we found that TV campaigns drove improved results across brands, DTC and non-DTC alike, regardless of age.
As the economy accelerates and younger brands seize their opportunity to challenge incumbents on their own turf, the TV advertising landscape will look a lot different than it did back in 2019. Established brands that continue to invest in TV advertising will be able to hold their ground and catapult their businesses forward. But in areas where legacy brands pull back their TV spend amid the uncertainty of the pandemic, there will be no shortage of hungry young brands waiting to battle it out.
VAB, the trade group representing the video industry, is an insights-driven organization that inspires marketers to reimagine their media strategies resulting in smarter, more educated decisions that drive business growth.
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executive VP, VAB