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Adding scale to stage 2 DTCs; and gaming TV audiences

23 Sep 2019  |  Dominic Mills 
Adding scale to stage 2 DTCs; and gaming TV audiences

Direct-to-consumer brands will need to look beyond online media if they have any hope of super-charging their businesses, writes Dominic Mills. Plus: one man's mission to inflate a TV show's popularity

My mate and fellow Mediatel columnist Bob Wootton has an interesting item here — last item in the column — about Facebook’s largest advertiser.

This is DTC food powder brand Huel, which spends more than the likes of Microsoft, EE or Tesco on Facebook.

Despite spending time on the social media platform, Wootton has never heard of Huel, and nor have I. I’m not even sure what it is, despite this explanation.

I’m not surprised he and I are ignorant of Huel. In a way, that is as it should be. I’m not in the market for a Huel-type product and I can say with absolute certainty that Wootton, who is way more gastronomically inclined than I am, isn’t either. This is proof, if any were needed, of Facebook’s targeting capabilities.

But at some point, if it wishes to accelerate its growth — scale-up, to use the jargon — Huel will need to move beyond Facebook.

In a timely manner, the IAB last week published its Born Online study, looking in depth at 50 market-leading DTCs. It’s a good, useful read and a reminder to agencies that, far from being excluded from a market where these brands tend to start off in-housing marketing activities, they have a role to play, particularly in multi-media planning, measurement and creative.

This is at the scale-up stage where, as the IAB says, DTCs will need to add offline components — principally media, but also a physical presence — if they are to get to stage two of their lives.

Sticking with the media side of it, what DTC brands will need is, in simple terms, fame and reach. Which means we’re talking broadcast media. The third support leg is that scale decreases acquisition costs, a metric DTCs focus closely on.

Indeed, looking at the IAB list of DTCs, the ones I have heard of — Peloton, Made, Gousto and so on — are the ones that have already embraced offline.

While Thinkbox stats showing 867 new or returning TV advertisers for 2018 aren’t broken down into DTCs and others, I think it is a fair guess to say that a significant number will be from the former category. One example it quotes is Dollar Shave Club, which went on TV for the first time and saw a 570% uplift in search in week one.

You can get a good sense of the direction of travel in the US from the Video Advertising Bureau (VAB), whose study looked at 125 DTCs. This group spent $3.8bn on TV in 2018, up 60% on the year before, 40 of them going on TV for the first time.

It is clear that what attracts them is the possibility of addressable, where their data-led strategies can come into play.

Confirmation last week of Sky and Channel 4’s tie-up on AdSmart expands the options available in the UK and may well encourage more DTCs to take up TV.

All of which puts the pressure on ITV. Back in the summer, it promised that the much-anticipated (and much delayed) roll-out of its Amobee-driven addressable proposition would begin in Q4.

That begins next week. If it is going to catch this DTC wave before it goes elsewhere, ITV needs to stick to that timetable.

Gaming the TV audience

Fellow Mediatel writer Ray Snoddy wrote last week about the BBC’s new play for the high ground in future programming, as described by DG Tony Hall.

Here’s one thing he said: “Purpose and values matter today more than ever, as people pick and choose services for ethical reasons as much as economic ones. Secondly, no one offers the range of content, in so many genres, on so many platforms, as the BBC.”

As Snoddy notes, there are likely many viewers who will applaud this... and then watch Love Island.

This reminds me about an old story I was told about a Canadian viewer who was a member of its equivalent of the BARB panel. Whenever there was a ‘highbrow/ethical’ programme on — a serious documentary, current affairs debate, a series about art, that sort of thing — he would switch the TV on.

Then he would go out: to a bar, the cinema, shopping, watching ice hockey, chopping down trees, whatever Canadians do for leisure.

Why? He didn’t actually want to watch these programmes himself, but he thought they ought to be on. And therefore, in his own small way, he thought it worthwhile to game the viewing figures so that the audience appeared bigger than it was.

Fab. I bet Hall would like to plant a few of those on the BARB panel.

A last word on Martin Freeman

Last week I noted how Martin Freeman, like many actors with a tendency to take themselves a bit too seriously, was happy to slag off advertising while at the same time accepting money from the likes of Vodafone etc.

I’m guessing it wasn’t always like that, because here’s Freeman playing a young (very young) dad in a Super Noodles ad who gets noodle stains all over his wife’s clean shirt and then blames the baby for the mess. Not a bad turn, in fact, and possibly — just possibly — the kickstart to his career.

Hat tip, btw, to my friend with the encyclopaedic knowledge of old TV ads.

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27 May 2020 

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