Saturday, May 18, 2024

    DTC Ad spending up 7 to 20% annually for five consecutive years

    MediaRadar, a leading advertising intelligence and sales enablement platform, released an analysis today of the ad spend of direct-to-consumer (DTC) brands across digital, TV, and print. The study found that DTC ad spend has been up 7 to 20 percent annually, for five consecutive years, and is continuing to increase across almost every product category.

    The Interactive Advertising Bureau (IAB) reports that there are thousands of DTC startups across the U.S., with California, New York, Texas, Illinois, and Massachusetts having the highest concentrations. For example, MediaRadar counted 387 brands advertising in the apparel and accessories category alone. Some of the most well-known DTC brands include Uber,CasperBrooklinenWarby Parker, and Tesla.

    According to MediaRadar’s data, DTC brands typically begin with highly targeted spend on social media. Instagram was found to be the primary choice of partner, as the platform allows for seamless purchases from within the app.

    “When it comes to DTC advertising on social media, Instagram is the primary partner for this,” says Todd Krizelman, CEO and Co-Founder of MediaRadar. “The platform allows for very specific targeting, and seamless purchasing of product from within the app, which is a feature that few others offer.”

    The data also highlighted that as DTC firms scale their businesses, they begin to shift marketing and ad spending. Many rely more heavily on TV to create broad, top-of-funnel awareness. For example, Casper spent over $30 million per year on TV over the last couple of years and Warby Parker started TV advertising in 2016, stopped in 2017, only to return again in 2018.

    MediaRadar’s study also found that DTC companies place branded content pieces three times more frequently than traditional brands, with the top beneficiaries being Yahoo! and Buzzfeed. Buzzfeed has won a large portion of the IAB’s top 250 DTC brands, as the brand pairs well with DTC advertising due it’s strong Gen Z and Millennial audience.

    “DTC companies are a unique class of company, sometimes referred to as ‘disruptors,’” said Todd Krizelman, CEO and Co-Founder of MediaRadar, “because they have an ability to bypass traditional sales models, and to re-think otherwise staid markets.”

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