Study: DTC shoppers served both linear, CTV ads are 2x more likely to buy

Dive Brief:

Shoppers of direct-to-consumer (DTC) brands spend 70% more of their time streaming content on connected TV (CTV) services than they do on social media apps, according to a new Telaria study done in partnership with Hulu that was shared with Marketing Dive. The findings were drawn from a survey of 1,563 global consumers who watch at least seven hours of TV per week, along with qualitative interviews with DTC shoppers.
DTC shoppers find CTV ads twice as relevant compared to linear TV ads, Telaria revealed. Shoppers served ads via both streaming and linear TV are also twice as likely to make a purchase versus those who watch ads on linear TV alone.
Eighty-two percent of respondents said they pursue an action after viewing an ad from a DTC brand while streaming content. Breaking those figures down, 51% visited the advertising brand's website, while 47% conducted an online search for the brand.

Dive Insight:

The new research from Telaria — a firm that helps platforms and networks like Hulu, Sling TV and A+E monetize their services through video advertising — suggests there's a strong link between two trends that are being driven by affluent but choosy younger consumer segments like millennials: the rise of disruptor DTC brands and the rapid growth in CTV streaming as viewers cut the cord on cable and broadcast TV. DTC brands often promote their products through a form of direct marketing, but CTV opens the opportunity to integrate more digital assets into advertising than linear TV does, which companies like Hulu are clearly trying to capitalize on.

Hulu recently collaborated with BrightLine on an interactive ad unit that ties together video spots served on programs with email marketing. The product lets consumers request offers from the advertiser by submitting the email address connected to their Hulu account. Hulu, which is now majority-owned by Disney following the completion of the media giant's Fox merger, also plans to debut a format called "pause ads" in Q2 this year, which activate a few seconds after a viewer takes a break from watching content. While the offering is early days for now, Hulu executives have previously indicated that they hope to eventually be able to include more interactive and transactional elements into pause ads if they gain traction.

Such experiments could prove appealing to DTC marketers, many of whom are quickly maturing and are more frequently turning to channels like TV and CTV as their social media audiences reach saturation points and ad costs grow steeper on key platforms like Facebook. It's also possible that younger consumers on CTV are more engaged than they are on social media. DTC shoppers spend nearly 13 hours per week streaming content, or around 20% longer than the amount of time they spend viewing cable, Telaria found.

The Telaria study also emphasizes the powerful but often underlooked approach of blending TV and CTV ad strategies more closely together, which can help to drive transactions. Separate research by Advertiser Perceptions previously revealed that, while advertisers are ramping up investments in CTV and over-the-top streaming services, just 53% have plans to synthesize their TV and digital video strategies.