Viacom
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What we can learn from DTC success with TV ads
Kevin Krim is EDO‘s President & CEO. His 21-year career has spanned search, social and TV advertising across start-ups and major companies like Yahoo and NBCUniversal. Sebastian Chiu is EDO‘s Chief Data Scientist. He earned his undergraduate and post-graduate degrees from Harvard, working previously as a data scientist at Dropbox.
One of the most-discussed plot twists in recent advertising has been the pivot of Direct-to-Consumer (DTC) brands to linear TV. These data-driven, digital-first players are expanding well beyond Facebook and Instagram—and becoming serious players on the largest traditional medium in advertising.
A January 2019 Video Advertising Bureau study found that in 2018, 120 DTC brands collectively spent over $2 billion in TV ads—up from $1.1 B in 2016. 70 of those 2018 advertisers ran TV ads for the first time.
But while we know that they’re advertising on TV, what may be less discussed is whether they’re succeeding on television—and what strategies they use to achieve their success.
At EDO, we have a unique and differentiated ability to measure how DTC advertisers perform on TV by tracking incremental online searches above baseline in the minutes immediately following individual TV ad airings as viewers translate their interest in advertised brands and products directly into online engagement with them.
By measuring incremental search activity across 60 million national TV ad airings since 2015, we are able to effectively isolate the effects of TV ad placement and creative decisions that are most likely to cause online engagement.
We ran the numbers on DTCs as well as advertisers in various other categories to better understand how DTCs specifically are succeeding in TV ads—and what DTCs who are considering TV advertising can do to achieve success on TV.
Table of Contents
- Does the David vs Goliath story play out on TV?
- Is there a newcomer advantage on TV?
- How does the DTC marketing playbook translate to TV? (A brief history and how-to, plus a Casper mini-case study)
- Conclusion: 3 keys to DTC TV success
Does the David vs. Goliath story play out on TV?
The DTC revolution is a quintessential David and Goliath story. In vertical after vertical, small, digital-native upstarts are changing the game and overtaking major brands. Does that story play out on TV as well—or is TV advertising one area where DTC marketers have finally met their match?
To answer that question, EDO looked at how effectively TV ads elicited viewer activity since September 2018 across eight major industry categories including DTC. Guided by historical ad performance across billions of ads, we rated ad performance based on how closely the DTC ads came to meeting the benchmark volume of brand-related online activity in the minutes following each TV ad airing.
We index each industry accordingly—giving an index value of 100 to an ad that meets benchmark standards, and below-par ads getting a score under 100 while higher-scoring ads receive a score over 100. We chose to set our index baseline of 100 to the average Consumer Packaged Good (CPG) ad since it is such a large and broad ad category. Our results are as follows:
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T-Mobile’s mobile TV service to include Viacom channels like MTV, Nickelodeon, Comedy Central & more
T-Mobile and Viacom this morning announced a deal that will bring Viacom’s TV channels — like MTV, Nickelodeon, Comedy Central, BET, Paramount and others — to T-Mobile’s new mobile video service planned for later this year. The agreement will allow T-Mobile to offer live, linear feeds of the Viacom channels as well as on-demand viewing.
To date, the carrier’s mobile video plans have been murky. Last year, T-Mobile acquired the Denver-based startup Layer3 TV in order to launch a new over-the-top video service in 2018. It missed that window, saying that it needed more time to work on features and make “quality improvements.”
The company later said that it didn’t want to offer another Amazon Channels-like “skinny bundle” consisting of individual subscriptions to various channels, but wanted to offer something more differentiated where customers could create their own media subscriptions in “smaller pieces,” like “five, six, seven or eight dollars at a time.”
Today, T-Mobile says it still plans to move forward with both its home and mobile TV offerings, made possible by the acquisition of Layer3 TV. The in-home TV service is designed to leverage 5G technology to replace cable. Meanwhile, Viacom will be a “cornerstone launch partner” for T-Mobile’s mobile TV efforts, on track for a launch this year.
“Viacom represents the best of the best, most-popular brands on cable, so they are an amazing partner for us,” said John Legere, CEO of T-Mobile, in a statement. “TV programming has never been better, but consumers are fed up with rising costs, hidden fees, lousy customer service, non-stop BS. And MacGyvering together a bunch of subscriptions, apps and dongles isn’t much better. That’s why T-Mobile is on a mission to give consumers a better way to watch what they want, when they want,” he said.
Not much is known about T-Mobile’s mobile TV plans at this point, like a more specific launch time frame or price points. It’s also unclear if T-Mobile will go the route of bundling in its TV service with its mobile plans. That’s been a popular strategy for AT&T, which today operates two over-the-top services — a low-end service called WatchTV designed for bundling and its more premium service DirecTV Now. (It also plans to launch another featuring Warner Bros. content.)
Viacom has deals with other carriers besides T-Mobile, having recently renewed its contract with AT&T for DirecTV Now carriage. It also participates in various other streaming services, including its own service (by way of acquisition) Pluto TV, and has invested in Philo.
“Today’s landmark announcement marks a major step forward in our strategy to accelerate the presence of our brands on mobile and other next-generation platforms,” said Bob Bakish, Viacom president and CEO, in a release. “We’re so excited to partner with T-Mobile to provide millions of subscribers with access to our networks and more choice in a new service that will be unlike any other in the market.”
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Jeffrey Katzenberg and Meg Whitman announce the name of their stealthy mobile video startup
Onstage at Vanity Fair’s New Establishment Summit in Los Angeles, Jeffrey Katzenberg and Meg Whitman unveiled the name of their highly anticipated mobile video company known until now as NewTV.
The name is Quibi, short for “quick bites,” per a note on its new website: “Something cool is coming from Hollywood and Silicon Valley — quick bites of captivating entertainment, created for mobile by the best talent, designed to fit perfectly into any moment of your day.”
The short-form video service, launching next year, will operate on a two-tiered subscription model similar to Hulu, per Deadline. Quibi is cooking up original content with Oscar-winning filmmaker Guillermo del Toro, Southpaw director Antoine Fuqua and Spider-Man director Sam Raimi, as well as Get Out producer Jason Blum and Van Toffler, the CEO of digital media production company Gunpowder & Sky, a spokesperson for the company confirmed to TechCrunch.
The Hollywood Reporter says the del Toro project “is a modern zombie story,” the Fuqua project is “a modern version of Dog Day Afternoon” and the Blum project, titled Wolves and Villagers, could be compared to Fatal Attraction.
Katzenberg, the former chairman of Walt Disney Studios and founder of WndrCo, a consumer tech investment and holding company, has raised $1 billion for Quibi from Disney, 21st Century Fox, Entertainment One, NBCUniversal, Sony Pictures Entertainment, Alibaba Goldman Sachs, JPMorgan Chase, Madrone Capital and several others. He hired Meg Whitman as Quibi’s CEO in January.
Quibi, given Katzenberg and Whitman’s entertainment and business acumen, is expected to compete with the biggest players in the space, including Instagram, Netflix and Snap, which today announced Snap Originals. The new effort will have the ephemeral messaging service rolling out 12 new scripted shows on its app, from Keeping Up with the Kardashians creator Bunim/Murray, Friday Night Lights writer Carter Harris and more.
Quibi is hiring aggressively, recently bringing on former Instagram product manager Blake Barnes and former Hulu chief technology officer Rob Post.
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Nickelodeon revamps Noggin, its ‘Netflix for Kids,’ with dozens of interactive, play-along videos
Nickelodeon’s Noggin is today taking a step to differentiate Noggin from being just another “Netflix for kids” type of subscription video service. Alongside its existing lineup of TV shows and sing-alongs, Nick is introducing a series of what it calls “play along” videos. These new videos, which are also curriculum-based, are designed to be interactive in… Read More
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Diary Of A Cord Cutter In 2015 (Part 7: Hands On With Noggin, Nick’s New Kid-Friendly Streaming Service)
Earlier this year, Viacom-owned kids’ network Nickelodeon announced its plans to enter the subscription video market with its own over-the-top streaming service aimed at the preschool crowd. Called Noggin, the service launched this March on iOS with a decent selection of titles, including a few popular names from the kids TV market, like “Blue’s Clues.” The question… Read More
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