DTC Advertisers are Changing Up Their Programmatic Spend
In 2021, direct-to-consumer (DTC) brands are shifting their programmatic advertising strategies by increasingly managing marketing in-house to leverage first-party data and advanced technology for personalized multi-channel experiences, resulting in a 44% decrease in programmatic ad spend despite a rise in the number of advertisers, as iconic brands gain market share and eCommerce accelerates.
Direct-to-consumer (DTC) brands are masters of targeting individual consumers. The assumption is that they primarily do this by using programmatic advertising.
However, as the DTC landscape realigns with iconic brands taking market share and eCommerce accelerating, what used to work in the past might not hold true in 2021.
The Latest in DTC Advertising
DTC brands traditionally pride themselves on doing their marketing in-house and avoiding the services of agencies. Though it’s questionable that DTC brands don’t outsource any of their marketing, the in-housing trend is real.
The trend might be so strong that DTC brands born during the pandemic may never use an agency, suggests Mikael Kreuger, CEO of Match2One.
“Being able to own, analyse, and harness your own data and resulting brand messaging, see quicker campaign optimisation and keep greater creative control are some of the many reasons why brands are taking things in-house,” explained Kreuger. “And it can be done without needing significant investment in internal talent, thanks to the latest developments in tech.”
Reliable and accurate data is mission-critical for DTC brands, in order to give consumers the personalized experience they expect. For this reason, many brands favor managing their own data, instead of using a middleman service.
The most digitally mature brands are pairing their first-party data with significant investments in advancing technology. Brands are investing in ‘composable commerce’ that facilitates ‘multi-experiences’ across different channels.
As brands seek to build awareness across different channels, the most recognizable DTC brands aren’t spending as much in programmatic as they used to.
MediaRadar Insights
In 2021 to date, 1,400 DTC brands spent $60.9 million in programmatic advertising. This is down 44% in spend from 2020, in which 1,200 brands spent $87.6 million during the same period.
The increase in advertisers, along with the decrease in spend, indicates that though some DTC brands have moved spend away from programmatic advertising, it is still a popular format for younger brands.
Meanwhile, larger brands like Quip, Casper, and Allbirds appear to be shifting a larger portion of their ad spend into different formats.
New DTC brands advertising in the programmatic space in 2021 include:
- Proper Cloth Face Masks
- Zinus Mattresses
- EditorX
Brands advertising in the DTC programmatic space for the first time accounted for 12% of all spend in the category to date in 2021.
For more updates like this, stay tuned.
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