We began our series of “integrated advertising in sports” posts in 2017 by looking at how brands, including T-Mobile and Duracell, were capturing the attention of baseball fans during that year’s World Series. We also wrote about the NHL and how the league’s evolved from blank boards to virtual ad overlays.

Today, we’ll keep the ball rolling and dive into integrated advertising in the NBA—and how brands can reach a massive addressable audience.

Breaking Tradition

The MLB is perhaps the best example we’ve seen of a professional sports league leaving tradition in the past – interesting, as baseball is the game that seems to thrive on tradition more than any other.

The ads present in 2017’s World Series showed a true effort and diversion from what viewers were used to seeing.

The most “in-your-face” example came from YouTube, which brought an ad smack-dab in the middle of the action, right behind home plate. 

More recently, FTX sponsored logo patches on the uniforms of baseball’s umpires.

The NHL’s many innovations have been impressive but are more so extensions of things that already existed. The NHL has continued to push the boundaries of integrated advertising, sometimes at the behest of its viewers. Most recently by debuting digitally enhanced dasherboards.

The NBA is following suit and taking its own strides to incorporate ads into its product.

Despite being one of the most consistently fast-paced sports to watch, the NBA still has a lot of traditional downtime via advertising. Commissioner Adam Silver, however, has made notable strides during his tenure to better integrate ads into the viewer experience. 

The first was to restructure the game itself. The league introduced a new timeout structure, leaving teams with fewer timeouts, resulting in fewer commercial breaks for advertisers.

The second stride came as a way for NBA teams to still drive revenue, even with fewer commercial breaks – they added advertisements to team jerseys. The NBA took things further by approving two more ad spots on uniforms for the 2022 season. 

Jersey Patch Ads

The discussion surrounding jersey ads has lingered for a while now, and not just in the NBA.

We’ve seen jersey ads before, most notably in professional soccer leagues worldwide and the WNBA.

Jersey ads recently came to the NHL as well. Two of the most “traditional” franchises—the Toronto Maple Leafs and Montreal Canadians were quick to jump on the opportunity for additional revenue.

Soon enough, the NBA decided to break away from the pack and endorse the long-discussed jersey advertisement with a three-year test run.

The test run was successful, at least by the NBA’s standards. Since 2016, the available “inventory” has steadily grown, with the NBA recently announcing more inventory was becoming available—this time on shooting shirts and warmup jackets.

When the league first announced jersey patch ads, it was not to much delight from fans.

Upon seeing the ads, however, it became clear that there was much attention paid to integrating the brand logos into the color schemes of each team to make them less noticeable, even native to the surrounding branding.

Here are a few recent examples from the Golden State Warriors, Philadelphia 76ers, and Phoneix Suns:

Of course, the 76ers will have to move on from Crypto.com as the company in light of the industry’s collapse and the subsequent hard stop on advertising to promote digital currencies. 

Overall, however, these ads generally work well with team branding. More so, they provide another legitimate source of revenue for NBA teams.

While there are no set prices for this inventory, one of the most lucrative deals for any team has been the Golden State Warriors’ sponsorship agreement with Rakuten, a deal worth $60 million. Recently, the Golden State Warriors and Rakuten agreed to continue their partnership.

All-Stars and All-Sponsors

Typically, jersey ads and things of that nature are test-run in international and exhibition matches, regardless of the sport.

The most notable yearly exhibition in the NBA is its annual All-Star Game. The All-Star Game is a perfect example in looking at the NBA’s high-level inclusion of sponsorships during game broadcasts.

Here’s a list of some of the events that’ll take place during this year’s All-Star Weekend:

• Jordan Rising Stars Practice
• Ruffles NBA All-Star Celebrity Game
• NBA All-Star Practice Presented by AT&T
• Kia Skills Challenge

For Jordan, Ruffles, AT&T, and Kia, All-Star Weekend will be filled with fun and excitement—and their logos front and center.

While All-Stars and All-Sponsors have been done for some time now, it’s important when considering the NBA’s efforts to minimize commercial breaks.

In-Game Sponsorships

The deeper fact here is that sponsorships come in many forms in the NBA. Jersey ads are the most recent, and currently, the most talked about form of sponsorship, but there are a number of other in-game sponsorships.

There are a lot of working parts during any basketball game aside from the players, as well, including the many tools, technologies, and people that maintain the court’s functionality.

One of the most important technologies present during NBA and NCAA Basketball games is the shot clock. Tissot took advantage of this when it debuted a new integrated timing system and shot clock with innovative LED glass technology developed exclusively for the league.

It’s transparent, houses touch-screen controls, and displays a large Tissot logo for all to see. No other sport uses a Shot Clock as the NBA does. Therefore, no one else can utilize this ad space.

Old Spice also found a way to get an advertisement into the working functionality of basketball games. And even though this one has been taking place during college games, it was simply too much fun to leave out.

The War on the Floor

The NBA has put in a great effort to be the most progressive, tech-driven league. As we mentioned earlier, that’s largely due to their youthful audience. 

That effort is most evident in the experience they offer fans, ads or no ads. A good example of this is the NBA’s endorsement of virtual reality.

The NBA experience is free and available on Meta’s Horizon Venues platform, a free software download for the Oculus headset. People appear as digital avatars and watch games from a courtside perspective.

From a business perspective, the deal could give the NBA a new set of media rights, which is important as regional sports networks struggle.

Facebook is also partnering with the NBA to launch NBA-licensed apparel in the Meta Avatar Store where consumers can purchase NBA or WNBA apparel for their avatar.

In terms of ads, however, one of the most innovative things we’ve seen the NBA do is use arena floor space as a video ad landscape.

On February 10, 2018, the Golden State Warriors played the San Antonio Spurs in their home, Oracle Arena. At halftime, the fans were treated to what was called, “The War on the Floor,” where they used the court as a projector for a God of War video ad:

At first, the video plays on the Jumbotron, which is nothing out of the ordinary. Soon after, however, the entire court lights up with a snowy, icy, action-packed narrative.

This is extremely important for the broadcast’s sake. Even though these videos cannot be played during live-game action, they can be used to reach viewers streaming live games.

Streaming service NBA League Pass, for example, allows viewers to stay inside the arena during broadcasts. There are breaks, but simply no commercials. Viewers instead watch halftime shows, timeout breaks, t-shirt tosses, and so on.

Integrated Advertising in the NBA: A Primetime Opportunity for Brands

Overall, the NBA has done a fine job in living up to its tech-driven reputation, and with time, can prove to only become better. As the league looks to tap additional revenue streams, more ad inventory will undoubtedly follow. That said, the NBA will have to be careful not to infringe too much on the viewer experience.

Nevertheless, ad dollars will follow from brands looking to capitalize on the NBA’s niche and ever-expanding audience.

For more insights, sign up for MediaRadar’s blog here.

That’s easier said than done.

While the market has come together to bring these historically siloed ecosystems together via cross-channel technology and universal identifiers, there’s still a lot of fragmentation.

Below, we explore how to speak the cross-platform language to your prospects and how you can leverage your fluency to increase your share of wallet.

The Salt, Fat, Acid and Heat of Cross-Platform Advertising

In Netflix’s Salt, Fat, Acid, Heat, host Samin Nosrat makes it her mission to drive home that every recipe involves these four elements of delicious food in some capacity. It’s just a matter of striking a balance between them. With the right levels of each, amateur cooks and professional chefs alike can create the perfect dish. It’s that simple.

That way of thinking should extend to how advertisers think about cross-platform advertising.

What’s Cross-Platform Advertising?

Cross-platform advertising means you can build a stronger brand by delivering ads across multiple platforms, including search, social, display, OTT, podcasts, and other relevant channels to your target audience. A thoughtful cross-platform advertising strategy ensures a brand appears on all the channels and devices its target audience uses daily.

Nikki Gilliland at Econsultancy said, “As well as creating a single customer view, cross-channel advertising can also help brands to create and deliver a seamless customer experience – i.e., consistent and unified brand messaging across multiple channels and devices.”

Note two words: customer experience.

Today and every day in the future, consumers will put a premium on the experience brands deliver. According to PwC, 73% of consumers say a good experience is key in influencing brand loyalties.

At the same time, 77% of consumers say inefficient customer experiences detract from their quality of life.

So, yeah, the customer experience is a big deal.

Ads are a part of that.

But extending a marketing budget across multiple channels and platforms can prove difficult for brands with a finite number of dollars to spend.

The question then becomes: How can you help prospects build a strong cross-platform campaign on a budget?

Step 1: Narrow Their Channels (Salt)

Advertisers have been bullish on cross-platform advertising for years. In 2018, the IAB reported that 83% of advertisers see cross-platform measurement has improved since 2017. Since then, cross-platform advertising has advanced even more.

For example, The Trade Desk (TTD) recently debuted a tool to help advertisers activate first-party data across channels and devices.

Although brands are waking up to the idea of cross-platform advertising, many are keeping their campaigns in a silo. Some are ignoring channels altogether.

Consider OTT.

Despite OTT’s growth, only 3% of monthly digital ad spend goes to OTT.

Meanwhile, of the advertisers who invested in Meta’s ecosystem in 2022, 72% allocated ad dollars exclusively to Facebook.

This isn’t ideal, but it makes sense. The advertising world is complex—and with only so much to spend, it can be easy for brands to default to one or two channels. Or maybe stick to their tried-and-true channels, like Facebook, and neglect up-and-coming ones, like OTT.

While brands may want to land on as many touchpoints as possible, a cross-platform strategy isn’t “complete” only when they check all the boxes. A handful of relevant platforms absolutely meet the definition of cross-platform advertising.

To determine where a prospect’s limited ad dollars should go, take a step back to truly understand who they’re trying to reach and where they can get the most bang for their buck.

For example, a direct-to-consumer (DTC) brand will likely succeed on social media platforms popular with Millennials and Generation Z—think TikTok, Snapchat, and Instagram.

This handful of channels can make for the sturdy foundation of a good cross-platform campaign without overwhelming the prospect’s budget or brain.

Step 2: Take Time With Good Content (Fat)

The goal in advertising is to go from first impressions to conversion. But to get there, prospects have to take the ‘middle’ seriously. Good content is in the middle.

Getting many views on a social media ad won’t matter as much if there’s no clear CTA.

Landing a sponsorship on a top podcast won’t be as effective without a concise and engaging message to share.

Getting visitors to a landing page will go nowhere unless there’s interesting content there and around the site.

Good content can be at the center of the tapestry, with all the different media threads pulling to the same point.

This has less to do with staying under budget than using the budget effectively.

Take John Hancock’s #LifeComesNext campaign.

The insurance company began the campaign with a series of TV spots presented as short stories. The screen cut to black at pivotal moments in the dramas, replaced with a CTA, e.g., “Find out what happens next,” and a link to the website.

On the site, viewers could choose one of three potential endings and continue the conversation using the hashtag on social media.

The campaign wasn’t just cross-media. It didn’t just post similar creatives on different platforms. John Hancock placed a good story at the center and used multiple platforms to connect all the dots.

Here’s a more recent example from The Trade Desk.

The campaign, dubbed “What Matters,” delivered a compelling story across channels popular with its target audience: programmatic connected TV (CTV), digital out-of-home (DOOH), online video, and YouTube.

Step 3: Track Everything (Acid)

Advertising is long past the Mad Men age of throwing an ad out there and seeing what sticks. The days of throwing spaghetti at the wall are over. Advertising can be a science, and nothing will help your prospects maintain their limited budget like keeping a close eye on the metrics.

But not just any metrics. The metrics that point to tangible business impact. Impressions and clicks are great, but return on ad spend (ROAS) is even better.

This is not the space to dive into the specifics of advertising metrics (though it is worth noting that media companies dependent on multichannel distribution, like SlingTV and NBCU, are developing unified cross-platform metrics).

We will dive into some high-level steps you and your prospects should take to ensure they get the best return on their ad dollars.

First, start by developing relevant metrics for each platform. What are they trying to accomplish on each channel, and which metrics will help them measure that?

Second, develop a means of comparing successes that otherwise may look like an apples-to-oranges scenario. Remember: Not all metrics are created equal. A video view on YouTube is measured differently than one on Facebook, meaning you can’t simply compare the two platforms to determine where video ad dollars should go.

Finally, look at what works and what doesn’t, and then adjust accordingly. No need to stick to PPC when that banner ad is returning twice the conversion for half the price. A true cross-platform advertising strategy is built on a foundation of constant iteration and optimization.

Looking for some inspiration?

Digital natives like Warby Parker and Casper are experts. While digital channels and PPC may be their lifeblood, direct-to-consumer brands have done their fair share of traditional advertising.

More recently, Airbnb shocked the advertising world when it announced it was focusing on brand marketing and not search—a focus that’s working.

Chief Financial Officer Dave Stephenson said, “Our brand marketing results are delivering excellent results overall with a strong rate of return, and it’s been so successful that we’re actually expanding to more countries.”

And now for the pun-of-all-puns we’ve been waiting for: With the right channels, content, and metrics in place, you can bring the heat. Sometimes advertisers feel like deciding on digital ads vs. traditional ads is an either/or situation. But, with the right elements in place, you can have your Russian Honey Cake and eat it too.

For more insights, sign up for MediaRadar’s blog here.

The growth of podcasts means that publishers and advertisers should pay close attention to the expanding world and its advertising (and revenue-generating) implications.

More and more content producers have adopted the format, and like any other form of content, advertisers are following; podcast advertising in the U.S. drove almost $1.5b in revenue as of 2021, representing a 72% increase from 2020.

Why?

For publishers, podcasts offer a new way to reach and grow their audience while giving them new ad inventory to offer brands.

For advertisers, podcast ad space is a place to engage with consumers in a new way – a way that seems to be gaining popularity.

As podcast advertising grows, the market is responding. Most notably, programmatic podcast advertising is gaining steam to help advertisers drive performance and efficiency in this relatively new ecosystem. That said, ad buyers are hesitant to buy via programmatic means for various reasons, including host-read ads remaining powerful and the need to vet content before the ad goes live.

Despite the growing pains, podcast advertising is here to stay—its direct-response powers are too much to ignore.

Moving Consumers to Action with Direct Response Podcast Ads

Direct response advertising has been around for quite a while in the form of coupons, sales, promotional codes, call-now’s, and more.

The idea of the form is to make consumers move immediately from an advertisement to a purchasing action. The consumer is making a buying decision based directly on the ad they were exposed to – hence the name.

Podcasts, however, have added a new layer of digital interaction for direct response advertising. Content consumers engage with podcasts in ways unlike almost any other form of content, and that has brought a new depth to what brands can achieve with direct-response ads.

For example, a listener could hear an ad about a new type of mushroom coffee and immediately buy it with the corresponding discount code (these are almost always part of the ads). The fundamentals of direct response advertising are there, but podcast’s version has something others don’t: authenticity.

Not only are direct-response podcast ads delivered in a way that encourages a purchase, but they’re done so authentically—people generally take the host’s recommendations more seriously. They do this for the same reason influencer marketing is so popular; people trust people more than brands.

So, that got us thinking… What else makes podcast direct response advertising more desirable for brands than other forms of direct response?

Why Brands Love Podcasts for Direct Response Advertising

The growing addressable audience remains a central factor in brands’ fondness of podcast advertising, but there’s more to it. A level deeper, the liking resides with podcasts’ targeting, engagement, listener loyalty, and attribution.

1. Targeting

As the podcast landscape continues to expand, more genres of podcasts have become available. There is also less censorship and more freedom when creating podcasts compared to radio and other forms of audio content.

All of this, paired with the do-it-yourself nature of the industry, means that a ton of podcasts are being created in many genres. According to the Podcast Index, there are currently almost 4mm podcasts.

From an advertiser’s perspective, more genres mean that they can reach more hyper-targeted audiences.

Different shows offer audiences of various sizes, age demographics, etc. Therefore, advertisers can measure the likeliness of a direct response by the type of audience that consumes the podcast at hand.

For example, a B2B advertiser can target B2B podcasts, like The Advanced Selling Podcast, and make the ad buy confidently, knowing that those who will hear it are likely directly aligned with their ideal customer profile (ICP).

Advertisers can also vet the episode their ads will run during, an extra layer of confidence that programmatic podcast ads can’t offer yet.

2. Engagement

Podcast listeners tend to be very engaged and focused on the episode they choose to listen to. In fact, that matter of choice is a factor in its own right. 

Listeners must find the podcast episode they want to listen to, leading them to be more patient with the content. Compared to radio, for example, there’s much less randomness regarding what podcast listeners consume.

Jason Cox, the CTO of Panoply, stated that listeners to their podcasts get through 80-90% of the content they choose to listen to.

The nature of podcasts leads listeners to do less skipping around and more genuine listening, obviously presenting a terrific environment for direct response advertising, as more engaged listeners are much more likely to act immediately.

According to Edison Research, 54% of podcast listeners say they are more likely to consider the brands they hear advertised on podcasts.

The nature of podcast ads drives engagement as well. Why? Because most of them are read by the host.

In fact, 63% of podcasts are host read, while almost half of podcasts had the majority (at least 8 out of 10) of their ads read by the host. 

A study from Nielsen found that host-read podcast ads were “significantly more likely to be described by respondents as authentic and believable, and less likely to be felt as forced.”

3. Listener Loyalty

Podcasts are like music in that listeners can connect to the host and the content (in the case of narrative-based podcasts). As listeners become more deeply connected with podcasts, they’ll build better associations with the brands that advertise on that podcast.

Many podcasts have very loyal audiences, as well.

They have listeners who will tune in attentively to every episode. Direct-response advertisements often remain the same for multiple episodes, so even if a listener is not drawn to action the first time they hear an ad, they will be later.

Consider this: Let’s say someone is listening to their favorite comedian’s podcast. If that comedian endorses the same brand for multiple episodes, pushing one promo code, there’s a high chance that the listener will at least research the promotion to see if they’re genuinely interested.

In this case, the listener has a pre-built loyalty toward their favorite comedian and, therefore, will be more willing to consider the brands that that comedian is endorsing, thinking, “If [Enter favorite comedian’s name] likes MediaRadar, then maybe I should, too.”

4. Attribution

Attribution is the arch-nemesis of advertisers. It always has been and always will be. The bane of advertisers’ existence is rearing its head more than ever as Google prepares to sunset third-party cookies, making it unprecedently difficult for advertisers to get a clear view of campaign impact.

Podcast ads come with their own attribution challenges—a 2021 survey found that attribution was the most commonly cited challenge of podcast advertising—but they have an edge that other ad formats don’t: promo codes.

Most podcast direct response ads include some version of a promo code.

It’s simple on the consumer side and gives advertisers a direct link to attribution. When consumers act on a direct response ad, a measurable interaction occurs at the point of purchase – “Use the promo code MediaRadar2023 at checkout,” for example.

When someone uses MediaRadar2022 at checkout, it’s a data point for advertisers of a successful direct response advertisement.

To expand and further hone direct advertising efforts, brands can use the data they gain from conversions to fuel their later podcast campaigns.

Advertisers and Direct Response Podcast Ads: A Perfect Marriage

In 2022, 82% of marketers said they planned to continue investing the same amount or more in podcasts or other audio content.

That’s easy to understand, considering targeting, engagement, and attribution prowess. Also, direct-response podcast ads give brands immediate access to loyal audiences.

Those reasons alone are enough to keep pushing ad dollars into the podcast world. Still, other outside forces are in play, including the demise of third-party cookies and advertisers’ desire to deliver ads in the most authentic way possible.

For more insights, sign up for MediaRadar’s blog here.

If you’re nodding your head, you’ve participated in the market’s direct-to-consumer (DTC) segment. 

Warby Parker, the unicorn among unicorns for digitally native brands, ushered in DTC nearly a decade ago. Established brands like Nike have been catching up ever since, putting the customer experience in the spotlight and playing with their online stores to make buying as easy as possible. 

The reverberations of shifting customer expectations continue to be felt among digital natives and major retail brands alike—and the model’s growth across industries and markets is stratospheric.

In 2022, approximately 64% of consumers worldwide made regular purchases directly from brands. The DTC model is here to stay, and ad platforms will need to learn to keep up. 

But how have DTC disruptors changed advertising, and what’s most important for advertising in the DTC model?

This article dives into how DTC advertising differs from traditional advertising and which factors remain the same.

What’s a DTC Brand and What Do They Mean for Traditional Advertising? 

A DTC brand is any company that sells its products to consumers rather than going through a distribution channel or retail store. With that definition, DTC can take on many different forms. 

Digitally native brands like Allbirds, Away, Casper, and Dollar Shave Club are examples of B2B brands in their purest form. 

By definition, Uber is also DTC since consumers can simply press a button and their ride shows up. No intermediaries are involved. 

Sometimes, it’s new efforts put forward by industry giants, like Nike or Asics, trying to keep up with the times. Since 2011, Nike has grown DTC sales from 16% of revenue to 35%.

Other traditional brick-and-mortar retailers are also trying to break into DTC. Under Armour has expressed a desire to grow substantially in the channel, while Adidas outlined plans for DTC sales to make up 50% of its revenue by 2025.

Overall, DTC sales by established brands (like Nike) in the U.S. are expected to exceed $160b by 2024. Meanwhile, sales from digitally native DTC brands (like Allbirds) are expected to be near $62b.

In any case, brands bypass traditional sales models, and many are rethinking otherwise staid marketing strategies.

Much of this shift is due to the customer expectations that DTC brands, in turn, exhibit. 

In the Amazon age, brands expect direct connection, fast communication and clear expectations. At the same time, marketing and sales have become more experiential than transactional. DTC brands want to reach consumers directly rather than through publishers, retailers or advertising agencies. 

The response from major advertising platforms has been telling. Instagram, Facebook, and other major social platforms have become popular among DTC brands for their ease of use and reach. 

That said, times are changing.

Since Apple began asking users whether they’d allow their online activity to be tracked, only a small percentage have agreed, making it difficult for DTC brands historically thrived within social’s walls. 

According to Polly Wong, president of Belardi Wong, an agency whose client base is ~90% DTC brands, return on ad spend (ROAS) for its brands on Meta platforms (Instagram and Facebook) was down by 23% year over year in January 2022.

For DTC brands that rely on advertising, this doesn’t bode well. In its recent IPO, Allbirds said it spent more than $55mm in marketing-related expenses in 2020. 

Meanwhile, the same year, Casper spent more than $156.8mm on advertising. Finally,  Wayfair spent nearly $1.5b. 

Other platforms are evolving as well. For example, NBC Universal has tried to reach DTC advertisers by pulling them into their online channels. 

“NBCU is offering DTC brands complete campaign consultation, from audience connections and content creation to cross-platform measurement and placement optimization,” writes Jeanine Poggi at AdAge. 

Brands will also have access to in-house data and creative teams. The move makes it clear that DTC brands are cut from a different cloth regarding advertising.

What’s Important for DTC Ad Sales?

Just like DTC brands are using new advertising strategies and platforms are evolving to meet them, ad sales to these brands will have to take on a new form. 

Sales are no longer just sales; it’s the customer journey. Support is no longer just support; it’s the customer experience. Or so go the main tenets of the DTC model. Ad sales reps will do well to play into the DTC hand.

According to research from the MediaRadar, you can expect to find some (or all) of the following attributes in DTC brands:

• Mission-driven. Many DTC brands believe in the value they are offering their customers. Their message is not about the product only; it’s often just as focused on connection or experience. For example, Allbirds’ mission is to prove that comfort, good design, and sustainability don’t have to be mutually exclusive. As more consumers prioritize missions in their purchase decision, these companies will come to the forefront. 
• Younger customer segments. Since most DTC brands are digital natives, they focus on Millennials & Gen Z customer segments. For example, a DTC brand is likelier to advertise via Instagram or TikTok than HGTV. Young consumers will continue to drive DTC brands in 2023 and beyond.
• Brand authenticity. Customers tend to be invested in a DTC brand, meaning emotional marketing works better than other models. Spending for a customer support program may not top ad spend for DTC brands, but it could come close. In fact, 90% of Americans use customer service as a factor in deciding whether or not to do business with a company.
• Quality over price. Many DTC brands take the conversation surrounding benefits vs. features marketing seriously – and product price rarely factors into their marketing strategies.
• Product specialization. In contrast to major retailers or apparel brands, DTC brands tend to specialize in a single product – or highly defined set of products. The Casper catalog – which started as a mattress and now includes just a handful of sleepytime accouterment – is a good example of this focus.
• eCommerce sales. Most DTC brands are digital natives, with sales available only online – from platforms like Amazon to their own self-hosted stores. The same goes for most marketing efforts, focusing on digital channels like social and paid search. The rise of OTT, especially among younger generations, will push ad dollars to these new ecosystems. 
• It’s all about the data. DTC brands tend to be highly analytical – they rely on metrics to appeal to their customers, make their sales, and follow up with great messaging. Most of their sales and marketing efforts are aimed at making tweaks to optimize the funnel rather than to make a big splash. That said, the downfall of third-party cookies will put them in a pickle. They’ll need to quickly find advertising alternatives to drive a return. 

These are the highlights, but they’re not the only elements that make a DTC brand unique for advertising opportunities. 

Check out our follow-up to this piece and our comprehensive guide for more specific tips on selling advertising to a DTC brand.

For more insights, sign up for MediaRadar’s blog here.

With more than 4b people actively using social media, it’s hard to fault the infatuation.

But social advertising didn’t reach its lofty status overnight; it’s been a journey.

The Origin of Social Advertising

While there are many opinions about the true first social media site, 2003 marked the real, initial take-off of social media. Despite various attempts, the idea had never really caught on.

Myspace and LinkedIn were launched in 2003, and Facebook in 2004. These three networks signaled a new and exciting landscape for a rapidly growing number of internet users.

By 2005, both LinkedIn and Facebook had reached 1 million users. For both platforms, the sizable audience triggered the search for advertisers.

Facebook’s first ad appeared in 2005, and LinkedIn’s in 2006.

Facebook’s original ads looked something like this:

In fact, 2006 marked an important year in the social media timeline.

LinkedIn launched its first ad.

Facebook introduced users to its Newsfeed and entered the mobile space.

Twitter went live.

Among the advancements to existing platforms, Twitter seemed to be the first innovative expansion of social media.

Myspace, Facebook, and LinkedIn mostly focused on connecting people with people they already knew.

Twitter, however, was the first social media network to introduce the intangibles of its users, allowing them to express their thoughts in 140 characters or less.

Here’s the first Tweet ever, which sold for nearly $3mm in 2020 :

Compared to now, the original Twitter feed, of course, looks a bit primitive. For example, look at all of the unused space on the page – a present-day-publishers nightmare:

More Photos, Fewer Words

2010 marked the launch of the image-based social media platform, Instagram, followed by Snapchat in 2011.

Since Twitter’s introduction in 2006, this was the biggest advancement in the world of social media.

Users had been offered the chance to share photos on other platforms, but never as the main attraction.

By 2011, Myspace had run its course, while LinkedIn, Facebook, Twitter, Pinterest, Instagram, and Snapchat had all found—or at least started to find—their place in the market.

The social media mountain had finally begun to take shape.

Platform Expansion

Think about how personal the first rendition of Myspace was. Most users would not connect with anyone other than their literal friends and family (and Tom Anderson, the founder of Myspace).

Now, think about what social media looks like today. Almost anyone can connect with anyone else.

That goes for advertisers, as well.

In today’s social media landscape, advertisers can connect with their total addressable audience (TAM).

Because of this ability, social advertising has steadily increased year-over-year.

Social media ad spending will reach more than $268b in 2023. Unsurprisingly, Facebook continues to lead the charge. In 2022, advertisers were expected to spend $58.11 billion on Facebook ads, representing a 15.5% YoY increase.

Other social media platforms have made a name for themselves in advertising.

Snapchat, for example, generated more than $3 billion in advertising revenue in 2021—a figure expected to increase to $5.9b by 2026.

While that’s no surprise, the evolution of social media has taken some unexpected and strange turns.

The Evolution of Social Advertising: 2017-Now

To say the least, 2017 was an interesting year for social media.

Let’s just say there was a minor shift in tone…

When social advertising was first introduced, brands were reluctant to advertise due to the uncertainty of the surrounding content. At the time, the content seemed a bit unsupervised.

Once social platforms started policing their content, brands became more comfortable and adopted social advertising.

As social media platforms gained monumental numbers of users, however, it turned out that they were lacking another form of policing – that of fake content (ads, users, etc.). Twitter is still grappling with this challenge—just ask Elon Musk.

People noticed that some brands, politicians, and celebrities had extremely high numbers of fake followers, engagements, etc.

At first, it seemed like a way for brands to build a reputation.

Later, it became clear that it simply made real advertising extremely difficult – 100,000 Twitter followers no longer represented 100,000 people, making it almost impossible to measure actual reach.

This also built heavy momentum toward sensationalism in social media.

Sensationalism

There are two things to consider here…

First, we have generally seen a rise in sensationalism relevant to politics.

Secondly, one of the greatest traits of social media is its ability to create viral content within minutes, if not seconds.

Put those two traits together, and that brings us to the present.

With fake users, fake content, fake ads, and “trolls” populating social platforms, brands are left with an interesting environment.

Some of them are taking to the environment, however.

When the new year arrived, one notable Tweet sparked quite a bit of controversy.

We’ll let the tweet do the talking for itself:

Needless to say, amongst the masses, there were mixed feelings when seeing this Tweet.

KFC UK & Ireland, however, saw this as an opportunity. They used the controversial Tweet as a way to “troll” the POTUS, take a competitive shot at McDonald’s, and give customers a chuckle:

It’s hard to imagine that in 2006, upon Twitter’s invention and the social media environment of the time, anyone could have forecasted something like this.

After all, it’s more likely that Twitter users will notice Tweets about “nuclear buttons” than they will about any brand on Earth. So, KFC decided to throw itself into the mix.

This was an attempt to play to its audience in previously unavailable ways.

KFC UK & Ireland’s demographic is not emotionally tied to supporting the United States President. However, since this tweet was international news, it decided to capitalize.

This example highlights the social advertising environment in which brands currently exist.

Interacting with users is more personal than ever, yet because of that, there can be heavier political and emotional implications.

But social advertising has advanced considerably in just a few years, offering brands even more powerful ways to connect with consumers:

• Social commerce: Younger generations are increasingly turning to social media to help them make purchase decisions—72% of millennials say social media impacts the items they buy. As social commerce goes mainstream, every major platform scrambles to answer the bell.
  
  Instagram Shopping, for example, is a set of features allowing people to shop brands’ photos and videos across Instagram. Meanwhile, Snapchat recently launched a new “catalog-powered shopping lens” that allows users to try on items virtually.
• Influencer marketing: 61% of consumers trust influencers, compared to 38% who trust brand-produced content. As a result, the social world has become a hotbed for influencers.
  
  Social platforms have responded by introducing ad features that make it easy—and natural—for influencers to connect with consumers.
• More inventory: Facebook, Instagram, Snapchat, Twitter, and LinkedIn have had a stranglehold on social advertising budgets for years—and they still do. But as the social world expands, new ecosystems are forming, and as they do, new inventory is opening up.
  
  TikTok, for example, is expected to have nearly 1b users by 2025. Its advertising engine is benefiting. In 2022, TikTok’s ad revenue surpassed $11b, representing a 200% increase YoY. The direct line to Millennials and Generation Z will continue to attract advertisers in droves—and as that happens, TikTok will rapidly evolve its ad ecosystem.

And it’s not just B2C brands basking in social media’s glory. B2B brands are also getting in on the fun.

As advertisers flock through social’s walls to access one of the most mature advertising ecosystems available, especially as third-party cookies fall by the wayside, all major social media platforms will continue to evolve—and that’s excellent news for advertisers.

For more insights, sign up for MediaRadar’s blog here.

Last year, Instagram announced IGTV — a new featured designed to deliver longform content from Instagram creators, influencers and brands.

Designed to be set apart from certain other online video platforms (including Facebook’s own video feature), IGTV initially made integrated video: it retained the format of Instagram Stories and vertical video a key part of its announcement.

“You could create hour-long episodes of a long-term series, or use Instagram TV as an extension of your standard Instagram profile,” wrote Rebekah Carter at SproutSocial after the announcement.

All of that remains true, but now brands can use IGTV to publish horizontal video. The change was in response to requests from content creators, according to Instagram:

“We’ve learned and grown a lot in this first year. In meeting with creators and viewers, we’ve heard about what they like – and what needs to be improved. Today marks yet another change for IGTV – and it once again comes from listening to our creators and viewers. We’ve heard from creators who want to upload landscape videos for IGTV. Similarly, we’ve heard from viewers who come across landscape videos in IGTV but want to watch them in a more natural way. That’s why we’re announcing support for landscape videos in addition to vertical. Ultimately, our vision is to make IGTV a destination for great content no matter how it’s shot so creators can express themselves how they want.”

In and of itself, the move isn’t a huge one. But some advertisers think that it could be the first step toward monetizing that particular channel of Instagram. And AdAge reports that several advertising executives told them that they have been approached by Instagram about advertising on IGTV.

“The theory is that IGTV’s support for landscape mode will yield a bumper crop of diverse new content, and, by extension, a lift in viewing,” writes Todd Spangler at Variety.

Including horizontal video on the platform certainly makes it more ad-friendly and budget friendly. Up until now, many media companies had to create content specific to Instagram’s platform. With the new change, IGTV can simply become another channel by which to share video — and soon, ad creatives.

Krizelman expressed optimism in anticipation for the release of the official report from Snap Inc. He stated, “We are encouraged, but not surprised, to see SNAP have another positive quarter. The company has a healthy mix of both new and returning clients, has the loyalty of major advertisers like Comcast, Adidas, and Disney, and saw their roster of advertisers swell by 15% in Q1 2019.”

Shortly after Krizelman shared his predictions, Snap Inc. released strong Q1 Earnings. Snap Inc. reported, revenue increased 39% to $320 million in Q1 2019, compared to the prior year.

“In the first quarter we delivered strong results across our business with growth in daily active users and revenue,” said Evan Spiegel, CEO of Snap Inc. “Our new Android application is available to everyone, with promising early results. This month we announced several new products that we believe will drive further engagement and monetization. As we look towards the future, we see many opportunities to increase our investments, and will continue to manage our business for long-term growth.”

Snapchat Key Advertising Insights for Q1

MediaRadar reviewed advertising across Snapchat’s platform. Overall, Snap’s advertisers see success on the platform.

• The number of brands placed on premium Snapchat Discover channels is up 15% Q1 year-over-year.

• 58% of Snapchat’s Q1 2019 advertisers renewed from a prior period, which is a great sign of long-term adoption.

• Snap is also breaking new business. During Q1 2019, 42% of advertisers were new to the platform.

According to their earnings report, as of March, Snapchat reaches 90% of all 13-24 year-olds and 75% of all 13-34 year-olds in the U.S. Snapchat continues to defend the title of one of the most powerful platforms to reach them. MediaRadar shared, during Q1, Snapchat saw strength in the following key categories: Media & Entertainment, Tech, Retail, Apparel.

MediaRadar’s breakdown of Snapchat’s 2018 ad revenue by category

Top Snapchat Advertisers in Q1 2019

According to MediaRadar’s data, the top 10 advertisers on the platform increased their investment in Snap in Q1 2019. Snapchat’s top ad buyers are Comcast, AT&T, Mars, The Walt Disney Company, Adidas, Pepsi, Exxon Mobil, Procter & Gamble, Las Vegas Convention and Visitors Authority, and Verizon.

We anticipate the release of Facebook Inc’s earnings report later today. Snap Inc’s Earnings report was released at 4:10 pm, and stock prices jumped approximately 5% in the first 20 minutes after their earnings were released. Will Facebook have the same success in Q1 2019?

This week, luxury group LVMH sets its sights on luxury real estate with the acquisition of Belmond Group, PepsiCo expands its sports nutrition offerings with the purchase of CytoSport, and AT&T’s WarnerMedia sells its stake of Hulu to allow the parent company to focus on building its own streaming platform.

#1: LVMH Expands Real Estate With Belmond Group

Luxury group LVMH Moet Hennessy Louis Vuitton completed its acquisition of Belmond Ltd. The deal will add to LVMH’s existing hotel portfolio, which already includes the Cheval Blanc hotels and the Bulgari Hotel and Resorts chain. The Belmond purchase adds over 40 luxury hotels, restaurants, trains and cruise properties to the portfolio and is worth an estimated $3.2 billion.

#2: PepsiCo Complements Sports Nutrition With CytoSport Buyout

PepsiCo has officially acquired CytoSport, the manufacturer of protein-enhanced powers, shakes and bars. CytoSport is a sports nutrition company best known for its Muscle Milk and Evolve brands. The deal is the latest in a string of acquisitions taking place under PepsiCo’s corporate “Performance with Purpose” campaign encouraging health and wellness. In this era of decreasing soft drink sales, CytoSport will serve to strengthen Pepsi’s nutrition portfolio.

#3: AT&T Goes All-in On Its Own Streaming Platform

AT&T’s WarnerMedia sold its 9.5% stake in video streaming service provider Hulu LLC for $1.43 billion. At the beginning of the year, Hulu was owned by four major media companies — Disney, 21st Century Fox, NBCUniversal and AT&T. Now, the $15 billion platform is owned by Disney and NBCUniversal after this deal and Disney’s acquisition of 21st Century Fox last month. How Hulu will allocate the 9.5% stake will be determined in the coming weeks.

Although AT&T sold this stake to its competitors, the move also positions AT&T to focus on the launch of its own streaming platform later this year.

In Other News

Smith & Nephew bought biomedical company Osiris Therapeutics to support its burgeoning wound management franchise, Variant Equity bought Coach USA (and its Canadian affiliate), and Vimeo announced its planned acquisition of video creation service provider Magisto.

In one of the biggest deals in the energy sector, Chevron Corporation announced that it has reached an agreement to acquire Anadarko Petroleum Corporation for $33 billion.

Meanwhile, antitrust officials at the Department of Justice have expressed concerns about the proposed Sprint and T-Mobile merger.

Q2 is the most active quarter for RFPs each year by a wide margin, and this year is no exception. MediaRadar expects that over a third (34 percent) of all RFPs in 2019 will be issued during Q2, with the majority concentrated in April as the most active month.

The conglomerates behind some of the most popular CPG, apparel and retail brands — including Sephora, Peet’s Coffee and Gillette — will be putting out the highest number of RFPs this month.

The Top Industries and Companies for RFPs in Q2

With April kicking off RFPs for Q2, brands of all shapes and sizes are eager to put their newly established budgets to good use in the latter half of 2019.

According to our research, the top four industries issuing RFPs this quarter will be:

• Apparel
• Travel
• Retail
• Home Furnishing

The second quarter is big for apparel companies in particular — the industry as a whole issues more than double the number of RFPs than any other quarter. If you’re interested in a deeper dive into the numbers for these categories, or zeroing in on your own optimal RFP opportunities, feel free to check out our brand new RFP predictor tool.

Within these industries, MediaRadar expects the top issuing companies in Q2 to be LVMH Moët Hennessy Louis Vuitton SE, the JAB Holding Company and Procter & Gamble. The three conglomerates are certainly major players in the ad market — they have collectively spent over $3.3B in advertising over the past year.

Advertising for LVMH, JAB and P&G

With dozens of brands between them, some large retail coffee chains and US household staples, it’s unsurprising that LVMH, JAB and P&G spent so much on advertising in the past year.

The conglomerates are also great examples of what it means to take advantage of multiple advertising channels at once. All three companies advertise both on more traditional channels (like TV and print, as well as programmatic digital advertising) and newer, more direct-to-consumer style channels like Snapchat.

Examples of big spending include everything from the traditionally multichannel “What Fills Your Cup” campaign from Peet’s Coffee (owned by JAB) to the delightfully meta “It’s a #TideAd” that P&G put out for the Super Bowl in 2018. By the same token, you’re likely to find ads for LVMH brands (including everything from Hennessy to Hublot) in high-end publications.

Maybe you’re feeling more than a little overwhelmed at the volume of RFPs being issued this month — and the amount of brands they represent. If so, the same team that put together this research on the most popular RFPs of Q2 can help you get ahead of the game in future months and quarters. Use MediaRadar’s RFP predictor tool to look ahead to when RFPs are coming, complete with a handy research dashboard to assess how to position your publication for specific brands.

‘Digital native’ brands, as they are sometimes called, are known by their “reliance on digital storefronts that sell only their own branded goods, product development cycles continuously enriched by first-party data from their consumers, expertise in social media communications, and a marketing mix that blends highly scaled and targeted programmatic advertising with lifestyle-focused content marketing.”

A major theme running through these distinguishing factors is the way DTC brands connect with their customers.

Digital native brands like Warby Parker, Casper, Dollar Shave Club, Bonobos and Glossier cut their teeth on programmatic, personalized advertising efforts. Search ads and social promotions, complete with behavioral retargeting, held more sway than the offerings of more traditional media sellers.

But does that still remain true?

An Expanded Marketing Mix for DTC Brands

While DTC brands are best known for their digital advertising, the big brands have been experimenting with TV ads and billboards for several years. Smaller, more recent entrants like ScentBird and Brooklinen are including subway ads and 30-second TV ads in their marketing mix right away.

The move toward more traditional advertising reflects how many of the biggest DTC brands, principally Internet-based sellers, have slowly but surely moved into physical retail spaces.

While most of the DTC business model is aimed at customer retention, both the move toward traditional advertising and physical retail speak to the co-equal importance of customer acquisition. It’s for this reason Terence Kawaja, LUMA Partners CEO, writes that TV represents the biggest opportunity for DTC brands’ continued growth.

The medium “offers a great opportunity to connect with existing customers over a new channel while also reaching a new audience to continue to expand its customer base,” writes Kawaja. This is particularly true when DTC brands leverage over-the-top television, such as existing streaming services and soon-to-come integrated advertising offerings from giants like NBCUniversal.

The shift toward traditional marketing is also due, at least in part, toward the rising cost of digital ads and the difficulty in effectively scaling highly targeted marketing campaigns. In a marketing field determined by metrics and conversion, using television to reach a new audience is associated with its own set of challenges. Legacy limitations on spend, difficulty in gathering metrics and the lack of first-party data are all potential pitfalls for DTC media buyers that ad sales teams should know how to address.

But the benefit of reaching an entirely new market seems to pay off for many DTC brands. “DTC brands are using TV to broaden their reach to go head-to-head with the incumbent brands that have always been there,” writes Ashish Chordia at The Drum.

In short, the idea that DTC brand focus solely on digital advertising is a myth – at least nowadays. So what is that distinguishes DTC brands in terms of advertising?

What Sets DTC Brands Apart – and How Ad Sales Speaks To Them

The features that set DTC brands apart from their larger (and largely retail-oriented) competitors has less to do with the medium they advertise with and more to do with the way they brand themselves.

Partners & Spade co-founder Anthony Sperduti told Curbed that DTC success is found in minimalist design and simple, direct branding. “The first wave of direct-to-consumer brands born on online—like Warby Parker and Harry’s nine years ago—were really able to take some of those great lessons,” Sperduti said. “Combined with good economics, you have fresh minds offering value and better design than more mature companies that have dated views of design and marketing. You have enough of those, then you have social media, and it starts to become almost a movement.”

All of this reveals that successful DTC brands are not defined by their marketing mix, but by the way they interact with consumers.

“The most successful D2C companies out there win through the kind of brand experience they offer to their consumers, from the reliable deliveries of Dollar Shave Club to the unique marketing of Glossier,” writes Katherine Duh at the Airtable blog. Katherine also put together a knowledge base of the top 25 DTC brands to know that is definitely worth checking out as you dig deeper into the segment.

Ad sales teams can use this knowledge to tweak the way they speak to media buyers, regardless of the medium. Knowing that the priority is on a relationship with the customer, publishers across all mediums can speak to how DTC ad dollars can further that goal. It’s a good starting point for any pitch.