One of the most innovative consequences of digital marketing and e-commerce has been the growth of direct-to-consumer products.
Building on the direct-marketed trails blazed by Ginsu knives and Time Life Books, this type of product — like Dollar Shave Club, Casper mattresses and Quip toothbrushes — is sold through websites and delivered either digitally or through shipping services, instead of through retailers.
This week, audience-targeting TV ad firm Simulmedia is launching in open beta what it says is the first advertising marketplace specifically for national TV advertising by direct-to-consumer brands. Founder/CEO Dave Morgan said that, while some local-oriented marketplaces have previously existed for this market, to his knowledge this is the first for national buys.
Why does D2C need a marketplace? According to the New York City-based company, this growing sector has had difficulty buying ads they want on linear TV, where the bigger advertisers have better control over such elements as inventory selection.
Called D2Cx, the online marketplace provides access to inventory representing over 200 billion impressions from more than 80 national broadcast, satellite and cable TV networks, a number Morgan expects to climb over 100. Having just launched, the number of advertisers on the platform “is less than ten” at the moment, he said. Although its focus is linear TV, Morgan said that some kinds of over-the-top (OTT) TV inventory will eventually be added. Here’s a screenshot of a campaign dashboard:
D2C marketers, he said, have been frustrated by the large minimum spend requirements, lack of control for placement and slow reporting by the linear TV industry. As digital natives, he said, D2C marketers are accustomed to testing campaigns in small batches, measuring the impact, and then quickly revising and testing again.
What Simulmedia says it can offer. Morgan said his company can offer access to better national inventory, at smaller prices and via an automated bidding platform, because of the relationships and automation it has built up in the TV industry over the last ten years. Simulmedia’s primary business has been a platform and professional services that help brands better target their linear TV campaigns with audience data, in partnership with the networks.
In that offering, as well in D2Cx, he said, advertisers buy on an audience basis rather than, say, across a network, using data about audiences that covers purchasing behaviors, demographics and other targeting characteristics.
The data, Morgan said, is derived from a “super panel” of about 20 million viewers whose anonymized and aggregated viewing habits are relayed from cable set-top boxes and from smart TVs. He noted that aggregated viewing data via set-top boxes is covered by laws governing the cable industry, and user agreements for data on smart TV viewing habits are accepted or not by new owners when they set up the devices.
The bidding for the available TV inventory is conducted in realtime, although the delivery of the ad to the on-air slot is not immediate. Morgan said his company’s goal is to get that delivery down to a few days, compared to the industry standard for linear TV of a week or more.
Those viewing habits are then connected to purchase behaviors and other characteristics by matching the IP addresses and other locators to data from outside providers like Nielsen Catalina, which tracks coupon and loyalty card use in stores and connects that data to viewing patterns and other data sets. In this way, Simulmedia’s goal is to let direct-to-consumer brands find audiences across programs who match their buyer profiles, via a predictive analytics engine that helps determine the most likely customers.
Why it matters to marketers. Marketers working with direct sales brands, like other product categories born in the digital age, are keen on the whole “fire, ready, aim” approach — smaller budgetary commitments that test different ways of reaching their market, and then quickly iterate. A category-specific marketplace for linear TV ads like D2Cx represents one of the many efforts to bring broadcast, cable and satellite advertising into the digital ad ecosystem, where nimble, quick and data-driven advertising is the norm.
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