Direct-to-consumer advertising is a growing component of the marketing world.
DTC marketers are increasingly leveraging their ad content to take advantage of the power of e-commerce and social media. This isn’t surprising, given the continuing growth of the e-retail sector and the inherently digital nature of modern DTC ads. Direct-to-consumer ads may actually be a perfect fit for the e-commerce world and the marketers who cater to it.
One thing that does come as a bit of a surprise, however, is the degree to which DTC marketers are increasing their spending. According to a new report released by Commerce Next and Oracle, spending on DTC advertising is up dramatically compared to non-DTC marketing techniques used by more traditional retailers. It appears that those marketers focused on DTC advertising are working even harder to expand their reach and effectiveness in an increasingly digital world.
DTC Spending Increases
According to the Commerce Next report, approximately 78 percent of DTC marketers increased their advertising budgets between 2018 and 2019. In comparison, only around 60 percent of traditional marketing agencies added to the marketing budgets for non-digital retail clients within the same time period. This trend comes as global e-commerce sales continue to rise, with projections estimating $4.9 trillion in e-commerce sales by 2021.
For many direct-to-consumer marketers, this increase is also a sign of their continued transition from performance-based marketing to a DTC model. This shift suggests that the direct-to-consumer channel is increasingly effective in branded marketing, especially as consumers become more connected through social media and other online services that make consumers, in general, more approachable through DTC marketing methods.
Trusting in Direct-to-Consumer Ads
Another trend found in the Commerce Next report indicates a significant rise in acquisition spending and investment in technology that makes direct-to-consumer ads easier to deploy.
Marketers are using acquisitions and mergers to bolster their own stakes in the DTC world, a trend that is poised to continue throughout 2019 and into the future. Eighty-one percent of direct-to-consumer marketers cited acquisitions as a top priority in 2018, with plans to increase acquisition spending in 2019.
This trend isn’t limited to digital agencies that focus on e-commerce, either. More traditional marketers are also seeing an uptick in acquisition spending to bring DTC marketers into the fold to strengthen their presence in the digital space. Both traditional and DTC-focused marketing agencies reported increased investment in customer data platforms and personalization technology as well, giving them the tools necessary to directly reach more consumers and more effectively target direct-to-consumer ads.
Trends Toward the Future
Direct-to-consumer ads are hot now, but will they continue to be worth the cost as e-commerce moves into the future?
If current trends continue, then the answer is yes. As e-commerce and digital retail continue to grow in popularity, many marketing agencies are looking for new ways to get their brands in front of consumers. More traditional banner and video ads are less effective as consumers grow tired of ads intruding into their online experiences, and DTC advertising presents a possible way to combat growing online ad fatigue.
The ability to leverage artificial intelligence and increased personalization within DTC platforms will have a major impact on this trend moving forward as well. With interest in personalization technology growing rapidly, the effectiveness of direct-to-consumer advertising will likely continue to grow in the coming years.
Provided that DTC marketers continue to deliver a personal, connected advertising experience that doesn’t overwhelm the consumer like some forms of online advertising currently do, the trend toward DTC advertising as a major staple of brand marketing is only going to continue growing.