Happy Sunday!

If you’re reading this, I hope you’re sitting down on a plush couch, feet up, beverage in one hand (maybe some watermelon ARMRA), and you’re ready to take some notes. Today’s newsletter is a long one.

Happy Mother’s Day to all the incredible moms today. There’s no business school that could ever compete with teaching what it takes to be a mom, but somehow they do it. A big special shout out to my mom, who’s also been the designated CFO to all the things I do and for always being the person I can call on my walks home from the office. I love you mom!!

Before we get into it, did you get a chance to listen to this past week’s episode of Limited Supply? We talked all about Glossier’s new website, Walmart selling Bonobos, Facebook tactics with shops, and more. You can check it out on Apple, Spotify or YouTube. Also, you should join the ~3k community members in the Limited Supply Slack: click here to join for free!

Ok, buckle up. This is a long one.

Today’s newsletter is about one of the most under-discussed marketing channels in DTC. I don’t see many articles or threads about this topic, but I know there are a few people in my network who are responsible for a lot of success behind DTC brands using this channel. Over the next few months, I’ll find a channel or tactic I want to dive deep into, and get some help from other friends who I consider experts in their field. The goal is to take niche tactics or skills within DTC (like TV advertising) that are not openly dissected at a high + low level and make them easy to understand for everyone. The more you know, the smarter you can be with your own business.

For today’s email, I’m not talking about direct response YouTube ads or shipper-insert exchanges… Today, I’m talking about TV and CTV ads, specifically for brands that want to get on and test the channel for the first time.

To be clear, TV and CTV is quite a big jump. TV is usually something that comes for 1 of 3 main reasons:

  • You have an arbitrage opportunity available (i.e. JUDY prep kits getting on TV during the pandemic)
  • You’re just getting into or already in retail/physical stores and you need to drive awareness (i.e. Cirkul Water, Hint Water, Harrys, etc.)
  • You’re scaling customer acquisition and need another channel to build on top of your existing ad-tech stack. 

If you’re in the last bucket, you’re probably spending at least $500k to $2M per month on Meta and Google ads, alone. What I’m saying is… if you’re not one of those 3, don’t try to push your budget into TV, it might just be a waste of your time if you don’t have a sense of what messaging, funnels, and offers already work. Last disclaimer… I don’t know how much of this applies to brand awareness TV campaigns. I’m not writing this email through that lens, so fellow brand marketers, please don’t come for my throat here.

Also, before we begin, big shoutout to my friend, Greg Schwartz from Household.TV, who has a TV production and media buying company in NYC. Greg has helped brands like Solgaard, Fresh Clean Threads, Public Rec, HumanKind and others shoot and place TV ads. He’s great, and helped with the research and stats for this newsletter this week. 

Here’s what we’re going to cover in today’s email:

  • Pricing
  • TV vs CTV vs OTT Inventory
  • Why TV Ads
  • Measurement
  • Creative

Okay, let’s dive in…

Pricing

So to be transparent, this is a bigger pill to swallow than what you may be used to, if you haven’t previously gone outside of the digital channel ecosystem. It’s not an easy thing to stand up, which is why you want to make sure you qualify to be a good candidate to test TV. With TV, just testing something once doesn’t work, you have to be in-market for a little bit to really understand the benefits you’ll reap from the channel. That said, here’s a quick checklist to ensure you’re a good candidate for TV:

  • You have at least $7M to $10M/year in top-line revenue.
  • You have battle-tested customer acquisition funnels that you’ve tested and optimzied to be the best they possibly can be.
  • You have the ability to test TV with a solid $150k budget that you’re OK to lose.

When testing any new channel, there’s obviously a high chance you’ll be able to make it work, but you should always think about test budgets as something that you’d be ok with losing completely. It’s like a gamble. Now, hopefully, with the right strategy, tactics, and tips you’ll be able to make a channel work for you within your test budget, but worse-case scenario, think of it like an investment. 

Out of the $150,000 I mentioned above, here’s how you should think of that breakdown:

  • This allows you to properly test what works, and what doesn’t work with enough room to test different placements, networks, and types of TV media to buy (more to come on that below). 
  • This budget can scale depending on the production value you believe you need to have (i.e. Hexclad’s TV ads are a full production versus a small scrappy setup), and allows you to produce, edit, and test enough angles and hooks.
  • With any new channel, it’s smart to hire a channel sniper, which is what I like to call people like Greg who know the channel’s industry, people, practices, tips, tricks, strategies, and insider knowledge inside and out. The same way you know your own product’s industry inside and out, that’s how people like Greg know TV.

So yes, it is pricey. If you don’t have ~$150,000 to set aside, then that’s fine, just wait. There’s no point in doing this without everything above in place. You’ll run into the same problem that every big company runs into, of “We took the best creative on this channel, and ran it on the new channel and it didn’t work, therefore this channel doesn’t work and it’s a bad investment.” And then they wonder why they’re 15 years behind the leading brands in their own categories. Don’t test with a lazy approach — you need fresh strategy, fresh creative, funnels that match the customer experience, etc.

Lastly, the timeline for this $150k investment is about 8-12 weeks. Within that timeline, you can do everything we’re talking about in this email.

TV vs CTV vs OTT Inventory

If you have a public LinkedIn and you’re a marketer, there’s a very high chance you’ve gotten targeted with cold DMs and cold emails from companies claiming to do linear TV, OTT (over-the-top TV), and CTV (connected TV). Because the way a lot of marketers have learned the difference between the 3 is by listening to sales pitches, there’s a lot of cloudy waters here. Let me first break this down and explain WTF these all are, and then we’ll talk about how Greg recommends approaching this.

Linear TV: This is the traditional format of television that most of us grew up with. It's based on a schedule set by broadcasters, and audiences tune in at specific times to watch their favorite shows or live events. Advertisers buy spots that air during these shows or events, reaching a broad audience. However, this traditional model has its limitations. It lacks the personalized, targeted advertising capabilities of digital platforms, and its reach has been gradually declining as viewership shifts towards digital platforms.

CTV (Connected TV): Connected TV refers to any TV that can be connected to the internet and access content beyond what is available via the broadcast networks. This includes Smart TVs, as well as devices like Roku, Amazon Fire TV, Apple TV, or game consoles that allow the TV to access internet content. The key aspect of CTV for advertisers is that it allows for more targeted, personalized ads compared to linear TV. It combines the advantages of digital advertising with the large screen and immersive experience of traditional TV.

TL;DR: CTV really allows you to run ads with the big screen medium as if you’re running ads on FB — targeted and into a programmatic exchange to bid on placements. 

OTT (Over-The-Top) TV: OTT refers to any content that is served to the viewer directly over the internet, bypassing traditional broadcast television platforms that control or distribute content. This includes services like Netflix, Hulu, and Disney+. While similar to CTV, OTT is more about the service, while CTV is about the device used to access the content. Ad-supported OTT platforms allow for targeted, personalized ads similar to CTV, but subscription-based OTT platforms often offer ad-free experiences.

For the most part, performance-marketing-focused brands buy media on CTV and linear TV. You can absolutely buy on OTT platforms, too, but for many, the CPMs don’t make sense, and there isn’t a proportionally higher return on the investment, to justify the CPMs.

When you start out with buying TV ads, it’s recommended to start with linear TV. You want to focus on a type of placement called remnant ads. WTF are remnant ads?

In the world of TV advertising, there are prime spots that are in high demand. These are typically sold well in advance and fetch high prices due to the expected large audiences. This could be in the middle of a popular show's time slot or during a major sporting event, for instance.

But not all advertising slots are created equal. There are times and programs that are less popular, and consequently, less in demand. The ad slots during these times are what we call remnant TV ads.

Think of it like an airline selling last-minute tickets at a reduced price to fill up a flight, or a hotel offering discounted rooms on a night they're unlikely to be fully booked. The idea is the same: it's better to get some money for these ad slots than none at all.

For DTC brands, remnant TV ads become the perfect place to begin your linear TV strategy. They're often significantly cheaper than prime time slots, however, the trade-off is that these slots might reach fewer people, and it might be at odd times. That said, it’s important to note that remnant doesn’t just mean overnight or low viewership inventory. You can buy remnant inventory in any rotation (prime, weekend, etc) on any network, at heavy discounts. This includes buying up unsold ad inventory at $1 to $3 CPMs on huge networks like ESPN, HGTV, CNBC or smaller networks like The Outdoor Channel, True Crime Network or The Country Music Channel.

With this approach, the breadth of reach, and ability to directionally target your customer base (you know the type of person who’s watching ESPN versus who’s watching HGTV) is where the most value lies. 

Once you find your footing with TV and optimize the creative, offer, and funnel for performance, then it makes sense to layer in streaming (OTT) platforms, first through low-CPM publishers (Paramount+, Viacom, Tubi and Pluto) which are generally sub-$10.

OTT content is always delivered through a CTV device, meaning you have to be able to use a smart TV, an Apple TV, or something like a Roku to access Paramount+ in the first place. The OTT player’s ability to provide an ad exchange, and the CTV player’s ability to provide data and insights into the viewer is what makes this a powerful combination.

Budget-wise, your OTT/CTV budget is generally 20-30% of the linear TV budget. It’s not as strong for finding new customers, but it does really well with retargeting, and as you get ramped up on linear, the prospecting side of streaming TV ads works more effectively. The longer you’re live on TV, the more efficient you’ll feel as the conversion cycles will feel quicker.

In Greg’s opinion, which was an interesting insight to me, if you cannot afford to start with linear TV, then the second best place to start is by using OTT/CTV placements to just retarget website visitors with ads for your brand. Your commercials will air on CTV devices of people who’ve been to your site and not purchased, and because it’s a programmatic buy, you can scale these budgets up and down with your own brand’s seasonality. Plus, with streaming, a 15-second and 30-second commercial cost the same amount, so you get some more room to demonstrate why you’re great.

So the final TL;DR on placement:

  1. Start with linear remnant TV ads. You need to have that $80k to $100k budget ready to deploy. Starting with a $25k budget, with $10-25 CPMs doesn’t give you enough reach to make a dent to understand whether or not TV is a viable channel for you.
  2. Once you begin ramping up and finding angles that work, you increase your media buys on linear TV and begin introducing streaming (OTT) media buys. These will account for ~25% of your total TV budget, and will help you ramp up prospecting efforts on TV.
  3. If you cannot put forth the $80k budget, and just want to test angles, you can test with website retargeting on connected TV devices, but this only works well if your traffic has a large enough sample size.

Why TV Ads?

It’s cheaper than you think, to test. Remnant ads can be $1 to $3 CPM, to get on a prime network like ESPN or CNBC. Meanwhile on Connected TV (CTV), you’re more likely to pay $10-30 CPM, but you’re also targeting the user, not the content.

Increase in search traffic and awareness. If you’re creative does a phenomenal job explaining who you are and what the problem is that you solve for a customer, you’ll see a direct correlation to branded search traffic and inbound interest. When running a sale, by including the promo code on the creative, you’ll also see a direct impact on site traffic, sales, etc. Sales are great, but by getting someone to even type into google, “Hint Water TV” and then seeing the TV offer linked in the sponsored Google ad up top, you’re winning.

This is where it’s extremely important to have a proper funnel built out that is battle-tested. We’ve built a few TV-focused landing page funnels at HOOX, and for this to work well, we’ve found that we need to:

  • Ensure the creative on the landing page is similar to that of the TV commercial.
  • Ensure that the landing page does a good job of collecting first-party data (1P data), as quickly as possible. This might even mean running a giveaway to increase the opt-in rate of the 1P data, but remember, it’s still a pre-qualified audience if they’re on this LP from the TV commercial (they’re showing high intent here). 
  • Have a bullet-proof offer here — if you’re a consumable brand, have a higher discount to get the first purchase. If you’re a one-time purchase, play less with discounts, and more with gifts that you can add onto the order itself.
  • Ensure you communicate the credibility of the brand, the safety of customer information (those credit card secured logos and icons), what the brand is and who’s beind it, the problem you’re solving for them, and how soon they can get it if they order right away. It also doesn’t hurt to add BNPL providers listed on the page.

Overall, you have to treat TV traffic like it’s very upper TOF traffic that can leave at any time, so there’s no time to BS on the landing page. Be fully in service to the person coming to your brand’s landing page, and make sure you deliver value right away.

Increased performance on other existing ad channels. A lot of brands we work with have seen they hit a point of diminishing returns on platforms like Facebook or Google. Meaning, there’s a ceiling for when they spend their budgets, and the CPA just balloons to a point where it doesn’t make real sense to continue scaling the account budgets. Running TV expands your brands awareness so much, allowing for you to increase the ceiling on that point of diminishing returns for your digital ads. With some brands, we’ve seen Facebook budgets increase by more than 3-4x within 18 months of turning on TV ads. 

Additionally, for the months and quarters after you run TV, it’s very common for brands to see their CPA decrease on their other existing ad channels. This is often called the “halo effect” that brings second order efficiencies to your existing digital ad spend on Meta/Google/TikTok etc. 

The infamous “as seen on TV” badge. It’s the stamp of approval that only a select few, the top 1% of retail brands, will ever have. Being a product that’s sold on TV automatically establishes a sense of trust with the viewer, as its engrained in our mindset that “Being on TV” is a huge deal. 

Measurement & Attribution

According to Greg, the best approach for measurement and attribution is two-fold and sometimes three-fold (only 10% of the time). For 90% of the time, here are the two things you want to focus on:

Customer Post-Purchase Surverys. Surveys are the absolute best way to measure lower-funnel performance. While your GA data might argue that this person came from a branded search ad, the post-purchase survey will tell you they were prompted by the TV ad that aired on a specific channel. With KnoCommerce, we can ask multiple questions and have about a 67% completion rate with 7 questions — highly recommend using it.

Spike Measurement Analysis. You can do this directly inside a platform like Tatari (where you buy the media) or Northbeam (your go-to attribution platform) and use this data, in conjunction with surveys to understand which individual ad creative, network, and rotation contributed to the sales generated from TV.

For the special 10% of the time you’re running a big sale (Memorial Day, Christmas, Black Friday, Cyber Monday, Mother’s Day, etc), you can also add:

Coupon codes and/or vanity URLs. You want to make this as easy as possible for someone to remember for an hour, or for 30 seconds while they shuffle around and grab their iPhone. This can be something like TV20 or “Visit drink hint dot com backslash TV”. In both instances you are keeping it simple, and you can have that shortened URL back out and include full UTM parameters as a part of the link.

There is a misconception that every TV ad should include a coupon code, and I think if you’re a brand like HelloFresh and running 1,200 versions of ad creative, then it can only help with directional creative analytics and attribution. However, for the most part, you want to focus on how the brand/product will improve someoness life and the brands name. That’s why your favorite insurance and telecom commercials all have jingles, or a steady figure (like Flo from Progressive) to make sure you have the brand name engrained in your head.

Creative

Fundamentally with TV creative, you want to tell a very clear, concise, and easy-to-understand story about how your brand or product makes the lives of your customers better. Including a demonstration of the problem, the ingredients that make up the solution, how the solution works, and the benefits of the solution to the customer (at the end, focusing on benefits specifically, not value props), all make for high-performing TV ads.

Unless you’re Nike, I strongly encourage you to NOT just run abstract, motivational videos with no offers that are just about the lifestyle associated with the brand. Unlike with paid social ads, concise storytelling is more valuable than abrupt jolts and quick cuts.

As you produce your creative, you want to focus on generating 2-3 concepts that you can test with 4-6 angles or hooks in the beginning to A/B test. In your planning of the creative, you should overcompensate for what you think you’ll need. Get all the extra shots, cuts, takes, and angles you think you’d ever want to test, within reason. The beauty of TV creative, is once something gets tested and starts working, you can have a piece of creative efficiently run for 3 years in a row, with no change to the performance. 

Okay, that’s about it. That should give you a good sense about what it takes to do TV. Does that answer most of your questions about how to approach the channel? What else would you like to know? If you have more questions about TV, just reply to this email and either Greg and I will try to review and respond.

Now, onto some fun stuff…

Vendor of the Week:

Retention.com — The secret tool that Dr. Squatch turned on to weaponize their lower-funnel email sequences in Q4, 2022.

At the end of summer 2022, Dr. Squatch brought on Retention.com with a very specific goal: Dr. Squatch wanted to grow their email list of bottom-of-funnel, warm leads, in advance of the Q4 holiday rush. Just like you and me, they had concerns around deliverability, spam score, and brand reputation. 

The end result of turning this channel on with Retention.com was a 50x ROI ($20k in platform spend with Retention.com and $1M in revenue generated through email sequences with new customers), and Retention.com became Dr. Squatch’s #1 source of email revenue.

The entire campaign was a 3 month flight. You can click here to read the case study for yourself. It’s actually quite impressive. If you have the traffic and you’re focused on performance marketing, I’m not sure why you wouldn’t turn this on.

Check out the Dr Squatch & Retention.com Case Study here!

LP of the Week:

This week’s landing page actually comes from the Sharma Brands side of the house today, under Bailee Cooper’s team. This is for one of the most beautiful wine brands, Juliet. In this landing page, we focused on pricing testing (sorry, the pricing won’t work for you, as it’ll skew our results).

CLICK HERE TO SEE THE PAGE!

My favorite part of this page is how it shows up on mobile. The UX of the page is so beautifully minimalistic but gives you enough information, and everything you need to know to decide if this is a good purchase.

If you’re spending at least $1M per month on ads, and you’re ready to get more aggressive with your CPA targets and conversion rate, then book a time with us at HOOX. As of Monday, May 15, 2023, we are going to focus exclusively on more enterprise clients, and take a more iterative and collaborative approach to testing, learning and optimizing landing pages. You can setup a call here to see if you’re the right fit for our HOOX Enterprise program.

That's all for this week

If today’s newsletter is slightly late, that’s my fault. It’s less than 45 minutes before send time (7:15pm EST on Sunday), and I’m still writing this very sentence. Today’s newsletter was a long one — this is page 9 on a Google Doc.

I hope you got some value from this, and it inspired some thinking about running TV ads.

Get those 9 hours of sleep tonight, and get ready for another exciting week. If you’re in LA next weekend, holler at me! Maybe we’ll do a meetup with Limited Supply fans.

Have an amazing week!