DTC marketers planning to up CTV/OTT spend this year

Direct-to-consumer (DTC) marketers are flooding into connected TV (CTV) and over-the-top (OTT) digital TV advertising, according to a new survey from digital performance media company Digital Remedy and research firm Dynata. Over two-thirds of DTC brands use these channels, and 57% plan to increase spending in CTV/OTT in the first half of 2023. This is a significant jump in interest from the first half of 2022, when 43% of DTC expected to up their spend.

Why we care. CTV is the fastest growing digital ad channel because of its inventory and adtech precision. Brands can fit a campaign into a budget of any size. They can deliver ads to a few hundred consumers in their target demo, or many millions. That’s all due to the wide range of inventory available, from free ad-supported services up to very premium opportunities on ad-supported streamers like Netflix. 

Marketers also have more ways to find their customers on CTV/OTT by partnering with retail media networks.

Dig deeper: CTV added to Kroger’s retail media business

Higher-quality inventory. New platforms and programming continue to be added to CTV/OTT inventory. Consumers now have thousands of viewing options to choose from, many of them free. Additionally, Netflix entered the adtech game last year, offering new ad opportunities alongside their premium films and series.

All of this has spurred DTC advertisers to dip into CTV/OTT. Forty percent of marketers in the study said higher-quality inventory was a reason to increase their budget for the channel. And 38% said measurement capabilities were another good reason.

First-time advertisers. Of those DTC marketers spending more this year than last, 65% are first-time CTV/OTT advertisers.

Where are the dollars coming from? Sixty-one percent say the budget is reallocated from another channel, like social media, search or mobile apps, while 39% said they increased their total media budget in order to allow for their increase in CTV/OTT spending.

Measurement. Another takeaway from the study is that many DTC marketers are demanding improvements to measurement. Less than half (48%) of respondents said they’re satisfied with their current media partner’s incremental measurement. Nearly as many (47%) said they were satisfied with brand lift measurement. Satisfaction with low-funnel attribution was even lower (44%).

DTC marketers see the opportunity in CTV/OTT, even as they seek better ways to measure the channel’s success.