Author: Karla Crawford Kerr

Title of piece: Growing ‘Unicorns’ With Brand Response TV Advertising

Original Publication: Response Magazine DRMA

Date Published: July 20, 2017

During the past few Super Bowl games, advertisements from prominent tech companies have popped up

between the inevitable ads for Pepsi, beer, and the latest SUVs. Startups have traditionally focused

their advertising dollars on digital channels, but whether it’s a seven-figure Super Bowl spot or a daytime ad on a cable network, TV is becoming an increasingly important part of the startup advertising arsenal.

During the first dot-com bust, TV advertising became synonymous with the excesses of the tech bubble – but now it’s a very different story. Today, brand response TV (BRTV) has emerged as a hyper-growth element for consumer-facing “unicorns,” which are embracing TV as a tool to accelerate their success.

Not all unicorns are right for BRTV and not all brands are meant to be unicorns, but there are factors that can create the perfect storm to help fast-growing companies reach unicorn status.

Why TV?

The realm of advertising has grown incredibly complicated during the past 10 years due to the rise of the internet, mobile phones, tablets, and social media. The market is fragmented, and all the new channels of media consumption present distinct requirements, audiences, and economic metrics. Startups tend to focus their ad dollars on digital channels because it’s cheaper, which is key for businesses with limited resources and/or no revenue. At the same time, large, well-established companies are investing increasing proportions of their ad budgets into digital channels because it’s where people spend their time.

However, for all the growth of digital channels, TV has not lost its relevance or value. American adults watch an average of five hours of TV per day. TV advertising is a prime opportunity to get products in front of a broader audience, raise brand awareness and prestige, and engage potential customers. TV advertising still drives a lot of bank for advertising buck – something that has not gone unnoticed by high-growth startups.

During the past few years, many of the companies that have made headlines for their rapid growth and breakout success have also invested in TV advertising: Dollar Shave Club, zulily, ShoeDazzle, Jet.com, Airbnb, Uber, FanDuel, JustFab, Credit Karma, Blue Apron, Warby Parker, Slack – the list goes on. Certainly part of the appeal of a TV ad is that it says to the world, “We have arrived.” Because they are more expensive, TV ads are seen as a status symbol that only a rarified group of startups are able to tackle. However, it’s much more than that. It’s true that a company must have achieved a certain level of success to be able to spend the money on BRTV – but TV can also instrumental in driving that success.

TV advertising offers a number of benefits, including measurability and accountability. The notion that digital advertising offers greater accountability is fairly common – but inaccurate. Take direct response advertising, which is highly trackable because the initial point of contact and actual sale occur so closely together. Analytics are nothing new for DR marketers, despite the clamoring from digital agencies that claim they own the analytics crown.

TV advertising also streamlines brand recognition and can be held accountable to limited budgets. Instead of shelling out vast sums for premium TV upfronts, startups can buy direct response inventory at a lower cost. And with modern analytics and metrics, companies can track first-time visitors and conversions, meaning they no longer have to spend millions on campaigns and hope for the best. TV delivers accountable advertising that builds brands at a fraction of the cost, while galvanizing immediate and measurable consumer action.

The Building Blocks of TV Success

All the unicorn companies listed above have successfully used TV advertising to fuel their growth, and there are a number of key elements they have in common. TV ads are not right for every brand, nor will they succeed without certain conditions – as well as a smart strategy – in place.

To start, TV ads flop without a clear, recognizable, and enduring brand message. Spots are short and viewers have other demands on their attention. Maybe they are browsing on their phone or get up for a drink during commercial break. Whatever the case, companies only have a short time to convey a message that sticks. Every second and word of a TV ad should be carefully considered.

Second, TV ads work best for companies that have already gained major, mass-market traction because they are casting a wider net, and are thus better suited for products that appeal to a wide audience. If your company is going after a specific and narrow population, then a TV ad is probably not the most efficient way to achieve that goal. Unicorns like Airbnb, Uber, Dollar Shave Club, and Blue Apron have a massive potential market, so paying for the wide net makes sense.

That said, because TV advertising is less niche targeted than many digital campaigns, it’s inevitable that brands will attract leads that fall outside the target demographic. A 40-year-old male might end up seeing an ad directed at 18-24-year-old women, and vice versa. Not all viewers are customers, and this means companies must have a strong and proven conversion funnel to turn eyeballs into results.

Finally, companies that deploy TV ads need to have a plan in place to nurture those leads. In a direct response campaign, there will be people who visit the website, but don’t take action, so following up with email and retargeting via other channels can be an effective way of re-engaging their interest. The most effective TV campaigns are those that work cohesively with campaigns on other channels.

Scaling Up

Brand response TV is a critical component for the consumer-facing unicorn club (and those wishful for the unicorn blessing). The biggest and brightest tech companies are realizing that TV advertising can take their growth to the next level, and that’s an example all startups with big ambitions should be paying attention to. Growing a company is all about getting in front of new users, conveying your message, and engaging them in the product or service. TV remains the most powerful way to do this at a mass scale for those with aspirations of supernatural success.

Karla Crawford Kerr is senior director of marketing for Hawthorne. She is a member of the DRMA Education Committee and can be reached via E-mail at karla.crawfordkerr@hawthornedirect.com.

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