Happy Sunday!
If you’re reading this, I hope you’re sitting back on a couch, drinking some of the finest water (Essentia) and you’re ready to hear just a little bit more about TV.
Before we get into today’s newsletter, I made a note to remember and ask… did you listen to this week’s Limited Supply episode? If not, then it’ll be fun to listen to after the email, to add more color to what we’ll talk about, which is TV advertising.
If you’re in New York and plan to attend Advertising Week, I’m going to be sharing the stage with two friends, Ben Soffer & Claudia Oshry (from The Morning Toast) to talk about how we launched Spritz Society and more on the business side of influencers.
And if you’re not in New York, but want to hear some gems around ad creative, then you’ll want to tune in and hear from Ari Murray, my Chief Growth Officer at Sharma Brands, at Motion’s Creative Strategy Summit. Grab a free ticket on this link. I’m pretty sure you’ll get access to all the recordings.
If you’re an account manager looking for a new gig, or you know someone who is, HOOX is hiring an Account Manager to work with our VIP clients. Apply here!
Lastly, if you missed this Friday’s landing page roast, don’t stress about it. The next one is October 13th. Submit your PDP or landing page here: nik.co/roast.
Ok, let’s get back to today’s topic… TV. In the last month or so, ever since spending a day at the Forward event, I’ve got the bug to do more with TV, both with content and with our Sharma Brands clients. This led me down a rabbit hole of putting together a list of final questions that I still had, even after spending time there and speaking with TV advertisers. So I compiled the answers, and wanted to share them with you. Whether you’re running TV today, or you plan to in the future, I think these notes will be helpful.
Be honest, how many questions do you have about TV advertising?
If you’re anything like me, you probably have a long list of questions that you’d like answered about the channel. For example:
- How much does it cost to create and run a TV ad?
- When and how should I start with TV?
- What is the targeting on TV actually like?
- How’s the attribution?
- How should I approach creative?
- What’s the difference between linear TV and “Connected TV”?
- Does having a celebrity in my commercial matter?
- Is streaming the same as “OTT” or “CTV”?
- What are the average CPMs?
- How do I actually buy a TV ad in 2023?
- How are other top DTC brands approaching the channel today?
Well, hat’s exactly what I wanted to write a newsletter about today. So, let’s get into it. Some of this is derived from my conversations with Juhi (Fabletics) and Austin (Tatari), and some are meshed together from other conversations.
How much does it cost to create and run a TV ad in 2023?
Juhi and Austin helped shatter the myth that you need a $200K+ creative budget and a $100K/month ad budget to make your first TV commercial work. While some brands choose to go the high-production value route, you can get started with a commercial that costs anywhere from $5-50K.
Juhi mentioned that they’ve repurposed ads from Meta for Fabletics and only changed the editing. They’ve also done large scale commercials with celebrities too. Both have performed well!
The lesson here: You can absolutely start on TV with a smaller budget than you think. Spending $10K on production and $5-10K/week on placements can allow your brand to be on TV in 2023. I think that’s pretty cool.
When and how should I start?
When I was leading DTC at Hint, we didn’t test TV until we were spending more than $1M/month on digital ads. At Native, Moiz thinks that they were spending between $1-2M/month before they entered TV. That said, you don’t need to spend $1M/month on digital before you try TV.
In my opinion, you DO want to be spending enough on paid social, where you have a good sense of the demographics, the creatives that are performing, the angles that you should be running and more.
I think once you’ve profitably spent $250k/month on digital for 1-2 quarters, you are ready for TV. It also depends on where you’re selling… if you’re in Ulta or SEPHORA, then adding TV makes a lot of sense to help with sell-through.
The best time to start is when you have something unique to say.
What is the targeting actually like on TV?
For most DTC and digitally native marketers, TV feels like a black box. They don’t quite understand how targeting and attribution works and what’s possible with TV today.
Most of the large companies buy their inventory for the year up front, at an event ironically called the Upfronts. There, you’re likely buying alignment with programs running on TV. However, if you use a platform like Tatari, you can focus on buying Streaming or Connected TV inventory, which allows you to be much more targeted, just like you could with Meta ads.
How’s the attribution?
Attribution has also improved dramatically because modern SaaS platforms that allow you to buy TV have finally taken the pixel approach. Tatari created their own pixel that acts similar to a Facebook pixel.
In the conversation, they joked about the fact that “you can’t click TV” so it’s impossible for it to be as precise as digital ads. That said, they have come a really long way in making the data as accurate as possible. Tatari’s pixel knows the inventory that you bought and measures traffic and conversions during the seconds and minutes after your commercial airs. They are able to create holdouts that isolate this traffic from your other digital spend. Once analyzed, Tatari gives you next day reporting and also provides their version of CAC and RoAS numbers just like Meta would.
I was curious how much time they give themselves in attribution. At Criteo, which does programmatic banner ads, the default is something like 90 days, meaning if you saw an ad for a product, and purchased within 90 days, Criteo will take credit. When I asked Tatari what the accurate attribution window is for sales from TV, they said within 3-5 minutes of the spot airing.
How should I approach creative?-
On TV, you have a choice between running 15, 30, and 60-second spots. The format is 1920x1080 horizontal. Remember, you’re selling on the big screen.
When it comes to the creative element, you should do these 3 things:
- Look at your top 5 ad creatives in Meta over the last 6-12 months. What can you learn about the assets, the angle, the copy, the colors, or the call to action that might work for TV? Use these ads as your starting point to come up with new story-driven concepts for the big screen.
- Try multiple concepts and angles. I was pretty surprised to hear that Fabletics tested 15 creative concepts when they first started experimenting with TV. They ran high-production value assets, lower production value assets, direct response commercials, brand awareness ads and more. Since they were new to TV, they wanted to test a bunch of different concepts to see what worked. After 2-4 weeks of data, they were able to double down on the ads with the best conversion rates and CPMs for their brand.
- Try a “founder story” ad. One thing that worked incredibly well for Native and Hint was the “founder story” creative ads we both ran. As I’ve said for years, people like people, not brands, and they want to hear from and trust the person that they are buying from. Starting with the founder explaining why they started the company and what problem their product solves always seems to work well. It’s what we used at Hint and literally crushed for us for years.
What’s the difference between linear TV and “Connected TV”? & Is streaming the same as “OTT” or “CTV”?
Here, I’m going to answer a few questions in one.
- First, “Streaming” is the umbrella term for any programming that’s delivered via the internet.
- In contrast, cable TV is anything that’s delivered by a cable set-top box.
- OTT means “Over the top” and includes streaming and streaming devices like the Roku or the Amazon Fire Stick. It literally means devices that are “over the top of the cable box.”
- Smart TVs or Connected TVs are just a way to access streaming programming. They are TVs with WiFi or Ethernet capabilities built-in and typically have some kind of TVOS or “TV Operating System” that allows you to access all of your favorite apps natively on the TV.
- Linear TV is the traditional television format where viewers watch shows at specific times set by the broadcasters. It's the opposite of on-demand viewing.
And while we’re here, let’s also cover Programmatic TV and Remnant TV!
- Programmatic TV is the algorithmic sale of television ad space in real-time. Instead of the traditional method of buying TV ad slots through direct negotiations between advertisers and networks or cable providers, programmatic TV leverages data and algorithms to make the process more efficient and automated.
- Remnant TV refers to the unsold inventory of TV ad slots that networks or cable providers offer at deeply discounted rates shortly before the air time.
Sweet, now we’re all caught up on the glossary terms for TV. Now we can all sound smart when we say “OTT” in our marketing convos next year :)
Does having a celebrity in my commercial matter?
Obviously, it’s not a requirement to have known actors or a celebrity in your TV commercial but it can certainly help.
When I think about celebrities, I think about building trust, and earning the right for viewers to want to watch more. When you are trying to get someone’s attention (AKA interrupt the precious hours of their day) putting a familiar face on screen helps you earn the right to share more.
The interesting thing about commercials is that unlike Meta, a winning creative can literally last for years, so sometimes splurging to go above and beyond for TV makes sense because the lifespan of a great TV ad can be a very, very long time.
What are the typical CPMs for TV?
The interesting thing about CPMs on TV is that the creative and category doesn’t affect the CPM price. A 15 second ad for cookware, flavored water, jewelry, etc will all be the same if it’s on the same network and channel at the same time of day.
That said, here’s what does affect TV CPM prices that you should know about:
- Time of Day: Prime time slots (usually 8 pm - 11 pm) tend to have higher CPMs because more people are watching. Conversely, off-peak hours (like late night or mid-day) generally have lower CPMs.
- Day of the Week: Weekend spots might have different CPMs than weekday spots, depending on the programming and target audience.
- Type of Show: Premium shows with high viewership or shows that target a specific, valuable demographic can demand higher CPMs.
- Market Size: Larger markets, like major metropolitan areas, often have higher CPMs than smaller rural markets.
- Live Events: Live broadcasts, especially major sporting events, award shows, or other high-viewership events, can command very high CPMs.
- Channel: Premium or national networks usually have higher CPMs compared to local channels or less popular cable networks.
- Seasonality: Certain times of the year, like the holiday season, might see increased CPMs due to higher demand from advertisers.
To provide specific numbers:
- National prime time TV spots in the U.S. might have CPMs ranging from $25 to $50 (or even higher for top-rated shows or events).
- Non-prime time national spots can range between $10 and $20.
- Local TV spots (depending on the market size) can have CPMs as low as $5 to upwards of $25 depending on the demo.
From what I’ve seen inside Tatari’s platform, most CPMs range from $10-35 depending on the inventory you are trying to buy.
How do I actually buy a TV ad in 2023?
This is the fun part. It used to be that you’d have to have a direct relationship with the network or channel or a third-party broker to buy a TV ad. Now, you can use a platform like Tatari that makes planning, buying, and measuring TV easier than ever before.
Inside their ad buying platform, you can browse inventory among dozens of networks/streaming providers and hundreds of shows. You can see real-time CPMs and bid directly in the platform to fill inventory. The goal with their dashboard is to make it as easy as Meta does to buy and measure digital but for TV.
How are other top DTC brands approaching the channel today?
US TV ad spend is a 60BN/yr industry, and CTV ad spend is expected to grow to $25.9 billion in 2023, according to GroupM’s mid-year forecast.
It’s a MASSIVE demo, and the biggest brands in the world still spend a TON of money on US TV.
Incredible DTC and omnichannel brands like Hexclad, Fabletics, Tecovas, Hint, and Ro have seen amazing results with TV.
I also know for a fact that smaller brands like Moonpod have crushed it with TV as well.
As brands continue to exhaust their paid social audiences and want to diversify their ad spend, I think TV is going to be the best place to look.
For context, in 2023, a whopping 88 percent of U.S. households owned at least one internet-connected TV device, while the number of CTV users amounted to more than 110 million in the US.
This is not a demo to be ignored.
Okay, I hope that was informative, or at the very least, you learned something new. Now, on to some fun stuff…
Vendor of the Week:
Tapcart — A no-brainer add-on to your tech stack if you’re a brand with decent repurchase rates.
Tapcart, in case you weren’t in the know, is like Unbounce or Replo but for mobile apps. It makes building an app as easy as putting together a PowerPoint presentation in school. The entire UI of Tapcart is web-based and allows you to easily drag and drop sections together to build an app within hours.
Having a mobile app, you might think, is a tough thing to pull off — you have to get people to install it, maintain it, continue to add content there, and innovate on it. In reality, it’s not that hard. Your “content” can mimic what already goes out with email or SMS, and that same person/team can handle your push notifications (which are free to send). Maintaining the app is only about 30 min of work per week. And getting installs isn’t hard when you have even a decent customer retention rate or return shopping rate. You just drop an exclusive product or discount in the app and begin telling people to sign up through email and SMS… it builds the list within just a couple of weeks.
Tapcart also just leveled up by launching their Developer Tools, which allows you to build experiences within the app that are no longer constrained by the easy app builder. If you have custom blocks of code you’d like to add, new ways to funnel data back into dashboards, custom app integrations for things like Try Before You Buy or subscription, you can now easily integrate it all into your app.
Check out the new possibilities with Developer Tools on the Tapcart website.
LP of the Week:
Today’s landing page of the week comes from Ancestral Supplements, a brand with over 60,000 customer reviews, to focus on their greens product.
CLICK HERE TO SEE THE LANDING PAGE!
The landing page does an amazing job of staying true to the brand with design details like the background, copy treatments, and use of iconography and is equally focused on pushing a sale or conversion of a new customer.
After an emergency team meeting this morning, we agreed that we would extend the HOOX Black Friday offer by 2 weeks due to an influx of booked calls on Thursday and Friday. So, if you didn’t book a call before but want to make sure we build you something to help make Black Friday a huge success, click here to book a call with HOOX. On the call, we’ll go through our best examples for your category. The timer broke on the site given it’s not supposed to be going on, but rest assured, the call button works!
That's all for this week
I hope you learned something new in this week’s newsletter. For next week, I plan to recap a call I had with one of the largest beverage companies, talking about how to effectively drive “awareness” on paid social without running “Awareness” campaigns, which are a total waste of money.
I hope you have an incredible upcoming week. Get a good sweat in, plan a dinner with some friends, and stay hydrated. Tonight, get those 9 hours of sleep… it’ll be delicious and you’ll feel it the second you wake up.
Have an amazing upcoming week. I’ll see you next Sunday!