Direct-to-consumer brands are flooding TV with more ads than ever, but cable networks — not big networks — are the biggest beneficiaries

Networks like NBCUniversal and CBS are pitching direct-to-consumer brands hard to fuel the $70 billion TV business, but cable networks are the ones reaping the rewards of DTC advertisers.

Digital brands like SmileDirectClub and Peloton that have long relied on performance-driven platforms like Facebook and Google are increasingly turning to TV to build awareness.

But according to a new report from analytics firm iSpot.TV, cable networks are actually the biggest beneficiaries of ad impressions from DTC advertisers.

The firm tracked 186 DTC brands spending an estimated $2.3 billion on TV ads between January and September. The data analyzed 2 billion airings and 234 billion impressions between January and September.

While CBS made the top 5 in terms of DTC ad impressions, cable networks like HGTV and CNN had more impressions. iSpot.TV did not say how networks outside of the top five, like ABC and NBCUniversal, ranked.

The five biggest networks for DTC advertisers by ad impressions were:

  • Fox News
  • HGTV
  • CNN
  • CBS
  • Hallmark Channel

"It's not always about 'broadcast prime' — cable networks work," said Emily Wood, VP of business development at iSpot.tv. "These brands care much less about audiences versus transactions with customers. They don't need their core customer to be a die-hard 'Grey's Anatomy' fan on ABC."

Wood added that networks have an opportunity with upcoming red carpet events like the Oscars and Grammy Awards to sell custom advertising programs to DTC brands. Typically, these ad packages are sold to TV's biggest advertisers like Samsung to reach live audiences.

Looking at spending by month, DTC advertisers spent the most in January, spending an estimated $333 million, followed by March with $271 million. August was the slowest month with $226 million in estimated spend.

The number of DTC companies is growing

iSpot.TV also looked at the top spending DTC advertisers. iSpot.TV defines the category as a digital-born brand that is typically less than 10 years old and trying to disrupt a legacy business.

The five biggest DTC advertisers by estimated spending between January and September were:

  • Booking.com ($122 million)
  • HomeAdvisor ($113 million)
  • Chewy.com ($113 million)
  • Wayfair ($100 million)
  • Carvana ($86 million)

Booking.com's parent company Booking Holdings has shifted its ad spend from Google to TV recently. During an earnings call in August, CEO Glenn Fogel said the company spent $1.9 billion on performance-based advertising during the second quarter and planned to move more money into TV.

Booking.com's advertising was heaviest in the 2019 NBA finals in May and June. Other top shows included "Friends," "Law & Order: Special Victims Unit" and "Sportscenter."

"I think brand advertising is always going to be important for anybody who's in the retail business," Fogel said. "I do believe that we need to continue to work on this and improve upon it."

iSpot.TV calculates ad spending using research firm SQAD, networks and public pricing information. It pulls in data from networks' ad catalogs and airings as well as data from more than 12 million smart TVs, according to its website.

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