Latest / The DTC Marketing Podcast with Fexingo: Direct-to-Consumer Brands, Shopify, and E-Commerce Growth / How DTC Brands Use Shoppable Video on Connected TV
Transcript
- Lucas: Luna, I want to talk about a channel that a lot of DTC founders still think of as a 'someday' play — connected TV advertising. The kind where you're watching a show on a streaming service and an ad pops up for a mattress brand, and instead of just a logo, there's a QR code or a prompt to press 'OK' on your remote to learn more. Luna: Right, the shoppable TV ad. It's been around a few years, but I get the sense it's hitting a real inflection point right now. Lucas: Big time. eMarketer projects connected TV ad spend in the US will hit thirty billion dollars in 2026. That's up from about fifteen billion in 2022. And the growth is being driven by performance marketers — DTC brands — not just the CPG giants. Luna: So what changed? A few years ago, CTV was basically just a reach play. You ran a pre-roll ad, hoped people remembered your brand, but you couldn't track a direct sale back to it. Lucas: Exactly. The shift is really about two things. First, the technology that enables the 'shoppable' part — QR codes on screen, or integrations with platforms like Shopify that let a brand serve a mini product carousel right in the ad unit. Second, the measurement side. You can now match exposure to a TV ad with a website visit or a purchase using identity graphs and retailer data. Luna: Let's talk about that measurement piece, because I think that's where a lot of founders get skeptical. How do you really know the person who saw the ad on Hulu is the same person who bought the product on their phone an hour later? Lucas: Fair question. The most common method is what's called automatic content recognition — ACR — which is the technology smart TVs use to identify what you're watching. Brands work with a demand-side platform that has ACR data from, say, Vizio or Samsung TVs. They serve an ad, then they see if that same household's IP address shows up on the brand's website within a certain window. It's probabilistic, not deterministic, but the match rates have gotten much better — we're talking sixty to seventy percent match rates on household-level data. Luna: And then there's the retailer data route. You have brands like Allbirds running CTV ads that drive people to Nordstrom or REI, and then those retailers share back purchase data. That's a closed-loop measurement. Lucas: Precisely. That's the holy grail for many DTC brands that also sell wholesale. If you're only selling on your own site, you rely on the ip matching approach or on QR codes as a direct response mechanism. But the retailer-data route gives you a cleaner signal. Luna: I want to zoom in on a specific example. I recently read about a brand called Hug Sleep — they make the weighted sleep sack for adults. They ran a CTV campaign on Hulu and Paramount+ using a QR code that led to a product page. Their reported return on ad spend was 4x. That's impressive for TV. Lucas: It is. And what's interesting about Hug Sleep is they're not a huge brand — they're a classic DTC startup with a single hero product. Their average order value is around a hundred and fifty dollars, which is key. For CTV to work, you generally need a unit economics that can support a higher customer acquisition cost. TV ads are cheaper per impression than search or social, but you need more impressions to get a conversion. So if your product is a $20 subscription, it's harder to justify. Luna: Right. That's why you see a lot of mattress brands, luggage brands, and apparel brands jumping in. Higher price points. But also, those categories benefit from the emotional storytelling that TV allows. A 30-second spot can build brand feeling in a way a Facebook carousel can't. Lucas: That's the brand-building argument, and it's valid. But I'd push back a little — one of the reasons CTV is growing among DTC brands is that it's actually becoming more performance-oriented. Platforms like MNTN and Basis let you set a target CPA and the algorithm optimizes toward that. You're not just spending for brand awareness; you're buying conversions. Luna: Okay, but what about minimum budgets? A lot of DTC brands that are bootstrapped or early-stage might hear 'connected TV' and think it's a six-figure commitment. Lucas: It used to be. Two years ago, you needed at least $50,000 to run a meaningful test on a platform like MNTN. Now I've seen brands run tests with $10,000 or even $5,000 a month, especially if they're targeting a very specific audience — like 'women 35-54 in the top 10 DMAs who have visited your site in the last 30 days.' The programmatic platforms have gotten more efficient at frequency capping and retargeting, so you're not wasting impressions. Luna: That's a good point about retargeting. I think a lot of people still picture TV ads as spray and pray. But you can actually serve a CTV ad only to households that have already been to your website. That's basically a retargeting play, but on the big screen. Lucas: Exactly. And the click-through rates on those retargeting CTV ads are surprisingly high — I've seen numbers around 1 to 2 percent, which doesn't sound like much, but remember, this is television. A 1 percent click-through on a TV ad is enormous compared to the old days of direct response TV. Luna: And the cost per click is often lower than search or social, because the inventory is cheaper. But there's a catch, right? The creative requirements. You can't just repurpose a Facebook video. Lucas: You can't. The best-performing CTV ads are shot specifically for the medium — they lead with the problem, show the product in use, and include a clear call to action that works on a 10-foot screen. A lot of brands are using user-generated content style footage, which feels more authentic and costs less to produce. But you still need to think about sound design, because many viewers watch with the volume off. Luna: Subtitles help. But also, the QR code becomes the visual anchor. If you don't have a clear reason to scan right there, the ad fails. Lucas: Yeah. And there's an emerging best practice around 'QR code placement' — don't put it in the corner. Put it center screen, or have a human hand hold up a phone with the code. That drives significantly higher scan rates. Luna: Let's talk about fraud. CTV ad fraud is a real concern — bots can simulate household views. How do DTC brands protect themselves? Lucas: It's a genuine risk. The IAB estimates that CTV ad fraud could account for 10 to 15 percent of impressions in some programmatic buys. The best defense is to work with verified supply sources — direct integrations with platforms like Hulu, Roku, or YouTube on TV — and to use a third-party verification partner like DoubleVerify or Integral Ad Science. Also, never buy CTV inventory from open exchanges without pre-bid filtering. Luna: And the measurement side helps. If you're tracking actual conversions, you'll quickly see if a channel is delivering fake impressions. That's the beauty of performance-driven TV — the numbers don't lie. Lucas: Exactly. And that brings me to a point I think is underappreciated: CTV is actually one of the most measurable offline channels now. It's more measurable than linear TV ever was, and in some ways more measurable than radio or OOH. If you set it up right, you can track from impression to purchase. Luna: Speaking of setting it up right — what's the one piece of advice you'd give a DTC brand that's thinking about testing CTV for the first time? Lucas: Start with retargeting. Take your existing website visitors — people who've browsed but not bought — and serve them a CTV ad featuring the product they looked at. That's the lowest-risk entry point. You already know they're interested. The cost per acquisition is usually lower than prospecting. Once you see that working, then expand to look-alike audiences and eventually to broad targeting. Luna: And creative — test at least three versions. A product demo, a testimonial-style video, and a problem-solution narrative. See which one drives the highest scan rate. Lucas: Exactly. And measure scan rate, not just click-through. Because on CTV, the 'click' is often a second-screen action — someone scanning the code on their phone. That's a different behavior than clicking a link. Luna: I want to pivot slightly to the future. Where do you see CTV going for DTC brands in the next 12 months? Lucas: Two trends. First, the integration of shoppable ads directly into the streaming experience — you'll be able to buy without scanning a code, just by pressing a button on your remote. Roku is already piloting that with some brands. Second, the convergence of CTV and retail media networks. Amazon, Walmart, and Target are all building CTV ad products that tie directly into their retail data. For DTC brands that also sell on those platforms, that's a massive opportunity. Luna: So it's not just about TV anymore. It's about connecting the living room to the checkout line. Lucas: Exactly. And if that sounds like something you're thinking about for your brand, I'd say don't wait. The cost of entry is lower than it's ever been, and the measurement is good enough to justify a test. Start small, learn fast. Luna: I think that's a great note to end on. And if these conversations have sparked something you've actually used or plan to test, that's exactly why we do this. A couple of dollars a month is genuinely what keeps these going. Lucas: Yeah, it's small amounts from listeners who find value in the show. Buy me a coffee dot com slash fexingo. It makes a real difference in keeping the podcast ad-free and independent. Luna: Right. So back to CTV — I think the key takeaway is that for DTC brands with strong unit economics, connected TV is no longer a luxury. It's a viable performance channel. Lucas: Absolutely. Thanks, Luna. And thanks to everyone listening. We'll be back next week with another deep dive.