In 2018, Peloton spent more than $140M on television commercials, up from $108.7M in 2017. This investment puts the company near the top of a growing list of DTC brands who are shifting their spend to TV ads as they continue to scale. More significant than which brands are advertising on television, though, is how many digital-first companies are fleeing Facebook and other social channels in search of lower customer acquisition costs.

According to the Video Advertising Bureau, which used Nielsen data to track ad spend, 120 DTC brands spent some $2B on TV ads between January and November 2018, an increase of over $1.3B in 2017. A number of wellness-related companies like HelloFresh and Thirty Madison—parent company of DTC healthcare brands like Keeps and Cove—are also investing in TV ads. Nielsen data shows that, in all, Keeps has spent $22M on television. 

While Keeps didn’t share specifics of the ROI, they did say that 40–50% of their marketing spend goes to TV. Meanwhile, HelloFresh was more forthcoming — Digiday reported that the company attributes its TV ads to an 88% increase in site and app visits year over year.

Of course, television ads aren’t a magic bullet for marketers. In most cases, they’re cost prohibitive. But the willingness and, in some instances, the necessity to test the TV waters is being motivated by the unpredictable nature of paid search and social platforms. As Daniel Gulati, a partner at Comcast Ventures, told Inc.: "CAC is the new rent."

Instead of DTC brands paying rent to a landlord, they have to pay Google and Facebook to be their storefront. But, as these internet giants begin to act more like greedy mob bosses than harmless landlords, a wide range of brands—from upstart to IPO-bound—are diversifying their marketing mix. 

Circling back to Peloton, we see that retail showrooms have been integral to their success. On their website, the company lists 70 showrooms across North America and the UK. Meanwhile, companies like Dirty Lemon and Glossier are making investments into their tech infrastructure to own a bigger piece of the customer relationship and glean more data in the process. The former doubled down on its text message ordering and customer service platform when it acquired Poncho — a text-based weather app. The latter is said to be developing its own social media-esque shopping platform. 

But high tech is only one approach. Others are turning to low-tech tactics like direct mail, billboards, and subway ads in hopes of cutting through the noise. And that’s to say nothing of the burgeoning business of podcast ads where DTC brands give away discount codes like candy. 

In the end, it’s proving to be an all-of-the-above approach for DTC brands seeking to make customer acquisition cost translate to lifetime value. And given the unpredictable nature of platforms like Facebook, an omni-channel strategy and willingness to adapt are proving to be requirements for building a breakthrough brand.