How a DTC Brand Used Tatari's TV Advertising to Drive Revenue and Business Outcomes on Amazon

In today’s competitive landscape, finding the right marketing mix is crucial for DTC brands. One such eco-friendly cleaning product company (and client under the Household agency) discovered that TV advertising could significantly boost Amazon sales. This was demonstrated with an analysis and Marketing Mix Model (MMM) to reveal TV's impact on driving sales across multiple channels (such as Amazon).

The Challenge

The brand operates through multiple sales channels, with Amazon being a major contributor. We suspected that TV advertising had a more substantial impact on their sales than what Tatari’s dashboard showed. To gain a holistic view, Tatari conducted an Amazon Sales Analysis and a comprehensive MMM, seeking to measure TV’s effect on both DTC and Amazon sales.

The Approach and Methodology

Tatari implemented a two-fold analysis:

1. Amazon Sales Analysis: Using timestamped purchase data, Tatari employed a baseline-lift methodology to isolate and measure TV's impact on Amazon sales within a 20-minute attribution window. This analysis was essential in determining how TV advertising influenced Amazon orders in real-time.

At a high level, the methodology of analyzing Amazon purchases attributable to TV is similar to Tatari’s established baseline-lift methodology for web metrics. For this report, we request timestamped Amazon purchase data.

Example of the requested purchase data:

Using an iterative process, the Amazon purchase data will inform the baseline estimation method and response window used for attribution. Below is the company’s response profile, which was estimated through this iterative process. Their response profile indicates an attribution response window of 20 minutes. 

2. Marketing Mix Model (MMM): Tatari developed a robust MMM using over two years of historical marketing spend, purchase behavior, and revenue data segmented by new and existing customers. The MMM evaluated TV’s impact across all marketing channels, accounting for seasonality, holidays, and promotional events.

Key Findings

1. Weekly CPA Index: The Amazon Sales Analysis provided a clearer picture of TV's effect by estimating a blended CPA (cost per acquisition) that included both DTC and Amazon orders. As shown in the Weekly CPA Index Table below, the CPA index was measured across various broadcast weeks, demonstrating that the CPA was often above the desired target (index = 1).

2. Amazon, Tatari, and Blended CPA Indices: A more comprehensive view emerged when analyzing the CPA Indices Table, comparing Amazon, Tatari, and Blended CPA indices over the same broadcast weeks. The blended CPA offers a more accurate reflection of TV's impact across multiple sales channels because it consolidates the performance data from both DTC and Amazon orders. While Tatari's CPA index captures the direct response from the brand’s website, the Amazon CPA reveals additional sales driven by TV that aren’t immediately visible in the Tatari dashboard. By combining these metrics, the blended CPA demonstrates TV’s full contribution to customer acquisition and revenue generation, providing a more holistic view of its effectiveness. The table below highlights these CPA indices, showcasing how Tatari's TV strategy effectively lowered the blended CPA to meet the desired target across several weeks.

3. TV’s Contribution to Customer Acquisition: The MMM showed that TV advertising drove 10% of marketing-driven new customer acquisitions, even though it represented just 5% of the total marketing budget. This efficiency validated the potential of TV as a powerful acquisition channel for DTC brands.

4. Optimal Budget Planning: Tatari's analysis identified the most efficient TV budget level to meet the brand's CPA targets. Based on the diminishing returns curves measured across Amazon and DTC outcomes, Tatari recommended increasing the TV budget by 23% per week, allowing the brand to scale efficiently.

5. Enduring Effects of TV Advertising: TV advertising’s impact was shown to persist, with approximately 25% of its influence carrying over to the next week. This longevity demonstrated TV’s lasting value as an acquisition channel.

The Result

By integrating Tatari’s Amazon Sales Analysis with an MMM, the brand gained comprehensive insights into TV’s role in its marketing strategy. TV advertising was confirmed as a critical driver of both Amazon and DTC sales, reinforcing its contribution to the brand’s bottom line.

Why This Matters for Other DTC Brands

Brands and marketers should go beyond viewing TV advertising as just a driver of direct to consumer sales. As demonstrated in this case study, TV can significantly impact other channels, like Amazon, contributing to overall business outcomes. By using advanced measurement techniques, as shown in the tables and graphs, brands can gain a complete understanding of TV's influence across various sales channels, enabling more informed decisions about their marketing spend and fully leveraging TV as a powerful driver of growth.