2014 DRTV Media Outlook
February 04th, 2014
Heading into 2014, the direct response television (DRTV) media landscape is facing off for a dose of new challenges as the Canadian consumer market confidence gets a positive boost whilst in Q2 2013 TV advertising stayed at the top and digital media slowly encroaches onto traditional media exposure forms.
Many different factors put a difficulty on the role of the media buyer and planner in the DRTV world.
Online sales, online video, smart-phones, DVRs and tablets continue to expand in the buying process, making the media efficiency ratio (MER) hardter to calculate.
As technology changes so does the environment; viewers have to choose what, where and how they consume their chosen media.
According to (IMS Media Analytics) IMS research, 2013 was positive for both long-form and short-form DRTV media results, as national long-form infomercial programming grew 7.4% from 2012 into 2013.
What DRTV trends can be reported in 2014 heading from 2013?
The trends continue to be strong for DRTV.
Direct response fundamentals remain superior and continue to drive business for clients with advantages that exceeds other options.
Second, DRTV still allows a low cost of entry into TV advertising for brands, business’ and clients.
“This impressive list of new products in the top 10 shows the ever-changing and dynamic world of short-form direct response. On the whole, short-form airings were up significantly, year-to-year. All in all in 2013, IMS measures the national long-form space up 7.4 percent from 2012. This growth is exciting as we move into 2014.” [IMS]
The impressive list of new short-form direct response products in the top 10 list showcases the dynamic nature of the DRTV industry.
What is the outlook for DRTV media in 2014?
Based on 4Q 2013, the outlook for 2014 DRTV looks promising:
A combination of favorable rates and increased Canadian consumer confidence in 2013, from 2012, will help DRTV as it’ll have a huge presence in all 2014 marketing plans.
Marketers now understand that they need to have all the pieces of their marketing working in coordination with a comprehensive campaign management system in place, with DRTV being the driver for overall ROI – whether the sale comes from DRTV, digital or retail.
Marketers have finally taken responsibility of driving consumers to their websites – to allow for drive to retail or actually take online sales into account as part of their core business – as an example, online advertising in Australia represents 27% of total ad spend, up 8x from 2003. [Nielsen]
DRTV marketers will have to pay attention to consumer confidence rates in 2014 as the world economy outlook looks like it is increasing but still weak after breaking free from a long recovery after the global financial crisis. The economic landscape is sustainable for advertisers of 2014 to build investments for long-term growth.
Short-form direct response TV advertising in many different consumer markets is starting to change over to brand-response TV.
These are 30-second spots that promote a URL to drive viewers with mobile devices to visit a website and make a purchase — or to drive viewers into retail stores. Direct marketers test new media opportunity to put product-selling DRTV spots across different media devices and screens.
What are the challenges facing long-form DRTV media buyers and planners for 2014?
The inability to track purchases and leads that come in via DRTV the web. Each year a higher percentage of customers are making their transactions online, and currently most web attribution models are not accurate in determining which specific stations are driving the traffic.
The increase in the number of people that are consuming their online programming through streaming video or mobile has hit traditional long-form programming.
Individuals watching selected television via their chosen format are able to select programming that they enjoy, which directly has consequences on the number of viewers that used to watch TV traditionally.
“SMBs perceive the return on their investment for time spent in advertising or promoting themselves on traditional media as excellent or extraordinary. The traditional media with the highest usage, newspapers, had the lowest perceived ROI, while the ones with lower usage: TV, cable and outdoor, had the highest ROI among the traditional media.”
See: Traditional Media Yields Extraordinary ROI [MediaPost]
The Bureau of Economic Analysis report on Personal Income and Outlay for December 2013 shows a an incline in real disposable income, making consumers more confident to purchase higher priced items from television. Consumers have more access and willingness to use available credit.
Inventory availability – the quality to receive proper credit for retail and online results powered by DRTV sales – and settings achievable target goals.
The biggest challenges to long-form are:
misinterpreting test results for offers that appear minimal
keeping a correct rate composition that will allow for continued profitability for a shorter time period as retail arrangement comes in sooner to the cycle
accurately employing increasing online and mobile consumer response to specific media to best optimize media schedules and consumer response
There may be an improper reaction to supply and demand as incorrect decisions may create a demand for media that is unsustainable due to consumer disinterest which may create an negative effect on the Canadian media buyers who may face future problems with properly judging media programming.
After sometime reflection-effect in the response market where the demand for media time is then squelched because the remaining media is over-valued in relation to perceived response.
The sustained movement of phone-orders to web makes classification of low-volume services a challenging task.
Audience concentration – entertainment consumption is dynamic and increasing at an accelerated rate. More people of all demographics are using DVRs or internet-TV consume content at their own time.
Lots of agencies and advertisers are asking for integrated multi-screen campaigns, it’s difficult to get a constant and comparable measure across a lot of platforms and different devices.
What are the challenges facing short-form DRTV media buyers and planners for 2014?
The biggest challenges for short-form DRTV media buyers are:
maintaining clearance rates that are cost-effective as brand campaigns use direct response
the raise in rate despite the reduced viewership of media
strong local spending forcing brand advertisers to national cable which increases the rates
fewer people are watching TV, thus finding the right audience is critical
Marketers are looking for lower cost-per-orders and higher management expense ratios to close the gap and run campaigns successfully. Media continues to be more fragmented, and finding enough inventory to run a campaign successfully is tough.
The biggest challenges to short-form DRTV media marketers are:
shorter time-frame of products going from direct response to retail
shrinking allow-ables force put pressure on proper media management
varying rates and conflicting service prices
accurately utilizing the increasing web and mobile response to particular media to optimize schedule ROI
With more networks becoming Nielsen-rated, and BBM-rated in Canada, to help grow their general ad sales, this takes away from direct response inventory (or increases rates) so the need for finding new and emerging networks is always there.
As the trend continues for more general advertisers to turn to direct response for various initiatives, we see these campaigns create shifts in the marketplace, mainly driving rates up and at times utilizing day-parts or stations that have been more traditional direct response -focused.
Lead generation campaigns for certain services can negatively impact rates with early scheduling and additional dollar spend.
How much is the growth of the DVR affecting DRTV media?
Various factors have had positive and negative impacts on business and there has been an accountable impact – as that media-sphere has expanded, long form response times has become smaller.
DVRs have increased TV effectiveness and not hurt ratings. Consumers naturally skipped a large portion of ads before DVRs but now these users skip these ads but also pay attention to be able to do so.
When a DVR user sees an ad they are interested in they can rewind and re-watch the advertisement.
The mass majority of viewers that use this technology were never part of the TV advertising that was paying out; after all some viewers will drop off the advertising map all together.
Free-advertising websites such as Kijiji, Craigslist and Gumtree eliminated newspaper revenue in a very short period, which were dependent on classified ads for profit margin.
Although such facts are difficulty to measure, DVR time-shifing has increased in 2013 over 2012, and the tendency to do so is increasing. More viewers are using the search screens, thus long-form programming can now be listed, alongside with other offers.
DVRs will tend affect branded marketers much more than short-form direct response and infomercial companies as most of the DRTV airtime is not showing in prime time when most DVRs are recording.
The DVR industry will open up new roots of media for DRTV producers will need to market prices accordingly as part of the marketing plan.
What do DVRs offer the DRTV industry?
Employing direct response as a ad in the engagement of a consumer and using direct response to generate leads or interest and drive leads online for additional information, promotions, discounts, offers or incentives to buy.
All communication now should guide consumers to growth of brand via social, blogging and being an ambassador of the product or service.
Upcoming technologies present new opportunities:
Emergent trends comparative to consumption of advertising media vary by target demographics so it is crucial for DRTV marketers to understand their target market and how to engage with them.
The largest opportunities are the addition of web-space buyers and how to best draw these with DRTV.
Beyond traditional DRTV, what can response marketers do increase their media planning beyond DRTV buys?
There is a lot of effort going into PR and social media, especially as North American advertisers spend twice as much per user as those in Western Europe.
In 2014 traditional TV/radio/print buying is now not enough to run a direct response campaign successfully. For products sold at retail, successful marketing campaigns need to spend some of their budgets for direct response retail advertising methods, such as e-letters, flyers, newspapers.
Determine new and non-traditional direct response possibilities.
Continue to invest in social media marketing and connectivity, built a strong customer service as word-of-mouth marketing is more effective than any form of marketing communication.
“Ninety-two percent of consumers around the world say they trust earned media, such as word-of-mouth or recommendations from friends and family, above all other forms of advertising…” [Nielsen]
The function of direct response allows marketers to develop strong relationships with their target consumers and integrate these consumers into first and second screen media such as driving from TV to retail and then driving these consumers to apps or mobile, and depending on the target audience, there are a variety of channels to test and run — including TV, print, radio, direct mail, mobile and online.
How can direct response marketers employ online video to benefit their media spending?
Considering a complete social media plan is the wisest use ofs online video – your business’ branding will take your message to potential consumers whilst driving to your website to inform and drive leads.
To effectively use online video content to engage consumers, direct response marketers must create enthusiasm behind a service, product or offer. Video content with a product review or interaction, service testimonials, special sales offer or alerts will help generate positive TV media spend and build long-term ROI.