This week your Friday Forecasters sat down with Scott Kowalchek, President & CEO of DirectAvenue, a short form direct response television (DRTV) and brand media planning and buying agency. Our aim: to identify trends that may have an impact on the third quarter DRTV media marketplace as well as evolving directions that are likely to impact such advertisers into the future. Here are some key insights and prognostications:
A Soft General Advertising Marketplace Will Create Opportunities: Without the distraction of a national election or global sporting event such as the Olympics or World Cup, overall available inventory for DRTV advertisers should be robust. A weaker up front marketplace could also help leave more commercial avails open for direct marketers who buy unsold inventory at a steep discount, typically at the last minute, as perishable airtime remains unsold. Furthermore, smaller, diffused audiences are resulting in lower rates than a year ago, according to Kowalchek, something that can greatly help direct marketers as they try to make individual airings payout according to their lead or ROI goals. However:
Scatter Dollars & Audience Under-delivery May Pose a Threat: General advertisers who have parked part of their budgets on the sideline in anticipation of better deals to be had in the scatter marketplace may suck up inventory at the last minute that might otherwise go to DRTV advertisers in Q3. Similarly, eroding audiences amid today’s dial of infinite choice may result in audience under-delivery whereby the offending stations and networks will be forced to run free airings to make-up eyeballs that are guaranteed to general advertisers who pay a premium for them. That means that every time a no charge unit is aired as recompense for poor audience delivery, one more unit gets taken off the schedule that might have otherwise gone to a DR campaign.
Paid Program Continues to Erode: Despite what may appear to be conflicting messages in the first two points above, a third component is slowly having an impact on short-form inventory and it is this: the conversion of paid programming or infomercial airtime into original or syndicated programming. To understand why this is happening, one look no further than the DRMetrix Top 10 Long-Form Products rankings. Five of the top ten slots are occupied by infomercial stalwarts Beachbody, Guthy-Renker, and Shark/Ninja, while a sixth – Total Gym – has been on the air in some form for two decades! The lack of growth in overall infomercial advertisers, coupled with changing viewing habits, and waning response have led to a situation where the airtime is simply not worth what the value of the overall short-form inventory might be to a broadcaster airing non-paid programming, according to Kowalchek.
Technology Is Impacting Viewer Choice & Audience Size: Similarly, Artificial Intelligence that suggest what a viewer might enjoy at any given time of the day is rapidly being incorporated into TV platforms. Think of it like your Amazon.com page where it suggests products based upon past purchase behavior, only in this case, what you have been watching is used as a compass to point to content you’ll likely enjoy. HULU is currently advertising this platform innovation and Comcast is set to incorporate it into the next generation of its X1 set top box. Combine this along with other technology such as voice controlled Smart TVs and voice controlled remotes, and suddenly viewers have access to shortcuts that may, in time, render old fashioned channel surfing – and the ability to run across a paid program by happenstance – obsolete.
Direct Avenue CEO & President Scott Kowalchek
Our National Obsession Is Good (for) News: Finally, Kowalchek observes that politics and the 45th President currently occupying the White House, have been a boon for news networks who now carry more live coverage of the Beltway comings and goings than ever before. Note, for example, that all four major broadcast networks – ABC, CBS, FOX, and NBC – as well as all of the cable news networks – carried former FBI Chairman James Comey’s testimony before the Senate Intelligence Committee live. This is a phenomenon unheard of and something we haven’t seen since the days of Watergate and the Clinton impeachment hearings. That means more eyeballs fixated to the news, and more opportunity for DR advertisers who may not be as squeamish about clearing in controversial, pundit-driven programming as some general brand advertisers. As Kowalchek puts it, “It’s reality television, but it’s real.”
Some would say unreal. But just as one man’s junk is another man’s treasure, there are both opportunities and threats in the heap of change swirling around the TV landscape. All of which suggest that this year for DRTV advertisers, third quarter might just be a new “Summer of Love.”
Colleen Ferrier is a seasoned direct marketing expert who specializes in guiding integrated direct-to-consumer campaigns with an acute focus on ROI. Her broad experience has included management oversight of marketing, operations, media, and international distribution. The campaigns she has been instrumental in helping lead to success across her 15+ year career include Pillow Pets, Little Giant Ladder, Dream Lites, and Stompeez. Ferrier has a Bachelor of Arts in Communications from Augusta University, Georgia.
Rick Petry is a direct marketing veteran of over 25 years who has been involved with campaigns that have generated over $1 billion in sales. He provides creative services to both B2C and B2B marketing campaigns and recent projects have included Actegy/Revitive, Education Connection, GOLO, Joybird, and OYO/DoubleFlex. The author of over 200 articles on direct marketing best practices, Petry has a Bachelor of Arts in Cinema/Television from the University of Southern California and an MBA with a Concentration in Marketing and Sales from Marylhurst University.