 |
 |
|
"Koeppel Direct's media buying expertise has played an integral role in making my company successful. Koeppel generated so much business for our company, occasionally we have to limit their media buys, in order to handle all of the new business." | |
| - R. Gregg Marketer of Senior Products |
|
MEDIA BUYING DIRECT RESPONSE TELEVISION (DRTV) ARTICLE ...... |
P & G, Major Marketers Crowd Into Direct Response TV
By: Jack Neff
Published: 03/07 Advertising Age |
| |
Once a mainstay in the wee hours, the Contour Pillow is being crowded out of
direct-response TV as conventional brand advertisers and fellow DRTV behemoths jockey for insanely hot remnant
TV time.
Changing DRTV
Contour isn't leaving the medium, but it is scaling back in favor of print and more multi-product TV ads aimed
at driving its increasingly important business through such retailers as Bed Bath and Beyond. It's not alone;
Contour's one of several classic DRTV advertisers pulling back or out of the medium as big-brand marketers such
as Procter & Gamble Co. pile in.
TV spending by direct-response advertisers rose about 7% to $3.1 billion last year, according to TNS Media
Intelligence data, which includes only ads for products sold direct -- not ads from the P & Gs of the world that
still qualify for DRTV without actually selling products direct.
Short-form DRTV billings up
Yet while spending is up, fewer campaigns are running, particularly among so-called short-form DRTV, defined as
ads lasting two minutes or less. Response magazine reports that in the third quarter (the most recent for which
data were available), billings for short-form DRTV jumped 17%, to $813 million, while the number of DRTV
campaigns dropped 10% to 1,094.
The inventory crunch appears to have accelerated throughout the year. Short-form spending rose only 2.5% in the
first quarter, according to Response, while the number of campaigns fell just 4.5% from the prior year.
That the cheapest TV time should rather suddenly become a hot commodity is a bizarre twist given the flat-to-down
network TV upfront of recent years. Even though scatter rates have been running ahead of upfront costs in recent
years, they haven't shown the kind of double-digit strength short-form DRTV time has.
Driving up the price
"There are definitely more [brand marketer] players driving up the cost of that time," said Rob Medved,
president-media director of Cannella Response Television, a Burlington, Wis., DRTV-buying shop. "They're
willing to pay more vs. someone who's got to make their money automatically on the front end. The typical
gadget guys selling things for $19.95 needs to return two times his money on the media spend. The guys selling
mortgages or attributing more of their [costs to long-term brand building] are going to be willing to pay more
for the time."
The cost of long-form DRTV -- the 30-minute informercial space that major brand players haven't developed a
taste for -- has remained fairly steady.
Though he hasn't seen any clients drop out, Peter Koeppel, president of DRTV shop Koeppel Direct, Dallas,
does believe high costs may be keeping new entrepreneurs out of DRTV. More established players have
relationships with conventional retailers, which has allowed them to spend less time on DRTV before moving into
chain stores, he said.
Impact of DRTV price increases
Having sold more than 20 million products since 1991, Contour isn't exactly a newcomer. But the rising cost of
DRTV is leading the company to spend more on magazines and online search in addition to bunching several
products into a single-category TV ad, said Scott Davis, CEO of Contour Living. "The costs [of DRTV] are
rising much faster than the viewership," he said.
Still, DRTV remains a considerable bargain compared to general scatter and its more predictable eyeballs.
Because of that, interest from major brand advertisers will probably continue to rise, Mr. Medved said.
Not all conventional DRTV players are complaining. A.J. Khubani, CEO of Telebrands, said his company is having a record
year behind such products as Doggy Steps, the Stick-Up Bulb and Ear Lifts (cosmetic tape for people with sagging
earlobes). "Overall, I think there are still more DRTV hits than ever," he said. "When media rates go up, it's a good
thing. It means less competition."
Click Here to view the entire article
|
| |
|
|
|
