We believe PI represents a good value for DR clients during this economic time.
The current economic climate increases the viability PI. As major advertisers in segments such as automotive, finance and retail reduce spend levels, more inventory is being assimilated by DR and tangentially, PI.
Most advertisers will see a minimal affect if any from the DTV transition. Those who are unprepared for the DTV transition are mostly very low income, rural households and typically not a strong target market.
December was the month that television stations and national cable finally responded to the down economy and became aggressive with their rate negotiation. We found that overall, regional rates were down 50% compared to the same month last year and national rates were down 20%.
Despite record-breaking funds raised by President-elect Barack Obama, total political spending from the election will come in below expectations, about 28% lower. According to preliminary estimates from Borrel Associates, overall spending will total $2.16 billion with about $2 billion spent on traditional media including TV and radio and $17.9 million spent online. Projected political spending was $3 billion.
Overall this was a disappointment election for television; good news for advertisers, clearance levels were much higher and rates lower than projected.
The continuing economic crisis is causing ad rates to plummet even during the typical highest demand time of year, 4th quarter. The largest advertising categories Automotive, Retail and Financial have experienced massive cut to advertising budgets in response to the economy leaving huge amount of available inventory in local and national television.
In theory, due to low demand on television (lower rates) the cost per lead should remain constant. However because of inertia, the television rates are not dropping at the same rate that response is dropping. This is a temporary state, and if the economy continues as is, cost per leads will be corrected with lower station rates.
Even as advertising response declines, it should be noted that demand is quietly accumulating at its normal pace. Your target market may not be responding at normal levels, but the demand is still there and is accumulating as time passes. The response and sales will be realized when your target finally responds out of necessity.
Lately it seems every article about newspapers or magazines is focusing on staffing cuts and tightening budgets. Despite the dour press releases and dire predictions there are still a multitude of reasons to advertise in print. Newspapers and magazines continue to show strong readership numbers across multiple demographic and psychographic profiles.
Print’s broad appeal can in part be attributed to its portability. Consumers bring their newspaper or magazine with them wherever they go – from home to work to travel. Print continues to be a strong part of the media mix making up nearly 40% of all advertising spends as of 2007. (Source: TNS Media Intelligence)
Direct response television advertising has historically been a process of “buy it cheap, throw it up, and see what sticks.” With advertising expenditures of over $6B, no one here is disputing the return or effectiveness of DRTV. That approach can leave some advertisers with something to be desired when they are run through a typical “DR Mill.”
We frequently find ourselves helping clients fix a number of key problems with their buying strategy. These mistakes muck with their media efficiency, siphon their ad budgets, and just plain cost them sales. Once identified, these problems can easily be avoided.