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.

President Barack Obama and his transition team are urging Congress to delay the nationwide digital TV transition, scheduled for Feb 17, from analog to entirely digital signals. The call to delay is a result in a shortage of $40 vouchers issued by the US Dept. of Commerce to consumers to use toward purchase digital conversion boxes.

As of December, 93% of US HH are ready for the conversion.  There has not been a decision about the date change.

NEW YORK (AdAge.com) — By the time final numbers are crunched tomorrow morning, President Barack Obama’s inauguration likely will have been watched by more people and on more platforms than virtually any other televised event in U.S. history — including the Super Bowl. This year’s biggest winner: the web, with cable news, social networks and even sports leagues capturing a record share of viewers tuning in and live-blogging online throughout the afternoon.

We witnessed our clients’ CPL drop during the month of December.  We conducted an exercise to learn if the lowering CPL was due to change in consumer behavior or because of lower rates.  We measured the total Gross Impressions of our schedules and compared them to the same month last year and learned that in ‘08 we required twice as many gross impressions to deliver the same number of leads compared to ‘07. The conclusion is that consumer behavior may have improved slightly, but the main driver for declining CPL was lower rates.

Clearance in December was strong, resulting from excess inventory at the station and national cable levels. Direct Response continues to be one of the fastest growing advertising categories during this time. This is a great time to be purchasing media, especially remnant media.

In January and into February we are seeing that regional stations are continuing to be far more aggressive in rate negotiation compared to National Cable networks, making it a great time to be local markets if you want to target your media dollars.

Network Broadcast and syndication are continuing to hold their rates. They continue to benefit from upfront dollars placed in May ‘08 with ironclad contracts.

Overall this was a disappointment election for television; good news for advertisers, clearance levels were much higher and rates lower than projected.

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.

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)

Magazines

Magazines are universally appealing with 85% of US adults 18+ reading magazines. (Source: MRI, Fall Study 2007) Most consumer magazines are generally targeted to niche markets with the largest categories including Entertainment and Celebrity, Clothing and Accessories, as well as Home Furnishings and Management. These niche categories allow advertisers to reach the specific demographic, psychographic, and ethnographic groups who are most likely to purchase their products or services.

Magazines are generally kept for a length of time and you will often see responses long after a new issue has come out. Lead times to get into magazines can be long with the average monthly publication requiring space 2–3 months in advance of the publishing date.

Magazine publishers have invested a significant amount of resources to broaden their appeal. In first quarter 2008 magazine websites reached 70.7 Million of unique visitors – a growth of 12% from 2007. (Source: Nielsen Online analysis of 345 magazine brands online) From 2004 to March 2008 the number of consumer magazine websites increased by over 53%. (Source: Oxbridge Communications, 2008)

Newspapers

Newspapers are targeted to the general consumer with intensive coverage of local and national events and news. Major daily newspapers reach on average 48% of adults each weekday and 54% on Sundays. Most US Adults 45+ read the daily newspaper with even higher readership on Sundays. In general newspaper readers have a higher education level and income level. (Source: Scarborough Research, 2007 Release2 – Top 50 Report)

Despite headlines of newspaper layoffs and cutbacks over the past several years, newspaper readership is rising. (Source: Pew Research Center’s Project for Excellence in Journalism: “The Changing Newsroom”) Newspapers are refocusing on local interests and news stories. This allows their advertising departments to devote more resources to local advertisers and create a unique feel to their publication.

Newspapers have devoted resources to increase their websites. As a result newspaper websites drew over 66.3 Million Unique Viewers on average in the second quarter 2008 – 40.2% of all Internet Users. This is an increase of over 12% from 2007. (Source: Nielsen Online Custom Analysis) Newspaper websites are often in the top 5 websites in each market.

Lead times for daily newspapers can be as little as 2 days allowing advertisers to cater their messages and react quickly to market changes. Weekly publication deadlines are generally about one week to ten days in advance. There are only a few national newspapers (USA Today, Wall Street Journal, and The Sunday New York Times). Therefore, newspaper ads must be bought on a market-by-market basis to efficiently reach consumers.

Summary

Print has faced and will continue to face significant challenges as digital media (e.g. internet, cellular data services, and other new technology) becomes more popular. Newspaper and magazines both have seen recent increases in their circulation and readership numbers as digital and online subscriptions are added. Despite challenges over the past several years, print is evolving, albeit slowly, to take advantage of these digital sources to attract younger consumers and to keep their existing customer base. Print remains a strong link to our lives and our communities. This connection is the primary reason to continue to consider print advertising as a strong part of the media mix.

Print Association Links

Magazine Publishers of America - www.magazine.org
Newspaper Association of America - www.naa.org

Many of our clients and prospects have told us that they feel left out of the process when dealing with large DR agencies. Some agencies effectively tell the clients, “just give us the budget and we will figure out the spends.” In effect, the client feels like they are being run through a mill in which they have little input into any elements of the process.

At Golden Media, we believe the most effective approach to Direct Response is to treat it as a marketing project instead of a simple media-buying exercise.

Case in point:

A client markets a training program for pediatric weight control and is unhappy with their current media-buyer. They are not getting the service or the planning they feel they deserve. The client wants to further test the program in similar markets but with different price points.

Golden Media looked at these basic elements:

• Target demographics
• Percentages of child obesity by state
• Parental ability to pay for the product
• The likelihood that a specific population will purchase the product.

We determined the likelihood based on several factors:

• Education levels
• Household income
• Weather
• Ethnicity
• Overall health/fitness rankings by city
• Social data

Then we looked at multiple psychographic factors including under the general headings of values, opinions, and lifestyles.

We factored in all of the elements to create the power score. We were able to show why the test had a greater chance for success, for example, in Pennsylvania than it did in Illinois. Another example was the state of Alaska, which has a high rate of childhood obesity and high HH income. But when we factored in the other elements, we found that it was not the most efficient test market.

The client’s comment: “You have put way more thought into this than our last media-buyer or anyone else we have talked to.”

With DR we want to increase the MER (media efficiency ratio) by carefully targeting the key prospects based on a several factors:

• Demographics
• Pyschographics
• Social data
• Qualitative research
• Geographic influences

After doing the research, we identify key advertising opportunities.

But the process continues with client collaboration. The “DR Mill” approach generally ignores client input or client awareness of certain market conditions.

Golden Media believes that it is important for the client to feel some involvement in how the advertising budget is deployed. So we work to gain consensus on the media plan. Our approach is to present the most intelligent plan but be flexible and sensitive to the needs, opinions, and values of the client.

It is a process that assures the client does not feel that theirs is just another budget that is being processed through a DR Mill.

1. Inattention to the schedule. Many media buyers are happy to create a schedule, place it, wait for the invoice, and consider the job done. This hands-off approach means the buyer is naïve to changing market conditions. Is the creative working? Is the level of response acceptable? Has the client’s competitive situation changed in any way? How many spots are pre-empted? Why is the clearance low? If these questions are going unanswered until the post mortem, it’s too late!

At Golden Media we believe the schedule is fluid and must be tracked and adjusted as necessary on a daily basis to ensure optimum results.

2. Paying too much. Bumped inventory comes with the territory and shrewd buyers can tell simply by the number of spots being bumped whether they are getting the best spot rate or paying too much. It is advantageous to have some bumped inventory because that reveals that you’re paying the low end of the negotiation scale. But it’s all about percentage. Expectations of clearance levels vary by client and should be considered with rate negotiation.

At Golden Media we monitor clearance on a daily basis and react quickly to reschedule bumped spots.

3. Relying too much on research. Placing media spends based only on numbers ignore important factors such as the attitudes, opinions, and values of your target audience. For instance, a 35 year old woman who watches MTV is of a very different psychographic than a 35 year old woman who watches CMT.

At Golden Media we strategically consider the demographics and psychographics of your target market to match them to your brand.

4. Not doing enough research. Many agencies rely on ratings information provided to them by the sellers. Let’s face it, media companies share the information that puts their brand in the best light. Sometimes the information is either inaccurate or spun in such a way as to be inexact.

At Golden Media we purchase television ratings and research such as Nielsen™ and reliable qualitative research. This maximizes response levels for our clients.

5. Not getting the best value. Some media outlets are over-priced based on a perceived demand, while others are of superior value. The trick is in understanding the difference. This comes with experience.

Golden Media’s decades in the media business has taught us to recognize the best value proposition.

6. Adversarial relationships. Media-buyers can be demanding and difficult simply because they can. While that approach may win the skirmish, it does not serve the needs of the client, nor does it represent them well in the long term.

Golden Media promotes positive relationships with all of our vendors and media outlets. Time and again, this good will translates into very real return for our clients in the form of added value, bonuses, and better rates. We also visit the national media in New York three times a year to solidify and maintain our quality relationships.

Against this backdrop of growth, we’re launching our new web site, and this blog in which we hope to share our thoughts pertaining to the ad buying business and the media industry at large. We invite you to read, comment…and be a part of the discussion!

In the meantime, if you are attending the Response Expo 2008 in San Diego, please look for us in booth #310!