Media Buying & Planning Guide: Bigger, Faster, Stronger1 May, 2013 By: Nicole Urso Response
The DRTV media business looks better than ever and boasts a fresh face for 2013.
The comeback story of direct response sales post-Great Recession has been a running theme in Response’s May issue “Media Buying & Planning Guide” for the past four years. Business trends in 2008 were grisly, and no one was convinced that sales would bounce back or if opt-outs would continue into 2009 and beyond, but they knew the importance of direct response marketing methods and the necessity of hard data at a time when few new advertisers would risk campaign dollars in such a sour economy.
As short-form sales began to pick up momentum, long-form struggled to keep pace. Then in last year’s buying guide, there was a sense of relief, that 2012 could be the fresh start that everyone wanted.
“The direct response market finished out 2012 incredibly strong with great momentum going into 2013,” says Shirin Peykar, vice president, direct response, at Univision Communications. “DRTV has been reaping the benefits of the recent bullish economic landscape. In 2012, Univision responded to the demand from its advertising partners and built the first-ever dedicated direct response team in Hispanic media. Since then, Univision’s newly-formed team has seen gains year-over-year and the trend has continued well into 2013.”
New Year, New You
The new year started with strong competition, stable pricing and much more attention on future innovation than past economic woes.
“On the short-form side, sales were excellent, starting in 4Q right into 1Q,” says Maria Kennedy, senior vice president, direct response and paid programming at Discovery Communications, and a member of the Response Advisory Board. “Inventory has been tight across all networks since the second week of the quarter. The general sales side is experiencing a great scatter market that is taking a good portion of the 1Q inventory. In 2Q, inventory is also tight with a strong general scatter market, so DR advertisers need to get their deals in early for their ‘must-buy’ networks.”
According to Response media billings research, short- and long-form delivered healthy results in 2012. The total number of short-form campaigns that aired in 4Q decreased 6.9 percent, but rising spending among the largest campaigns helped drive an 11.1-percent jump in over all spending per campaign. This helped 4Q short-form numbers jump $35.5 million over 2011 totals, and overall short-form DRTVspending to rise 4.1 percent for the year (see page 16).
“There was a softness in the [short-form] market that started with the Summer Olympics and that continued for us through the aftermath of Hurricane Sandy,” says Peter Graseck, senior vice president, advertising sales at Viacom Media Networks. “That actually had an effect on the marketplace, I feel. After that, fortunately, the political advertising dollars helped balance the marketplace and really set the stage for a strong first quarter. Since then, we’ve only seen increased demand for our channels.”
Newcomers to the top 40 list of short-form DRTV campaigns in 4Q 2012 also added encouragement, with 24 new brands in the top slots.
Not to be outdone again by short-form’s performance, long-form media billings in 4Q 2012 helped that half of the DRTV market achieve its first annual rise since 2006. The total number of long-form time slots purchased for the year dropped 1.9 percent, but the average cost of a half-hour block rose 5.6 percent, allowing the long-form market to post a 3.6-percent rise in 2012.
“In long-form, demand started to get strong at the end of 3Q, and went right into fourth quarter,” says Kennedy. “Rates were high and advertisers were looking for more inventory. We had not seen this kind of demand for years in the long-form marketplace. In 1Q, the marketplace corrected itself and is back to average.”
Beauty & the Brands
Brand advertisers in pharmaceuticals, financial and health-and-beauty have been popular across many networks.
“Regarding short-form, direct sales have definitely rebounded in first-quarter 2013, especially if you compare today to the second half of 2012, which was not as strong,” says Jason Baron, senior vice president, direct response at Turner Broadcasting. “Today’s market is robust.”
Baron says that the pharmaceuticals and travel categories have performed especially well, and Turner’s entertainment division is consistently the strongest for DR sales.
The long-form marketplace is also experiencing the momentum from the end of 2012 sustained in 2013 with strong investments from brand advertisers as well as new entrants.
Kevin Lyons, president of Opportunity Media Inc., and member of the Response Advisory Board, oversees long-form media across A+E Television Networks, and points to the bulk of long-form DR business coming from core advertisers who have been in place for a while, but says that newcomers just discovering direct response are starting to round out the mix.
“I think one category that is very strong and will see some activity is the beauty category,” says Lyons. “It’s been very strong for us, especially for the Lifetime networks. I would definitely expect to see some activity in the future with more companies entering that space.”
Peggy Gobel, vice president and cable media director at Cannella Response Television in Burlington, Wis., reports the same trends.
“In fourth quarter, we had a lot of brand advertisers come into the space, including Humana and United Healthcare,” says Gobel. “That really kept the demand for time up, which kept the rates up in fourth quarter.”
Gobel experienced strong demand and rates going into 1Q 2013 as well, with even more brand advertisers entering the market.
“We really saw the beauty products vertical exploding a little bit,” says Gobel. “Eight out of the top 25 shows right now are beauty shows. Usually, you see a lot more fitness in this space.”
At Discovery, Kennedy calls out Investigation Discovery (ID) as its “best network for DR” with top categories including insurance, diet aids and programs, pharmaceuticals, health-and-beauty, financial and household cleaning brands.
“ID has the longest length of tune in all of television, so clients know their spots are being watched,” says Kennedy.
There are some other up-and-coming Discovery networks building a strong client roster as well. “We have three networks that have dramatically increased their advertiser bases in the past year: Destination America, Velocity, and OWN,” she says. “OWN has experienced 12 months of straight audience growth and is now garnering strong African-American viewership.”
The two-year-old Oprah Winfrey Network drew serious attention, and about 4.2 million viewers, when she interviewed Lance Armstrong in January about doping and being stripped of his Tour de France titles in Part One of her worldwide exclusive.
Producing compelling content is the most obvious and challenging way to build viewership and revenue. Despite the economy, emerging technology, and other factors that impact sales, Graseck believes that content is still king.
“For broadcasters, it’s extremely important that we continue to invest in the content that our audiences want in a way that provides it to them whenever, wherever they want it, which is why we’re all over these other platforms,” he says. “I think that if we program directly to our audiences, then they’re going to continue to come to our networks.”
In recent years, popular shows, such as Jersey Shore and 16 and Pregnant have boosted short-form sales in a dismal economy. But rather than hope for hit-driven success, Viacom Networks has built up a portfolio of annual must-see TV.
“Whenever we have big tent-pole events on our networks, like MTV’s Movie Awards, or the VMAs, or a Comedy Roast, or Spike’s Guys Choice, VH1’s Divas, or CMT’s Music Awards, there’s pressure on our inventory because these events on the general side eat up so much inventory,” says Graseck. “They’re great for us on the cash side of the business and for our networks overall, but they put pressure on the inventory that we have, which is a good thing because that affects rates for us in a positive way.”
Univision is also investing in multi-platform content and more programming.
“Univision continues to feature stellar programming from Televisa, the Hollywood of Latin America, and marquee programs like ‘Nuestra Belleza Latina,’” says Peykar. “This year will also focus on sports as we are broadcasting the FIFA Confederations Cup and the CONCACAF Champions League, soccer tournaments that have continually delivered.”
Nielsen announced in March that it will begin to measure Internet-only TV households and Internet-connected TVs by September. Although it is a small percentage of viewership, and won’t include measurement of viewing on mobile devices, it is indicative of a growing trend and represents a younger demographic.
“Although it’s a small percentage of viewership, with networks like MTV and Comedy Central in our wheelhouse — whose millennial viewers are younger, tech-savvy trendsetters — we’re always looking at how they’re consuming media and making sure that we’re there with them,” says Graseck. “We have an extensive amount of programming and full-length episodes that are available for streaming on our networks’ sites. We also have VOD for Comedy Central, Spike, TV Land, MTV, VH1 and CMT, and we have mobile apps for many of our networks and their shows, including The Daily Show and The Colbert Report. All of them have advertising opportunities that we can offer, so we’re there.”
Viacom Networks also is heavily investing in social television.
“We have our own co-viewing network apps, and then we’re also working with a company called Zeebox,” says Graseck. “It’s a second-screen app (available on iPad, iPhone, Android smartphones and on the Web). It’s great because not only does it act as a TV viewing guide, but it also provides viewers with additional content, and it gives us the opportunity to interact with our viewers.”
Univision also created a multi-screen viewing experience with its UVideos.
“Digital video is a personal experience,” says Peykar. “It’s your choice to pick what and when you watch, and through what means. But it’s also an interactive one. Users can directly engage with fans and find exclusive content. With this in mind, we launched UVideos, our bilingual digital video network that houses thousands of hours of on-demand TV shows including the latest full episodes of current and classic Univision shows, as well as popular short-form content.”
With so much quality entertainment now accessible online, there is a growing concern about “cord-cutting,” the act of canceling cable and using Internet-connected devices to stream TV, movies and sports events.
According to Nielsen, 5 million people in the U.S. have elected to go “Zero TV,” double the amount since 2007, but they do stream content on their computers, tablets and smartphones.
“The future of consumption will be multi-modal,” says Peykar. “People will still watch linear TV, whether broadcast or cable, but they will also consume VOD, mobile, online and social video content at an increasing rate. At Univision, we are working on delivering our linear content across all digital platforms, on-demand and through live streaming. But we are not stopping there. We have built an incubator for original made-for-Web, short-form content designed specifically for digital distribution. We are partnering with a variety of digital distributors, brands and content partners to create this content and super-serve Hispanics regardless of language and age. We see a future benefit to our viewers and our advertisers.”
According to Forrester, 85 percent of U.S. tablet owners use them while watching TV. In some cases, the tablets are treated as a second TV for watching online videos in the kitchen or bedroom.
“The overall message that we’re taking from this is added television viewing, so we see it as a great opportunity,” says Lyons. “However, there are measurement challenges and the industry has to come to terms with that. Once standards are set and adopted, we’ll have a new way of monetizing those additional screens.”
Kennedy believes content providers need to put more content online now, while also creating advertising opportunities around it. Discovery’s Revison3 is a Web-based content provider that has the hosts of the program pitching advertisers’ products and services and allowing for integration and product demonstration.
“Video streaming might change the experience in the future, but currently there is no substitute for the TV experience,” says Kennedy. “Younger consumers watch TV via the Web or other mobile devices. However, when they get a little older and have families, they are going back to traditional television. TV is still the main driver for brand awareness and consumer purchase.” ■