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Research

4Q Short-Form DRTV Media Billings Surge 46.5 Percent

1 May, 2008 By: Shay Moftakhar Response

Record number of campaigns reported as every category records increases for the first time.


The short-form DRTV numbers for fourth-quarter 2007 from TNS Media Intelligence (TNSMI) contain quite a few pleasant surprises for industry watchers. Total short-form DRTV media billings increased for the 12th consecutive quarter as buyers spent more than $1.2 billion — $1,249,674,000 to be exact.

 Figure 1
Figure 1

This is a 46.5-percent surge of nearly $400 million over 4Q 2006 results, setting a new all-time spending high. Total spending for the year capped at $4,478,474,800 — a stunning 37-percent increase over 2006 results. In fact, cable TV's short-form DRTV billings in 2007 alone — $3.27 billion — equaled the total short-form DRTV market of a year ago.

 Figure 2
Figure 2

 

Set the Record Straight

 

The 4Q 2007 short-form results represent the first time in Response's media billings research history that all categories reported increases over the previous year's quarter. This may be the strongest testament yet to the increasing popularity and importance of the DRTV medium as the logical advertising alternative in light of all recession variables.

 Figure 3
Figure 3

This "royal flush" of increases was led by the "Household, Furniture and Appliances" category, which led dollar-gainers with a $95.9 million raise — a 111-percent catapult. It was followed closely by the "Drug and Toiletry" category's $90.2 million advance (36 percent). The "General" category earned an additional $48.9 million when compared to 4Q 2006 results.

 Figure 4
Figure 4

Percentage-wise, the "Automotive and Travel" category took the lead with a 1,273-percent gain of nearly $12.7 million. "Business" pulled itself out of the doldrums, and reported a ten-fold increase — an extra $39.9 million spent. "Apparel" got dressed up with a $12.7 million addition of 643 percent. Even "Collectibles and Art" painted a brighter picture with an additional $1.25 million leading to a 302-percent increase masterpiece.

 Figure 5
Figure 5

 

Enter the Cable, Exit the Network

 

Cable TV continued its steamroll through 2007, tacking on another huge increase — 74.5 percent or $391.5 million — in the fourth quarter, bringing its 2007 total to $3.27 billion — nearly $1.15 billion higher than 2006. It also increased its market share by 12 percentage points to 73.4 from 4Q 2006.

Hispanic Network TV earned a very distant second, gaining 29.4 percent from an additional $37.4 million in spending. Syndication claimed another 29.7 percent from an additional $17.6 million, while spot TV gained just less than $9.5 million for a 19.8-percent rise.

 Figure 6
Figure 6

Like the previous two quarters, only network TV reported a drop. Network TV's losses continued to snowball, this time with a severe 63.4-percent slide of $59.3 million, as opposed to the $2.8 million and $18.6 million losses of the second and third quarters respectively.

 

1,289 Is a Winner

 

The total number of unique short-form DRTV campaigns aired during 4Q 2007 rose by 95 (8 percent) for a new all-time record of 1,289 — the highest in any reported quarter since 2004.

The average cost of a campaign based on the total increased by a more than a quarter-million dollars — a hefty 35.7-percent. The average cost of a campaign outside the top 40 rose by 56 percent — $142,028. A year ago, in 4Q 2006, this number rose just 1.9-percent or $4,608.

 Figure 7
Figure 7

The real question here is how much of the results are inflationary and how much are about frequency. Naturally, if a campaign is experiencing success, the frequency of its airings will increase accordingly, hence more money will be spent per campaign as opposed to attributing it to rising costs.

 Figure 8
Figure 8

The top 40 campaigns accounted for 60.5-percent of total spending ($755.9 million) — a leap of $195.2 million over 4Q 2006. The top 10 campaigns totaled $367.6 million — a 27-percent increase. The amount a marketer needed to spend on a campaign to be a part of the top 40 rose $3.7 million compared to 4Q 2006. Rosetta Stone finally claimed the No. 1 spot after its debut in the second quarter and its climb to No. 4 in Q3.


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