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Short-Form DRTV

3Q 2010 Short-Form Media Billings Drop 10 Percent

1 Feb, 2011 By: Jackie Jones Response

All five media distributions post big losses, while top 40 spending declines about $53 million.

Marking a ninth-consecutive quarter of decline, third-quarter 2010 short-form DRTV media billings fell $107.9 million — a 10-percent drop when measured against 3Q 2009 results. Data from Kantar Media shows short-form DRTV media spending again falling short of the $1 billion mark, reaching $974,804,300.

Drug and Toiletry Cleans Up

Only six of the 17 measured vertical categories reported gains in 3Q 2010. The “Drug and Toiletry” category was the leading dollar gainer, with a significant jump of nearly $5.5 million (1.5 percent) when compared to 3Q 2009. The top percentage gainers during 3Q 2010 were “Correspondence Schools” and “Publishers and Book Clubs,” which notched 26.3 percent (about $1.7 million) and 13 percent (nearly $4.4 million), respectively.

Among the losers, “Computers, Software and Home Office” suffered the biggest dollar loss — a steep $43.6 million when compared to the third quarter of the previous year and a 55.8-percent drop. The “Multiple Category Ad” sector claimed the biggest percentage loss by far, dropping 91.2 percent (losing just about $6 million) when compared to third-quarter 2009.

Dismal Declines for All Distribution Outlets

In a disappointing turn for 2010, all five media distribution outlets posted big losses in the third quarter, with network TV claiming both the top dollar and percentage declines. Network TV suffered a loss of $32 million, a 55.9-percent drop from 3Q 2009. Cable TV was close behind in dollar losses, with a decline of $31.5 million (4 percent), followed by Hispanic network TV with a $19.1 million drop (13.9 percent). Spot TV suffered a loss of $17 million (a 34-percent decline), and syndication also took a hit of $8 million, dropping 14.3-percent when compared to 3Q 2009.

Market Confidence on the Rebound?

The number of total short-form DRTV campaigns aired increased by 61, a 4.8-percent jump from a year ago. This continues the trend of 2009 when the number of TV campaigns aired rebounded to near 3Q 2007 results, and could signify that confidence in the market is continuing to return. Lower media rates continued to help the average cost of a campaign based on the total decline, with 3Q 2010 average costs declining by $129,486, a 14.3-percent drop. The average cost of a campaign outside the top 40 also declined 15.9 percent, or $65,799.

The top 40 reflected 18 new campaigns compared to 3Q 2009 and 16 new campaigns compared to 2Q 2010. The No. 1 campaign was 1-800 Contacts, which spent $113 million and bumped the previous leader, Nutrisystem Inc. (with just more than $37 million in spending) to No. 3 on the list. Proactiv Solution claimed the No. 2 spot, spending nearly $37.2 million in the third quarter. The iRenew Bracelet ranked highest among the newcomers at No. 10, followed by Razor & Tie at No. 14 and Fushigi at No. 15.

Though the rise in the number of campaigns aired is cause for celebration, as is the turnover in the top-40 rankings — more new and different entrants into the marketplace is usually a good sign of a thaw — the losses shown by all five media distribution outlets remain a disturbing trend.

Certainly, depressed prices are a concern for media sellers, especially in an era when online and mobile spending is all the rage according to industry watchdogs. But as the economy rebounds and traditional branders return to the market, prices should also rebound. Should the number of new campaigns from hopeful marketers with new and better products remain on its upward trend at that time, a recovery for the short-form DRTV marketplace is likely to follow rapidly. ■

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