A Seat at the Table1 May, 2009 By: Thomas Haire Response
Broadcast, satellite and cable network ad sales leaders Stephen Appel, Michael Finn and Jeff Lucas discuss the growing role and influence of direct response on their overall businesses.
"Direct response has moved from being an afterthought to becoming a weapon that sales management can wield," says Jeff Lucas, New York-based executive vice president of advertising sales for MTV Networks' Entertainment group.
Lucas is not alone — though he was an early believer among general ad sales leaders across the TV network spectrum. As direct response advertising has become more commonplace — especially among those larger companies that have traditionally used brand advertising tactics — executives in the broadcast, cable and satellite businesses have been pushed to re-think where DRTV fits in their plans.
Now, with the country in economic turmoil and marketers slashing budgets, network sales executives find themselves turning more and more to DR marketers to fill the void. Stephen Appel, president of sales and marketing for ION Media Networks in New York, says, "With the weakness of general recently, DR is becoming even more powerful."
The numbers bear out DR's growing power, especially in the spot market. Since 2004, Response has been publishing short-form DRTV media billings research provided by TNS Media Intelligence (TNSMI). Final 2008 results show the short-form direct response media market topping the $4.5 billion mark — a 77-percent increase since 2004.
During the same time period, the long-form DRTV market actually peaked in 2006, notching more than $1.27 billion in billings according to Response in-house research. However, though the long-form market has lost about 8 percent (closing 2008 with $1.17 billion in total billings) during the past two years, it remains up nearly 30 percent over 2004 results.
These trends figure to continue, especially on the short-form landscape. In recent months, Response has heard from some network DR sales leaders that DR media time was even expected to make up half of total ad income in the troubled fourth quarter of 2008. "With recent marketplace and economic developments, there are many more outlets available to DR as reduced general market demand has opened up opportunities like broadcast prime and other high profile inventory," contends Michael Finn, vice president of media sales for Dish Network in Englewood, Colo.
This trio of executives — Appel, Finn and Lucas — agreed to address the growing importance of direct response advertising to networks' bottom lines for this special cover feature. They've also agreed to take part in a special session scheduled for 9:30 a.m. on Wednesday, May 20 at Response Expo in San Diego, where they will address an expanded set of topics, including just how crucial direct response is becoming to the future of television.