It's a Buyer's Market Out There1 Oct, 2009 By: Nicole Urso Reed Response
There are reasons to complain about the sluggish economy, but media rates aren't one of them. In this round of Response's semiannual "Media Buying & Planning Guide," direct response buyers in every medium are happily humming the same tune: there isn't as much excess inventory as some would expect, but rates are generally low. And, despite the grim retail market, higher-priced DR products are still topping the Infomercial Monitoring Service's (IMS) charts.
According to the IMS national cable rankings in June, the Nos. 1 and 2 infomercials respectively in the health-and-fitness category were Beachbody's Slim in Six and P90X fitness programs. Each sold for roughly $100. The InStyler, Tre Milano's $120 hair-straightening tool, ranked No. 1 in the beauty category.
Nutrisystem D was the No. 1 cable spot in the health-and-fitness category, with a price of $299.95. The Bowflex TreadClimber, an $1,800 home fitness machine, ranked No. 3 in the same category.
"A great product will do well in any economy," says Rob Medved, president and CEO of Burlington, Wis.-based Cannella Response Television and a member of the Response Editorial Advisory Board (EAB).
He's the first to admit that it's a "need" and not a "want" economy right now, but high perceived value still sinks a hook in consumers. Cannella's work and success with the Beachbody campaigns are a testament to this.
"Home gyms are still selling. Power 90 is thriving, and the price point still skews higher," says Medved.
More DR Buying Power
The first half of 2009 was stronger than many would have predicted, but expectations were grim at the onset. The retail industry was riddled with bankruptcy and store closures; local and national ad space diminished as established newspaper and magazine publishers went out of business; and audience fragmentation continued to shatter with emerging Web-to-TV technologies.
As ad budgets dried up, DRTV media buyers reaped the benefits of cheaper rates and available inventory on network and cable. Medved found discounts of up to 30 percent for long- and short-form placements.
David Savage, executive vice president of Portland, Ore.-based R2C Group and a member of the Response EAB, says that long-form rates were down modestly but there were "terrific deals" in short-form local broadcast as well as national network and cable buys.
Regarding the first half of 2009, Savage says, "A lot of networks and cable stations didn't get the rates that they wanted, so agencies held out and waited for them to go lower. A lot of agencies held their ground in the first half and the rates came down."
Daytime spots are still competitive as DR advertisers try to reach recently unemployed audiences with popular products around education, home improvement, mortgage lending and debt relief. However, if buyers are willing to take a risk and hold out for a cheaper rate, they're often able to find a deal.
"The biggest difference this year is that there's so many last-minute, week-to-week buys," says Savage. "People keep holding out for better rates."