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Direct Response Marketing

Media Buyers Get the Squeeze

7 May, 2010 By: Nicole Urso Reed Response

“When we look at the past couple quarters, DR has been extremely healthy,” says Lyons. “General ad sales have been healthy as well, but I think DR is actually a little more robust in a time when we thought general ad sales were going to be down.”

The popular next-best-fashion-designer competition “Project Runway” on the company’s Lifetime Network brought in a different audience and consumed a lot of programming time, which closed out hours that would have been opened up to DR advertisers. “That caused us to displace that inventory to other programming and that caused everything to be a little tight,” says Lyons. “Most of the advertisers that bought ‘Project Runway’ are integrated within the show and they have a lot of exclusivity, so we didn’t have a lot of flexibility with other advertisers in those programs.”

Lifetime Movie Network’s (LMN) true-story movies also kept ratings in check and prices steady. “Pregnancy Pact,” inspired by news events in 2008, was one of the top-rated movies that LMN has ever done, according to Lyons.

Season one of “Drop Dead Diva,” a new comedic drama series on Lifetime, also brought in a sizeable audience, which impacted DR pricing and inventory.

“We saw small cancellations but they’ve basically been what they were historically,” says Lyons. “I think the regular marketplace being pretty robust, people who already bought in didn’t want to cancel and buy back in the scatter marketplace where they’re paying premiums. So people held inventory where they could.”

Long-Form Billings Stay Down

Long-form media billings dropped to a new five-year low in third-quarter 2009, according to Response’s media billings research. Spending declined $21.1 million to $243,883,300, an 8-percent drop. Comparatively, that’s just $33 million more than 3Q 2004’s $210.9 million. And though the numbers showed a decent bounce back in 4Q 2009 (Response, April), there are still questions about the long-term health of the long-form market.

Cross MediaWorks’ CEO Marc Krigsman and COO Larry Rubin contend that the selling environment didn’t improve much in fourth-quarter 2009 and first-quarter 2010. Cross MediaWorks is a full-service agency managing media buys on long- and short-form broadcast, satellite and cable inventory as well as online and video on demand. The company also provides creative and buying services for Hispanic media.

Krigsman was formerly the president and COO of The Networks Group, a division of Turner Media Group. Rubin is also a Turner alumnus, the former executive vice president of business affairs. Together, they bring more than 40 years of media experience to their new venture and an outward appreciation for direct response, media measurement and hybrid advertising.

“One of the problems that long form has had is that there are very few new good shows out there,” says Krigsman. “What we’re finding is that the shows that are performing the best are the tried-and-true programs that have worked and that have redone their creative to create a new kind of appeal, or are coming up with product extensions. There really isn’t, on the long-form side, that great new show that really affects long form in a big way.”

According to Jordan Whitney’s Top 10 Infomercial Ranking in first-quarter 2010, familiar brands like Beachbody’s P90X program and Hearthware’s NuWave Oven secured top placement.

Fays notes that at MTVN, long-form sales have taken a hit, but the educational category is doing well as many unemployed or under-educated consumers look for ways to expand their skill sets and find new job opportunities. Technical schools, such as UTI and ITT Technical Institute have been successful, as well as products like Rosetta Stone, a popular language-learning software program.

“In the first quarter, long form seems to be showing signs of coming out of the doldrums,” says Fays. “There’s confidence that long form is picking up.”

Buying Forecast

Media buyers should begin to think about new ways of securing reduced rates and optimizing their returns. On the short-form side, prices already started to increase for general and DR advertisers, but there are other factors squeezing inventory and driving up demand aside from the revitalized economy.

In January, a U.S. Supreme Court decision partially upended restrictions on corporate donations and financing of national political campaigns. This decision could result in a flood of advertisements as the midterm congressional election season approaches, and could dramatically reduce inventory on spot advertising.

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