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Direct Response Marketing

Field Reports

1 May, 2008 By: Thomas Haire, Jacqueline Renfrow Response


 

DR Spending Outdistances General Ad Market Growth

 

TNS Media Intelligence says DR's 17-percent jump helps overall market avoid a slide.

NEW YORK — While the U.S. advertising market finished 2007 with measured spending of about $149 billion, a miniscule rise from 2006 — according to data released by TNS Media Intelligence's Broadcast Verification Services (BVS), a provider of strategic advertising and marketing information, and a research partner of Response Magazine — the direct response category boasted the largest growth of any measured category. Overall, direct response spending rose 17 percent to more than $7.8 billion in 2007.

"Direct response experienced the largest gain among the top advertising categories, with a 17-percent increase in 2007," says Richard Radzik, vice president, BVS. "This growth is particularly remarkable, as the overall U.S. advertising market grew a tepid 0.2 percent for in 2007. Direct response's healthy growth was fueled by significant spending in the 'Household, Furniture and Appliances,' 'Drug and Toiletry,' and 'Crafts and Hobbies' industries. Looking at advertising spending across the different media, TV continues to attract the lion's share of DR spending, with 49-percent growth between 2005 and 2007."

The short-form DRTV market (TNS does not measure the long-form market) grew a stunning 37 percent alone from 2006 to 2007 for Response's breakdown of TNS' 4Q 2007 results) and finished just short of $4.5 billion. Direct response in print, online and on the radio combined for the remaining $3.3 billion measured — with DR print in magazines accounting for nearly $2.6 billion of that total.


Internet display advertising ranked second behind direct response in percentage growth, increasing almost 16 percent in 2007 to more than $11.3 billion, according to TNS' data. Next were consumer magazines, which showed a 7-percent gain to $24.4 billion, followed closely by cable TV, which was up 6.5 percent (due to a surge in the second half) and finished at nearly $15.6 billion. Finishing fifth was outdoor advertising, up about 5 percent to a touch more than $4 billion.

"The [overall] ad market remains stalled and is being engulfed by the spreading pessimism about general economic conditions," says Jon Swallen, senior vice president of research at TNS Media Intelligence. "Fourth-quarter performance was indicative of this malaise and early figures from 2008 suggest the growth rate for measured ad spending has not appreciably changed."

Swallen attributes the low growth rate to concerns about consumer spending and corporate profits. However, he says he's still hopeful that there will be a boost in ad sales around the elections and Olympics. The top 10 advertisers of 2007 spent a combined total of nearly $18.7 billion in measured media, down 0.3 percent from 2006. However, the largest advertiser of the year, Procter & Gamble, was up 5.6 percent and spent $3.5 billion.

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