Response Magazine's 13th Annual State of the Industry Report1 Sep, 2008 By: Thomas Haire Response
How do you believe the industry will do post-Olympics and post-election?
Eden: We have had not major issues during the Olympics with either our long-form or short-form advertising. The upcoming presidential campaign is still a wild card. We are projecting that the impact will have a demographic slant (18-34) in addition to a more local, state-by-state focus. For the first time, we see national cable as a particularly strong vehicle for election advertising.
Fays: Part of the strategy for national sales to increase volume in this year's upfront was to protect against a softening marketplace after the Olympics and election. At MTVN, we have the DR inventory carved out already for our clients but other networks that wait for the scraps to fall off the table will be greatly affected.
Garnett: This will be a productive end of the year for media. I'm expecting we'll see a glut of inventory from the post-event drop-off — and because of the economic challenges causing advertisers to reduce their media buys.
Hawthorne: Our industry has remained relatively strong through the current economic downturn. And after the dip during the Olympics and elections, I see growing revenues because of an expected overall uplift in the economy in early 2009.
Lee: The economy is absolutely having a small effect on the industry — but the winners will be the marketing companies that understand the consumer and take the time to keep touching the customer. It is all about relationship marketing.
Medico: It is a typical cycle that we go through every four years, and it will be no different. Perhaps the soft economy may help in the late fourth quarter and in first-quarter 2009, opening up avails and lowering remnant rates.
Orsmond: The Olympics are covered relatively few U.K. TV channels, and, while the British are keen followers of selected sports like soccer, cricket, tennis and rugby, they are not as passionate about many of the events covered. We do not expect to see a major dip in overall viewing figures. The main concern in the U.K. after the Beijing games is how does London follow the $44 billion China spectacle with its own more modestly budgeted $18 billion event in 2012.
Sarnow: In spite of a recession, our industry will do very well in the later part of the fourth-quarter 2008 and first-quarter 2009. After that, depending on how the economy goes, the DR industry could have a rougher than normal second quarter, which is normally rough anyway.
Savage: Despite the challenges that the economy may face in 2009, I'm pretty bullish on the DR industry's outlook, because our industry is always positioned to take advantage of any challenges in the general ad market. I believe that shrewd and forward-thinking marketers, whether they are selling products or services, generating leads or driving retail, will look at DR media and see the efficiencies that the medium offers.
Stacey: The industry will do fine post-Olympics and post-election. The more important impact may be from the economy overall. In slow times, TV viewing levels and sales can increase as people may go out less. However, fewer shoppers in the stores can cause reduced retail traffic and sales.
How will the government regulation to change TV to all digital broadcasting in February 2009 affect the DRTV business?
Eden: The major change will be in the quality of the video transmission, causing producers and clients to upgrade commercials. The major impact is cost of entry to market. Lead generation — particularly service-oriented companies — may be the most impacted as some of these information requests are for necessities, such as health insurance or credit cards, that often target lower or lower-middle income households that may not be currently digital. The government plan to offer subsidies for converter boxes to lower-income households may relieve some of this pressure, but it will be an evolution.
Garnett: Fundamentally, the "advertising" will be the same. But, all of the providers in the business will be confronted with the challenge of determining their own paths to full high-definition (HD) production. I expect most will evolve to HD production as it becomes more efficient for their businesses to become all HD.