DRTV: Orchestrating a Deal
Congratulations! Your direct response television (DRTV) commercial has been produced, and you’re ready to go. The next step is to determine which media outlets will best serve your requirements while working within the DRTV parameters. Depending on whether you choose a long-form infomercial or a short-form 30- or 60-second spot (referred to in the business as 30s and 60s), your options will vary.
But first, let’s take a look at how the television medium is evolving these days, thus affecting the opportunities for advertisers.
Changes in the Broadcast Environment
Gone are the days when all we had were local ABC, CBS, NBC and an independent station in each city. Advertisers could just place a spot on four stations and achieve 100 percent market penetration. Today, with so many national cable stations available, an advertiser has more than 100 options. Opportunities constantly are changing. For example, this year we said goodbye to the WB and UPN networks, and hello to the CW and My TV networks.
Even the origin of the broadcast feed that comes into your home has changed over the years. The advent of cable, high definition and satellite TV changed the playing field once dominated by a handful of stations. Now, a viewer can watch the same football game his three neighbors are watching at their respective homes—and all of them can see four totally different commercials. This is great for the advertiser who can’t afford to purchase advertising on the football game broadcast on a national basis.
National cable advertising can be expensive, especially on large cable networks. A 60-second spot can cost well into the thousands on CNN, ESPN and other highly rated networks. Instead of reaching all 85 million cable households, advertisers can choose their spot to be seen in 12 million homes via Dish Network or 16 million homes through DIRECTV. Cable networks allow these satellite companies to offer 30- and 60-second spots during regular programming. With a smaller universe, rates are adjusted accordingly. And advertisers can test the market without having a million dollar budget.
Go Direct With Local Stations
The local affiliates remain a strong force for advertisers looking to reach customers in a specific city. Once dominating the industry, the local stations currently make up approximately 50 percent of the total viewing audience in each market. Advertisers can book up to a two-minute spot within programming of the local CBS, ABC, NBC, FOX, PAX, CW and My TV networks.
One big caveat: Because DRTV advertising can be preempted, many advertisers feel the loss of spots due to political advertising. Station management must give priority to political ads over direct response ads. This practice mainly affects local advertisers running on network affiliates. Flexibility is necessary, as the advertiser must look at other opportunities to bring in leads or sales. It’s not advisable to depend on only one station for a direct response campaign because your ad may be preempted for a political ad.
Media Placement Considerations
Keep these 10 characteristics of the broadcast TV environment in mind when planning your media schedule:
1. Inventory of short-form spots, the 30s and 60s, normally is sold on a rotating basis, which means the spot can air during a time period like 10 a.m. to 3 p.m. Stations also will accept two-minute spots, but they remain highly likely to be preempted, as two minutes can eat up the entire program break.
2. Daytime advertising remains popular for lead generation for medical practices, mortgage companies and other businesses with a 9 a.m. to 5 p.m. sales staff. Many DRTV advertisers recognize shift workers and take advantage of the extremely low rates for overnight spots. The mainstream large advertisers look for shows with large ratings and will overlook the overnight time period, thus creating more inventory for the station.
3. Most stations will supply prelog times to the advertiser several days in advance of the spot airing. The specific time allows the telemarketing staff to be prepared for the influx of calls. Depending on the offer on the commercial and the size of the audience of the station, an advertiser can generate 100 calls each time the commercial airs. However, without the proper staff, the calls can go unanswered, and the client will not benefit from the increased exposure. Experienced marketers realize this and will use a telemarketing company that can handle a large surge of calls. For smaller advertisers, it’s necessary to space the spots out and use several smaller stations to supply a steady stream of calls throughout the day.
4. Local stations also offer half-hour infomercial time for clients. Many advertisers feel the need for an entire show to promote their business. These longer shows normally are done when the product price is high or the advertiser needs the extra time to fully demonstrate the product or service. The infomercial air times normally are available late at night or when households using television, or HUT, levels are low (the term refers to the actual number of homes with TV sets turned on). For example, more people watch television on a Sunday evening than they do on a Sunday morning. Instead of offering traditional programming during low HUT levels, stations will use this time for infomercials.
5. Many of the national cable networks will run infomercials from 3 a.m. to 6 a.m. The time periods are offered to agencies on a 13-week basis, and the bidding process is the same as local buys; the highest bidder receives the time slot. A half-hour time period on the major national cable networks can run from as little as $1,500 for overnights to more than $20,000 for weekends.
6. Some advertisers choose low rates and high frequency, and don’t mind airing in the middle of a cluster of overnight infomercials. Stations will have “bump rates” in which the advertiser can make an offer to the station. If the station does not get a higher bid, the client will air at the lower rate. The advertiser is not necessarily concerned with airing the ad at a specific time or during a specific show.
7. However, the lead-in (the show that is on prior to the infomercial) is an important ingredient for the success of an infomercial. A show such as “Face the Nation” has more value to a precise demographic and is priced accordingly.
8. DRTV offers several advantages over standard television advertising. The most apparent reason is that it inspires customers to pick up the phone, or go to a Web site and buy quickly. The return on investment is immediately visible. Thus, adjustments can be made to the media budget or schedule based on the performance of the current schedule.
9. DRTV also offers considerable cost savings compared to retail or brand advertising. The cost of running DRTV advertising campaigns is normally less than half the cost of airtime for traditional commercials. They can run for less because the stations have the flexibility to run the spots over several hours. But the advertiser must be amenable to different time slots and willing to run both 30s and 60s to accommodate the inventory of the station.
10. Advertisers should consider Hispanic stations, since they also accept DRTV advertising. In some markets, like Miami, the Hispanic stations outperform the English-language stations.
So how much can you expect to pay for airtime? According to Ken Kolb, vice president of direct response advertising for DIRECTV, the “marketplace sets prices. … Things could clear at $100 or not clear at $5,000.” This is true with all direct response TV advertising, as it can be preempted at any time. The business climate constantly is changing and demand for airtime varies on a monthly, weekly and even daily basis. Kolb recommends that advertisers be flexible and take advantage of last-minute deals.
Keep in mind that television and cable stations must air something at all times. A radio station simply can play another song if it’s not sold out, and a newspaper just won’t print an additional page for unsold inventory. But TV stations and cable networks are anxious to fill their excess inventory immediately and are receptive to all offers. The savings really can add up as a $1,000 infomercial time period can go for $300 if the station needs to sell it right away. A knowledgeable media buyer will have access to prevailing inventory and can offer the discounts to the advertiser. Obviously, the tape has to be at the station and approved to take advantage of the deals. This is the case for national and local-level advertising.
Don’t Be Afraid to Wheel and Deal
There are more media buying opportunities today than ever before. A buyer needs to have the experience, knowledge and passion for the industry to assist customers in their ventures. With the right experience and dedication, direct response media buying is a very effective medium for cost-cutting endeavors.
George Streapy is founder of Crystal Clear Concepts, an advertising and media buying agency in Orlando, Fla. He can be reached at (407) 898-9995 or email@example.com.