Election Stalemate Tough on DRTV IndustryFor the past two weeks the country has been on edge waiting for a final say on the presidential election. While the nation's voters were eagerly waiting for completion, no one prayed for finality more than direct response television companies, whose long-form infomercials have been forced to compete with the all-day news channels covering the back-and-forth.
The long-form DRTV industry thrives on late night/early morning consumers who surf the television stations because of lack of loyalty to any particular program. "We live on people who are bored and looking for something to watch between 2 a.m. and 6 a.m.," said Rob Medved, executive vice president and media director at Cannella Response Television, Burlington, WI. "People are staying up later to watch the election, but they are not surfing the airways."
Medved speculated that the long-form infomercial industry has been experiencing a 25 percent decrease in sales and costs per order since the election, but he did not specify what his firm is experiencing. He added that while long-form is being negatively affected, short-form commercials are seeing positive results, because short-form infomercials can fill time slots during commercial breaks on 24-hour news stations, such as CNBC and MSNBC.
"This incident can be compared to the O.J. (Simpson) trial," said Sam Catanese, publisher/CEO of Infomercial Monitoring Service, Philadelphia, an infomercial tracking firm. "When the O.J. trial was on, it really hurt the industry, because people wanted to watch the trial rather than watching some slicer-dicer infomercial." He speculated that the DRTV industry is losing 20 percent of its audience because of the election coverage.
"We think, by and large, DRTV is pretty much media-proof. The only exception before the election was the Gulf War, because people were so interested in seeing a war happen live, they stayed on the news channels," said Randal West, creative director at Hawthorne Media, Fairfield, IA.
He added that if this indecision in the election continued, consumers would realize a decision was not imminent and would gradually lose interest. Hawthorne's business has not been negatively affected by the election, he said.
"Our short-form sales have gone up about 20 percent, because we are concentrating a large part of short-form placement on the news channels, such as MSNBC and CNBC," said Mark Ratner, senior vice president of client services and marketing at Hawthorne.
To compensate for decreased long-form sales, select television stations have been decreasing rates over the past few weeks.
"On the average, TV stations are reducing long-form placement rates about 40 percent across the board," said Joyce van Ravenswaay, executive vice president and general manager at Direct Response Media, Wayne, PA.
"Stations know that we are with them for the long haul and understand that viewership is not there now but want us to stay with them for the future," she added.
Van Ravenswaay said many of the stations on which her company places ads are offering bonus buys to compensate for the loss in sales. She said local stations have been most flexible, but she would not specify names.