Nets' Flat Sales Please MarketersDirect response TV marketers are re-evaluating their media plans in light of flat sales during the recently concluded network upfront advertising sales market.
About $6 billion has been sold in advance sales of network television advertising time for the 1998-99 season, roughly the same amount as last year. That the market is flat to down indicates increased competition from cable television channels and the continued erosion of broadcast audiences.
Network executives blame sluggish demand on a lack of blockbuster events, such as the Olympics or a presidential election, for the lackluster upfront market. But the possibility of an increased supply of network ad time is tantalizing to many direct response executives.
"It's obviously very exciting for us, because the less pre-sold means a greater need to generate revenue from direct response spot and infomercial time," said Mark Ratner, director of business development at Hawthorne Direct, a DRTV agency in Fairfield, IA. "We would expect to see the effects of this in the fourth quarter. Right now, the overwhelming thing that's occurring is that rates are dropping and fire sales starting to show up." The second quarter is usually a slow time for the DRTV industry as people spend more time outdoors.
While Ratner is enthusiastic about the possibility of increased media avails in the usually tight fourth quarter, other DRTV marketers are more cautious in their outlook.
"Anytime there's an increase or excess of supply of broadcast time is beneficial to direct response marketers," said Eytan Urbas, a spokesman for Guthy-Renker Corp., a DRTV marketing company in Palm Desert, CA. "However, at this time, it may be premature to say that this signals a major change in the climate for direct TV sales."
The flat advance market in broadcast time may well open availabilities and opportunities for placement on network affiliate stations, said Rick Sangerman, senior vice president of A. Eicoff & Co., a direct response subsidiary of Ogilvy & Mather in Chicago.
"But still, I must emphasize, that simply because there is more inventory doesn't mean the stations will lower their standards," he said. "Networks still want and demand good quality products and good quality creative."
While the upfront market may portend a loosening of media availability early next year, it may not directly impact media plans for the second half of this year, said Rick Petry, vice president of media at TV Tyee, a DRTV production company in Portland, OR.
"Everything we've seen indicates that the current marketplace is very, very tight," he said. "My sense right now is that TV is hot, even the local affiliate stations are hot. And while the networks may have some national availability, the reality is that the time they're offering may not fit into media plans."
However, Michael Feldman, vice president at marketing at The Media Group, a DRTV marketer in Stamford, CT, said he is finding "plenty of media availability" and is now looking forward to determining whether additional opportunities will open due to the softening network TV market.
"This is a situation that we certainly will be watching closely as we head into the back part of the year," agrees Anand Khubani, president of wholesale operations of Telebrands Inc., a DRTV marketer in Fairfield, NJ. "Media in general is increasingly hard to find and to buy at attractive rates, so certainly, any time there's an opportunity, especially in the second half of the year, to buy more time, could turn a strong selling season into a phenomenal season."
As direct-response TV segues into using television as a vehicle to drive a brand at the retail level, companies may not feel as pressured to jump at every broadcast availability, said Larry Nussbaum, president of Media Brands Llc., a DRTV marketer in New York.
"We're moving into an era where the current format, "As Seen on TV," is giving way to a time where TV is used to create brand image, much like a Procter & Gamble uses ads to sell detergent," he said. "I don't know that I feel compelled to jump in and buy more time just because it's available. It will have to fit in with our strategy to move our brands forward."