A number of recent trends have emerged that affect the ability of the direct-response industry to measure the impact of television and the Internet on client sales.
Pure direct selling through television has become increasingly difficult because of several factors. Media fragmentation continues as audiences shrink, but an entire new category of TV advertisers – the dot-com phenomenon – is absorbing inventory that would have cleared for direct response.
The influx of dot-com advertisers puts pressure on the available short-form inventory, driving rates up and making direct payouts more difficult. The slimmer margins in direct television sales cause advertisers to look beyond over-the-air sales and at the entire impact of a DR campaign, particularly in retail channels.
A relationship between rating points and retail sales would seem logical, but the underpinnings of DRTV media that allow lower rates than what general advertisers pay – including run of schedule and immediate pre-emptibility – conspire to make audience delivery analysis extremely difficult. In the world of infomercials, audience levels are often so small that they cannot be reported or measured by the networks and stations that run them.
Advertisers seeking a hybrid of direct TV sales and retail sales may begin to gravitate toward paying general rates to ensure positioning and audience delivery so they can evaluate the cause and effect between target-rating points and impact at retail. This trend is evolving in the online environment. With companies scooping up all the nifty domain names, such as squatters, there are not enough to go around. The opportunity to slap a unique and memorable domain name on each media, placement, instead of a toll-free number to evaluate the effectiveness of the primary media, becomes a challenge.
Much like a direct mail model that looks at total pieces mailed vs. response, Internet advertisers who use television to drive viewers to sites should examine the relationship between audience levels, hits and, in the case of plying wares direct to consumers, sales.
Flaws With Nielsen Ratings
Of course, such analysis relies on the seemingly omnipresent Nielsen TV ratings system, which uses about 5,000 viewer diaries and people meters to project the viewing habits of more than 256 million domestic TV watchers.
The continued fracturing of the TV audience and proliferation of program choices has intensified industry doubt about whether Nielsen is statistically sound, to the point that several major media and advertising players are exploring the creation of an alternative. Yet Nielsen can’t be entirely dismissed. It is, after all, the basis for most of the buying decisions that are made in placing $48 billion worth of TV media each year. But it should not be the only yardstick used to evaluate whether or not we are doing our jobs.
To further complicate the picture, VCRs and set-top boxes give consumers the ability to avoid commercials altogether. The paradigm is shifting from media served to consumers – whether they like or not – to an environment where consumers choose to receive information. This begs for creative advertising and media approaches so such consumers can be aware of their options.
Speaking of splintered landscapes, the Internet continues to grow exponentially, but to what end? Advertisers have become increasingly disenchanted with online media’s smoke and mirrors, and inflated CPMs as they struggle to derive benefits from the medium. What is the real impact of a click-through rate if it doesn’t lead to some specific consumer action? Will the Internet’s endless horizon of real estate for sale become a landscape of per-inquiry advertising?
It is also evident that Web advertisers cannot rely solely on their slower-than-molasses downloading banner ads and “wham, Spam, thank you, ma’am” e-mails to exclusively attract online consumers. A combination of television’s mass appeal combined with the niche-targeting ability of the online environment may be the potent combination.
And what of this so-called convergence? Will the TV and computer meld into one conduit of infinite entertainment and information, or will the channels remain separate? As online bandwidth allows more sophisticated graphics, including streaming film and video images, what new formats might emerge for advertisers, and how will we inspire viewers to check them out? What will the new standards for measurement be, and how will those translate into meaningful results for our advertisers?
Amid this entire swirl, the advertising industry can no longer afford to throw media against the wall and see what sticks. We need to develop new models that demonstrate a true cause and effect between the marketing campaigns we execute on behalf of our clients and the bottom line. A convergence of sorts needs to happen in the media world – between traditional and direct camps – so that all of the tools at our disposal can be used to ensure client success.
