The DRTV Industry Is at a Crossroads

The DRTV Industry is at a Crossroads. But the Right Turn is Going to be a Bumpy Ride.  – Susan Rowe, June 14, 2013

As I peruse the DRTV industry chat rooms I actually have seen quite a few comments about the death of DRTV. We have always had pessimists in our midst, but these comments are not just from them. The entire spectrum of DRTV marketers is expressing true concern about an industry that many of us are very passionate about.

Concerns abound regarding the decline of call volume, most predominant amongst our 18-24 demographics. Even our 55+ demographic is not picking up the phone with the same frequency as ten years ago – especially if you factor in higher levels of income and education. Increased DVR penetration has made the practice of fast-forwarding through commercials more than just a prime time behavior, putting tremendous pressure on DRTV’s ability to perform. This and other issues are impacting our industry.

But before we start to look for another career, let’s dissect each of these issues to see if there is an upside. Lack of call volume is not a new subject. I’ve brought this up in a couple of previous articles – primarily as television viewers now have other options rather than picking up the phone. A recent study by the HomeWord Center reports that 77% of respondents say they actually use their computers, laptops or tablets while watching TV (this is +16% compared with 2012). My takeaway – the consumer is now going online to your website rather than calling. This phenomenon, which has escalated dramatically over the last 5 years, causes great angst in our industry. How are we to attribute web volume against DRTV spots in order to optimize, and how are we to carve out DRTV’s contribution to a client’s bottom line?

Rectifying the first issue is easy. Employing CoreDirect’s URL tracking methodology allows you to attribute web activity back to an individual spot. Then you can determine the efficacy of that spot and optimize with not only call volume but web leads as well. Relying solely on call volume is a losing battle – especially with the consumers’ embrace of the tablet and smartphone. The second issue is stickier – how to correctly attribute online performance back to offline media. You can use regression analysis to tease apart marketing activity and determine the ROI from each, but DRTV carries two unique characteristics that hinder the ability to plug the schedule into a regression model. One, we do not buy on ratings or thousands, we buy on results. Regression models tend to use audience as a key input. Second, we tend to run schedules continuously and evenly, while regression models rely on the inconsistency of advertising in order to gauge impact on sales. So I would advise anyone to tread carefully in the regression modeling space.

Some of our younger demographics, especially A18-34, now represent 28% of the Internet video audience and 52% of the mobile video audience (NSI, Q3, 2012). “Cord nevers” and “cord cutters” who consume their video online through Netflix and Hulu Plus are not being reached by our traditional DRTV methods. Our younger audience is leaving traditional  TV. As an industry we need to continue to push online video sellers for a DRTV rate card. The 55+ market, with high levels of income and education, is far more familiar with technology than we often give them credit for. When you take the top socioeconomic Prizm Clusters against this particular age segment and generate a cross-tab through MRI (MediaMark Research, Inc.), the results show that their online facility includes such sophisticated online activities as tracking investments, making personal or business travel plans, making a purchase for business or personal use, and watching online video. Given their facility with online, one can easily see how they turn to their tablets or laptops to check out a DRTV commercial.

DVR ownership and fast forwarding through commercials, according to TiVo data in 2008, was negligible in dayparts other than prime-time. Our DRTV dayparts were unaffected. Here is what TiVo is reporting for Jan-March of 2010-2012:

One-third of our commercials are now being time-shifted. That means we could experience a decrease in response as TiVo and other DVRs allow for fast-forwarding through the creative. A positive outcome of this trend is that now people can pause the commercial, check out the product or service online, purchase or do the requested action and then return without missing a single second of their programs. One hopes that  encourages or actually increases response.

Our business has always been about embracing change. We have always made sure we understood where our audiences were migrating, and looked for unique ways to get a consumer to respond to our messages. While there are significant challenges today, the DRTV of tomorrow will embrace the online space. Creating action – getting a consumer to respond – is the future of our industry, whether it’s from a unique 800 number on a cable network’s commercial, or a pre-roll on an online video.

 About Susan

Prior to embarking out on her own Susan Rowe held the position of Senior Partner, Managing Director within the Digital and Performance Marketing media practice for Ogilvy Neo in New York and Chicago (Feb 07 – July 08). Her charge was to oversee Performance Marketing for a number of high profile clients, including Allstate, Investools, TD Ameritrade, Select Comfort and Six Flags. She was also responsible for leading NeoVideo, the video unit that works with new forms of video on TV and online. She was selected to be part of a Google TV’s first panel primarily for her work in development of ground breaking research with Google TV on the effect of attentiveness on response.

Susan can be reached at:
Rowe Media

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