Great Expectations: Direct-Response TV Won't Have A Dickens Of A Time In '04
A recent report by New York-based E&M Advertising predicts that advertisers will end up spending between 8 percent and 10 percent more on direct-response TV in 2004. That's tied to the strong TV upfront, increased confidence in the advertising marketplace, and a willingness to spend more in 2004 than marketers did in 2003. Michael Medico, president of E&M Advertising, said that the direct-response industry seems to be bullish about the future, with a stronger economy and higher levels of consumer confidence.
There will be fairly tight inventory, which will lead to single-digit increases in rates, the report said. Clearances will be affected by a stronger advertising market and less scatter inventory available to direct-response advertisers. Other factors will affect inventory and rates as well: Summer Olympics coverage on NBC, primary season beginning in January and running through the November general elections, and whatever happens with the 2004-05 upfront.
"The upfront will put some pressure on the rates," Medico said.
Strong categories include pharmaceuticals, bolstered by over-the-counter product introductions; health/fitness, health care, banking/financial, and travel services. The report predicted that more brick-and-mortar retailers will also be using the direct-response TV channel.
E&M and others say 2004 will also see an increase in the combined power of DRTV and the Web.
"We will continue to see significant gains in the number of respondents who go to the Web to place orders as opposed to toll-free phone orders," the report said. "This is true for all demographic groups, but it appears to be prevalent among the younger age groups."
Paul Soltoff, chief executive officer of Florida-based SendTech, agrees.
"With the whole integration of Internet and DRTV, it's being reinvented," Soltoff said. He said that half of DRTV's consumers are online when they're watching DRTV, which leads to opportunities for consumers and for marketers.
Soltoff thinks that it's because generally speaking, when given an option, people prefer to order online and avoid dealing with a telephone operator.