More Direct Direct-Response: Key To TV Ad Health In Good Times And Bad?

Count the number of times that direct-response (DR) business has been mentioned recently in discussions of possible ad-marketplace weakness as a piece of overall ad revenues for national and local TV companies. 

There have been a few. Does that matter? 

One of the more recent analyses is the decline in Nexstar Media Group's ad revenue for The CW -- a network it has a majority stake in.

Steven Cahall, media analyst of Wells Fargo Securities, said: “We think the DR/national ad market weakness may have contributed to The CW miss versus our numbers.”

Core advertising for the entire Nexstar Media Group -- for all its platforms including its big TV station group -- dipped a modest 2% to $391 million for the third-quarter period.

Before this, we had recent disclosure from Fox News Media -- home of Fox News Channel and Fox Business -- which also had some weakness in this area.



“[There is] ongoing softness in direct-response advertising at the company's Fox News business,” said Michael Morris, media analyst for Guggenheim Securities, earlier this year. 

At the time, Morris projected this will continue for the first six months of 2023.

At the fringes, we know that DR advertising can really help many mainstream TV networks and stations. For many networks this can be a “core” advertising segment for any company. Nothing wrong with that.

DR marketers typically buy commercials at TV stations, networks and now, streaming TV at lower pricing.

In turn, TV networks have flexibility to run those commercials wherever needed -- daytime, prime time, or overnight dayparts. Direct-response TV commercials typically also can be pre-empted -- thus the tradeoff when buying at low rates.

The positive, of course, for direct-response marketers is getting immediate consumer feedback through engagement with website and/or phone communication. All this may still work well alongside live, linear TV -- near real-time engagement being a strong point.

In more difficult times, TV sellers have counted on DR advertisers to shore up their ad-revenue efforts. Now, with the market turning around -- as it has been for some TV sellers currently -- should we expect some of these DR references to abate?

Streaming? Hulu, for one, has been a leader in direct-response advertising on CTV -- including the use of brands incorporating QR codes into advertising commercials. 

No matter what the state of the current marketplace, more need for quicker consumer response -- with whatever technology is around -- seems to be coming.

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