2013 DRTV Media Outlook
– American Market
By Rebecca Barr, Vice President, U.S. Media
If you are reading this that means the Mayans were wrong. And if you were counting on their doomsday prediction coming true to avoid 2013 planning, fear not. We have you covered!
As we transition into a brand new year and begin another journey around the sun, we carry forward some of the DRTV media challenges of 2012. Economic uncertainty and marketplace fragmentation are at the top of the list and, while we do say goodbye to the election cycle and Olympics, there are new challenges facing advertisers as we peel another page off of the calendar.
We anticipated that 2012 would be a wild ride and it certainly did not disappoint. Beyond the Olympics and election, the economic roller coaster that we boarded in 2008 continued to dip and turn wildly.
The economy is still projected to be front and center as the new year dawns with fuel being added to the fire as we start the year figuring out the exact financial impact of the eleventh hour fiscal cliff deal. Add to that reverberations from the financial crisis in Europe which will continue to influence our economy and you can see that no matter how much you scream like a little kid, the roller coaster will not stop to let you off any time soon.
The uncertainty of the economy has been a bit of a double-edged sword in the marketplace. While DRTV rates have been somewhat favorable and inventory available for DR advertisers, response has been weak. We saw this first as the talk of increasing the debt ceiling surfaced in the summer of 2011. Without knowing exactly how they would be affected, people proceeded very cautiously with their discretionary income and sales on non-essential items. Donations to nonprofit organizations also suffered. Not all of the news on the economy is bad though; the year brought more advertisers with products that tend to thrive in these conditions such as financial services benefitting the masses (e.g., payday loans, pre-paid debit cards), which has brought solid growth even in a down economy.
2013 is an off-cycle election year so we will not be seeing anywhere near the level of political advertising we saw in 2012 with the general election. The year isn’t completely clean though; there are several bigmarket mayoral elections (Los Angeles, Boston, Detroit and New York, among others), as well as gubernatorial elections in both Virginia and New Jersey. What this means for you is that there will be several spot markets which will be impacted by political advertising (higher rates, less inventory and no bonus weight in the election window), particularly New York due to a mayoral race and the New Jersey gubernatorial elections (both on November 5th) and Washington, D.C. which will be impacted by the Virginia gubernatorial race.
Reading the Tea Leaves: Keep Your Eye on the Upfront
As I write, it is still far too early to have a feel for the way the upfront will fall for 2013-14. If the economy continues to strengthen, we will likely see sizable upfront commitments which will make for a tight, competitive scatter market translating to a tighter DRTV marketplace. If we experience further hiccups in the economy in the coming months, that could influence the upfront in the opposite manner meaning that there will be much more scatter inventory but that market could tighten very quickly if several brand advertisers decide to jump back in. The best advice for navigating either situation is to stay plugged in and on top of the market trends. While this may seem like a no-brainer, falling asleep at the switch, even for a few weeks, may mean that your competitors will get a jump on taking advantage of the ebbs and flows of the marketplace and you will play catch-up as we close out 2013.
Trends on the Rise in 2013
There are many trends evident in the marketplace as we transition into 2013 but two that are here to stay are Second Screen Viewing and Cord Fraying.
Second Screen Viewing
Second screen viewing while watching television is now the rule, not the exception. Consider the
- More than 80% of smartphone and tablet owners use these devices while watching TV.
- At least 25% of U.S. smartphone and tablet users use the devices while watching TV multiple times per day.
- 51% of those who post on social media while watching TV do so to connect with others who might also be watching the same thing.
- 24% of Facebook users report posting about the movie they’re watching (in the theater!).
Broadcasters and advertisers have feared that viewers were being lost with the advent of this trend but in Nielsen’s State of the Media: Advertising & Audiences (April, 2012), they found that quite the opposite is true: “‘second screen viewing’ appears to augment the TV viewing experience rather than steal away viewers.” This practice will only continue to grow in 2013 and the good news is the best way to guard against this is to integrate second screen into your marketing program.
The economic downturn has led some consumers to Cut the Cord on their paid TV services out of necessity. While this does mean fewer television households and a definite impact on ratings and response, these people will likely return as the economy improves. More troubling for advertisers and media buyers is the growing trend of Cord Fraying, the practice of downgrading paid TV subscriptions. This practice was initially triggered by the economic downturn but has spread like wildfire because people are increasingly technologically savvy and are consuming content on the go.
The TV viewing population is aging and, while technological proficiency is reaching people of older ages, baby boomers will predominantly always be TV watchers. Your access to younger, more coveted segments of the population is not lost but you must be more adept at reaching them – and an 800 number on a TV spot alone will no longer suffice (and it hasn’t for the better part of the last 10 years, but if you didn’t know that you may need extra assistance), you must reach beyond TV to supplement your campaign.
This is a growing trend but fear not – you can come back out of your survival shelter! We survived DVRs. We can survive this.
Stay on Your Toes
Don’t let any of the previous information scare you. These are exciting times! And as DR marketers, you have all made your living on optimization and continual course correction so this is nothing new. To borrow a line from Clint Eastwood, we need to “Improvise! Adapt! Overcome!” The changing landscape will require you to be on your toes and to continually refine your focus. Integration and proper attribution of response and revenue is key. It’s time to throw out the Mayan calendar anyway.
1 11 Big Tech Trends You'll See in 2013, Mashable.com, Lance Ulanoff, December 06, 2012