Electronic Retailer - April 2011 - 48

WHY IS IT TOUGHER TO MAKE DRTV PAY?

models and filters to determine where we attribute a web lead, and we’re constantly looking for ways to perfect and refine the methodology,” says Barnes. “I don’t think there is a perfect solution out there. Some are just less wrong than others.” Looking a few years down the road, agencies see even bigger changes in store. “You want to talk about a huge trend that nobody can get their hands on?” asks Wechsler. “What happens when television as we know it no longer exists?” Video-on-demand is in its infancy today, Wechsler says, but “sooner than we can imagine, television is going to become video, and you’ll watch it on computers and cell phones, and you’ll watch a program whenever you want to… People under 30 already have totally different media-consumption habits than people who are older. That will change our business dramatically.” Medved suggests that the prospect of a massive shift to on-demand viewing is especially worrisome for long-form

DRTV. “Nobody seeks out infomercials,” he says. “People happen upon them while channel surfing. If future generations go to a menu screen and choose their content instead of surfing through channels, that becomes a real challenge.”

The Near Term
What of the more immediate future? After declining throughout 2009 and for most of 2010, long-form rates have stabilized, says Medved. One factor keeping infomercial rates from falling further is declining inventory, he says. Networks including Hallmark and Fuse have stopped selling late-night long-form slots altogether, at least temporarily. Wechsler agrees with Yallen that shortform time is overpriced. Both expect a correction eventually, but neither will predict when. The rate picture in short form is complicated by the fact that even a single general advertiser can have a major impact on the market. Think of it this way, Wechsler says: “If General Motors

gets healthy and buys $1 billion worth of advertising, then suddenly instead of paying $7 per thousand [viewers] for a 120-second spot, you might pay $12 per thousand.” In the first quarter of 2011 the market was strong, meaning that rates were relatively expensive, agencies say. Whether that will continue for the rest of the year depends largely on the bullishness of general advertisers, which depends in turn on the state of the economy. Some agencies say that by early 2011 the economic recovery was strong enough to encourage marketers to invest more in DRTV – and that the industry will see some new hit shows as a result. Barnes has a cautious eye on the recovery, but says he is “fairly optimistic” that some breakout shows will appear this year. Medved goes further, describing the DRTV product pipeline as “more robust” than it has been for the past two years. “If you look at lists of the Top 10 or Top 20 DRTV shows right now, you’ll see a lot that have been on there for the past 12 or 18 months,” Medved observes. “I think by this time next year we’ll see more new shows on those lists – because more hot new products are coming up. It all has to do with marketers throwing money into the marketplace.”

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electronicRETAILER | April 2011

3/23/11 6:14:26 PM

Electronic Retailer - April 2011

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