By: Barry Jacobs, Vice President, Short Form Direct Response, Mercury Media Santa Monica

I was reminded today of the years when I was selling local radio and TV. I would do my best to get a meeting with the owner of a business, only to be told that he would not give up his advertising in the newspaper, because his customers would actually have a copy of the ad in their hands when they walked into the store.

Well, times have changed and Mercury Media has developed a marketing plan that actually has the modern consumer still walking into the retail store, but instead of carrying a newspaper ad, they are carrying a coupon or offer they have downloaded from the internet.

Newspaper readership is at its all time low. Newspapers are going out of business and most newspapers have a web site that more and more people are turning to, instead of getting their fingers black from the newsprint. The average age of the reader is sixty plus and I am being generous and the average time spent with the paper is twenty minutes a day. They average family spends over four hours a day in front of the TV and two and a half hours in front of their computer.

If your target customer is under fifty and you have a business of any kind or your product is available in a retail environment. Mercury can deliver your customer carrying an ad or coupon, just like the old days.

Here’s an example:

The client is a leading retailer who provides quality, affordable children’s clothing nationally. The target is parents with children newborn to twelve years. The challenge was that the client was looking for a mass market medium which would deliver coupons efficiently and increase retail sales during the back to school season.

Mercury Media structured a two week test, utilizing DRTV buying disciplines. The target age group was women 25-44. Mercury Media consulted with the client using their existing commercial and adding a strong call to action urging the viewer to “act now” to obtain a coupon. A unique URL was also added as an additional response vehicle.

The test ran for two weeks and the results were off the charts. 20,000 leads as a direct result of the TV offer. Of the total leads generated, over 65% responded via the web. The two week test generated a cost per lead of $2.19 CPL. The $40,000 test generated over $700,000 in sales that was directly attributed to the coupon redemption.

If you want to grow your business…..Call Mercury Media

Barry Jacobs is Vice President of our West Coast short form direct response television business. Jacobs has been a leader within the direct response industry and prior to Mercury Media worked with leading agencies including Initiative Media’s, his own agency Camelot Media, and later partnered with E&M. Jacobs’ past clients have included direct response leaders such as Jenny Craig, Bosley Medical and Bally’s Fitness. He also served as an instructor of advertising at The University of California Los Angeles’ Anderson School of Business.

Contact him at bjacobs@mercurymedia.com  

By: Barry Jacobs, Vice President, Short Form Direct Response, Mercury Media Santa Monica

In the last two months, two prospective clients have told me that they would rather be a big fish in a small pond than a small fish in a large pond.  The “small pond” media company has used the same phrase with both the clients. As part of the “large pond” company, I take a huge exception to the comment.

First of all, at Mercury we grow clients.  Our goal is not simply to buy the media; we take the time and energy to optimize every facet of the clients marketing endeavors. Let me draw an example that really dispels the concept. If you buy a tropical fish and place it in a large tank, something wonderful occurs. The fish grows and flourishes as it has space to grow and the opportunity to live a long life. If you take the same fish and place it in a small bowl, the fish stays the same size and does not live as long.

This is really the crux of the difference. At Mercury, we give every client the opportunity to flourish. We have individual teams dedicated to the health and welfare of every client. Each client is treated as if they were in a small bowl, but given the size and resources, they can grow and prosper.

So, the next time someone says to you “Wouldn’t you rather be a big fish in a small pond?”  Say “No, I would rather be able to grow my business to become a much larger fish in a very big pond!”

Barry Jacobs is Vice President of our West Coast short form direct response television business. Jacobs has been a leader within the direct response industry and prior to Mercury Media worked with leading agencies including Initiative Media’s, his own agency Camelot Media, and later partnered with E&M. Jacobs’ past clients have included direct response leaders such as Jenny Craig, Bosley Medical and Bally’s Fitness. He also served as an instructor of advertising at The University of California Los Angeles’ Anderson School of Business.

Contact him at bjacobs@mercurymedia.com  

By: Beth Vendice, President, Mercury Media Performance Guarantee Group, Boston

We pride ourselves on “now.” At its most basic level, direct response TV is all about “now.” Make the call, visit the website, do it now.  All the creative, messaging, and placement is designed for “now.” To elicit an immediate response.

Which is not to say that “now” TV doesn’t have positive after effects. Branding is one of them. Retail sales are another.  Often, I am asked about the relationship between DRTV and retail sales lift.. It makes sense. Many of our most successful clients sell products or services that simply don’t have a retail component, such as ecommerce services. On the other hand, many clients have a retail product component and invariably the two go hand in hand. DRTV drives retail sales. It isn’t the science of “now”, but it is the science of DTRV’s afterburners.

We recommend a DRTV advertisers always consider a strategy, which supports sell to and sell thru at retail. The payoff is significant. It’s hard to assign a categorical number. Empirical data tells us sales at retail, driven by a good DRTV campaign, can be three to 10 times the direct sales on TV. Logistically, a direct response retail strategy can be designed for “now” and also for retail.  Both can increase the lifetime value of your direct customers.

In response to this increased awareness of DRTV and retail, we have developed three key strategies:

1. Creative: Go long! A 60 second DRTV creative, even without retail tags, will drive meaningful retail sell to and thru. Of course the media investment has to be meaningful as well. We’ve found the best strategy to drive direct and retail use longer format combined with shorter units – :30s or even :15s, to deliver strong frequency. This gives the campaign the chance to educate viewers about the product. By the way,  a DRTV creative for retail does not depend on retail tags. In fact, many times the retail tags will drive up media CPMs (should this be CPO or CPM?).

2. Media Strategy: A typical base line for adequate spend will be 50+ Targeted rating points, per week, for six to eight weeks.  There are three primary differences between straight DRTV campaigns and a hybrid that seeks to drive retail sales.

• The network selection and dayparts will be different.  A retail strategy will include media plan that executes  higher profile programming and dayparts with strong frequency.

• Flighting strategies are also different.  Traditional DRTV campaigns will air continuously from week to week and spend levels could fluctuate significantly based on CPA optimization and clearance.   A retail strategy has dual objectives:  optimize consistently but also achieve targeted impressions and TRP levels.  So flighting is set over a “two to three week on” and  “one to two weeks off”  pattern in order to deliver  strong frequency and build rapid awareness.

• Spend optimization: Because sales at retail are multiples of direct sales (3-10x) the tolerable CPA of a traditional (non retail) DRTV campaign will in general be lower than that of a retail strategy which needs compressed spends. Compressed spend on higher profile nets may drive up CPAs, but these are offset buy increased revenue delivered at retail.

3. Adjust the offer: In general, the retailer would prefer you not compete with  them by making the same offer on TV or a more attractive one. It’s easy to make an offer that is slightly different on TV via the sale of a premium, or a variation on the actual SKU. In general, all DR products that can impact retail have fans among retailers (not sure if this makes sense here?). A successful campaign can fast track shelf placement. Also: Consider adding key retail partners based on the market and size of buy-in.

It works. We’ve worked on several DRTV-Retail campaigns. Especially for the consumer packaged goods category, this hybrid model is efficient as a media buy and captures the afterburner effect of direct response.

As President of Performance Guarantee Group in Boston, Beth is responsible for leading the strategic direction and day-to-day operations.  Since joining Mercury in 2001, she has led the firm to significant year-over-year growth by attracting clients that include Mandalay Bay Resorts Group, Neutrogena, LifeLock, Liberty Medical, Boost Mobile, Conair, Vegas.com and many more well-known brands. Prior to joining Mercury, Beth held leadership positions at both AIG and Liberty Mutual and brings more than 20 years of leadership experience guiding teams to successfully help clients significantly and measurably grow their businesses.

Contact her at bvendice@mercurymedia.com

By: Michael Goodman, Strategic Analyst, Mercury Media

TV, Internet, smartphones, DVRs, on-demand. Today’s consumers have more viewing options than at any other time in history. While different segments of the population might prefer different devices to view on, or exhibit different viewing habits, the overall trend is clear; consumers are watching more video on TV, the Internet and mobile devices than at any other time.

But despite all the alternative viewing options available, plain old television continues to dominate viewing by a wide margin. According to Nielsen’s Q1 2011 Cross-Platform Report, persons 2+ watched an average of 35 hours and 37 minutes of television a week followed by using the internet on a PC (5:43 per week) and watching time shifted TV (2:25 per week) (see Exhibit 1). Segmenting television into quintiles shows the even the lowest quintile of TV viewers still averages an hour of TV viewing per day, while the highest quintile watches nearly ten hours a day. While some variation is seen among different demographic and ethnic groups the overarching theme remains constant – television dominates viewing.

Exhibit 1

Time Spent Viewing

Source: The Nielsen Company – The Cross-Platform Report, Q1, 2011

Factors contribution to the strength of television include the following:

• Programming. While individual channels may struggle to attract viewers (as seen by the decline of the broadcast networks), broadcast and cable networks overall are producing programming that consumers want to see. In particular, cable networks are now producing original programming whose quality rivals that once seen on only the broadcast networks.
• Windowing. We don’t often think of television as having release windows the way that movies do but in reality it does. To minimize cannibalization and protect their cash cows, programmers’ first air programs on their linear channels, then release them to secondary channels, such as cable video-on-demand, online, and mobile. As a society, we don’t handle delayed gratification well, so the bulk of a shows audience watches the initial airing with secondary channels providing incremental viewing opportunities.
• The television set. The TV is, and will continue to be, the dominate screen for video content as long as there is programming to support it. Sitting in the comfort of the living room, family room or bedroom watching a large screen TV easily trumps the experience of watching video on a PC or handheld device. Adding to this experience is the growth of high-definition TVs. According to Forrester Research, 71% of U.S. households will own a HDTV by 2014 and more than half of them will have two or more.

Television far surpasses other mediums for its ability to reach massive audiences, convey sight, sound and emotion, establish credibility, and build brands. Combined with direct response spots, television can provides marketers with significant value for their money.

Direct response TV spots are typically longer (60, 90 and 120 seconds) than traditional brand spots allowing marketers to more effectively promote the benefits of a product or service. They are frequently bought as remnant time or as run-of-schedule at steeply discounted prices, often 10% – 50% off the rate card. For the cost of a single 30 second spot in primetime, advertisers can get dozens of spots across a broad range of stations. Finally, DRTV spots are measureable, allowing marketers to gauge the effectiveness of their creative and media buys by tracking responses via the phone and web, and analyze inquiry and order conversion metrics to optimize their creative and media buys.

Until TV viewership stops increasing and hovering in the hundreds of hours viewed per month compared to broadband and mobile video consumption in the low single digits, it is reckless to proclaim that any great revolution is taking place and that marketers should be shifting their advertising dollars away from TV. Rather than cannibalize television viewing, consumers are using emerging video platforms to supplement existing viewing; turning broadband and mobile video into audience multipliers. As such, marketer should be experimenting with ways to add broadband and mobile video to the mix without cannibalizing their television ad spend and for marketers looking for greater accountability from TV advertising they can look to DRTV.

To learn more, download Mercury Media’s FREE whitepaper, The Power of Television.

Media Life’s “Media Economy Newsletter” 

Though buyers say cable negotiations have not yet begun, a number of networks seem poised for an equally strong showing as broadcast in terms of CPM gains, which should push this year’s total broadcast and upfront tally to a record total.

This year cable’s spending is expected to match broadcast, at around $9.2 billion.

Buyers say they were impressed with this year’s cable upfront presentations and have high expectations for the coming season, including the resumption of ratings gains after a recent flatlining.

“Cable has the potential to match broadcast this year in upfront dollars based on the new programming lineup, which includes much star power that is estimated to deliver decent rating points for cable,” says Cheryl Green, senior vice president and media director at Mercury Media.

Green notes that there have been an increasing number of advertisers testing out cable in recent years. She says that’s partly due to the fact that cable offers opportunities that broadcast cannot.

“With the sponsorship opportunities available on cable, many advertisers are moving dollars not only for CPM efficiency, but also for out-of-the-box offers with added-value components that are not as easily assessable in broadcast,” Green says.

As for which networks will fare best, analysts say TNT and TBS, coming off a very successful first part of the year based mostly on sports, stand to see higher CPM gains than most other networks.

USA, the longtime No. 1 network in primetime among total viewers, ESPN, which carries “Monday Night Football,” and smaller networks like Bravo and ABC Family, which both saw record ratings this year, are other networks buyers say are poised for strong upfronts.

“As expected, we think Turner will look to be the most aggressive in the upfront negotiations, hoping to book about 10 percent CPM increases, with the cable net industry broadly booking 6 percent to 9 percent increases,” says John Janedis, a senior analyst at UBS.

A slightly more optimistic view comes from a New York buyer, who tells the Media Economy Newsletter:

“The top five or six networks might get 10 to 12 percent increases, the bottom ones might be happy with 5 percent increases, and everyone else in the middle might get 7s, 8s and 9s.”

But while cable will likely have its best year ever, after seeing year-to-year gains in all but two of the past 20 years, buyers caution that there’s still a wide gap between the two media.

Cable’s cumulative audience, across more than 70 networks, does better broadcast’s draw, but in terms of reaching a mass audience broadcast remains the better choice.

While the Big Four broadcast networks are available in more than 114 million households, most top cable networks are available in 100 million or fewer. “Even lower-rated broadcast networks deliver a larger household reach than the top cable networks do, so I would not say we’ve reached the point yet” where there’s little differentiation between broadcast and cable, Green says.

As Sr. VP of Media for Mercury Media Boston, Cheryl leads a team of 20 direct response media professionals. With over 15 years of experience in direct response media, Cheryl prides herself on the strength of her long-standing relationships within the industry. She has an in-depth understanding of metric analysis via direct response marketing ensuring Mercury continues to provide savvy, effective and cost efficient media plans with high ROIs across various industries. Under her leadership, Mercury Media became the first agency to provide clients with Direct Response national cable sponsorships, create quarterly media package deals across numerous networks and provide clients with guaranteed media results against their marketing objectives.

Contact her at cgreen@mercurymedia.com

By: Marcelino Miyares, Jr., VP Mercury en español

(As printed in the May 2011 issue of Electronic Retailer Magazine)

I have been involved in marketing to Hispanics in some capacity for more than 30 years. That’s three census cycles, if you’re scoring at home. Most of my tenure has been spent in direct marketing, and every now and then I see a watershed moment that I expect will push marketing to Hispanics over the top. The release of the most recent 2010 Census results is one of those moments.  And still, as recently as last week I have spoken to marketers and agencies who still manage to hold on to outdated and unprofitable perceptions about the Hispanic market.

The 2010 Census results, released in mid-April, are mythbusters for Hispanic marketers. The market now tops 50 million and will account for 95 percent of the teen population growth over the next five years. Hispanics now outnumber blacks for the first time in most United States metropolitan cities.  Last year, Hispanics became the largest minority group in 191 metropolitan areas, as a result of the Latino population spreading to new areas of the country.  The Census Bureau also projects that by 2020 the Latino population will increase to over 65MM.

Despite all this, there are a mere $3 billion marketing dollars spent annually against $850 billion in Hispanic spending power. That’s less than one-third of one percent. The new census figures add a lot of fuel to the argument that this market is underspent and underestimated. Unfortunately for the disbelievers and marketing xenophobes who chose not to read this article, this is commercial reality, not myth. So I thought I’d take the opportunity to use the census results (or should I say facts) and some other recent research to counterpoint the stubborn myths that live on in our industry.

“I can reach them with my English-language campaigns.”

Maybe some. But you will not reach Hispanics in as relevant and as meaningful a fashion as you will in their own language.  In other words, you will not sell as much as you can.   Seventy five percent of Hispanics still speak Spanish.  Even English-speaking Latinos speak Spanish and watch Spanish-language TV.  In fact, as much as 65% of Univision’s Prime Time audience is unduplicated by any major general market broadcast or cable network.

Putting language aside, the census results show that you may waste a lot of money by perpetuating this myth. That’s because the Hispanic population is not only growing, it’s concentrating. They can be reached much more effectively via broadcast than the general market. Three quarters of all Hispanics live in eight states, each of which have more than 1 million Hispanic residents.  So if you’re not advertising in the Southwest, Florida, New York, Illinois and other states, yes, you could be overlooking a massive base of DRTV shoppers.  Not including Puerto Rico’s millions of in-language shoppers.

“I don’t need to reach Hispanics, because as a group they are impoverished.”

Almost one in four Hispanics lives in poverty. The census showed that the Hispanic population, like all population categories, took a hit with the recent recession. However, this is only a quarter of the picture.  Hispanic wealth is growing at other levels.  According to the US Census Bureau, 16.5% of Hispanics made over $100,000 a year in 2010 up from 12.5% in 2000.  And over 48% own their homes.

Hispanic spending power, according to recent research, continues to diversify. According to a recent Nielsen report, Hispanics spend more on categories for babies and children.  In fact, Hispanic households represent 11.8% of CPG total spending, but 16.6% of disposable diaper sales. They spend more in traditional mass merchandise stores, food and drug retailers and warehouse clubs.

Hispanics self-medicate, self-beautify, self-coach, and self-advise on nutrition.  That’s because they spend more of their income on their families and themselves.  They are an opportunity waiting for the right product with the right message.   Housewares, beauty products, toys, baby products and ingestibles are all paying huge opportunity costs if they are not investing in this segment right now.

“Spanish speakers only watch soap operas, Sabado Gigante and soccer.”

To rebut this notion I have to turn again to Nielsen, who reported in the wake of the census results that Hispanics, on average, watch more broadcast and satellite TV and display higher usage of mobile internet. And their viewing habits are changing as more programming options evolve.

Take a look at a news digest from just two weeks of activity, from April 3 to 17. NBCUniversal and Fox each unveiled new marketing initiatives aimed at Latino audiences, and Comcast’s intention to launch three minority-owned and operated cable channels over the next two years was confirmed by new parent NBCUniversal.  Fox announced the launch of Fox Hispanic Media. Nat Geo Mundo, an extension of National Geographic for the Latino market; FOX Deportes, a sports network; and the recently launched Utilísima, a women’s lifestyle network, will be sketched in greater detail at next month’s upfront gatherings for advertisers. NBCUniversal announced a marketing initiative called Hispanics@NBCU, and Comcast’s push to launch 10 Latino- and African-American-owned channels over eight years officially opened. I’m sure the companies involved have determined that there is a viable and competitive market for Hispanic viewers out there.

“Our cost per call in the contact center will go up if I add a Hispanic campaign.”

True, this is because Hispanic campaigns typically generate 50%-100% more calls on a CPT or CPK basis (calls-per-thousand spent). In other words, CPCs and CPLs tend to be much more efficient.  It is also true that your cost per sale will be higher with Latinos.  But this increase can also be viewed as marginal given the overall increased volume your campaign will register for having executed a Spanish-language campaign.

“I don’t have the budget to test.”

In my experience, opening a Hispanic market campaign requires a much lower investment to test creative and media placements than most clients think.  Adaptation of a successful show, call center set ups and media typically run less than $50k. Yet the yield on the Hispanic test is scalable to up to $250,000 per week.

Direct marketing for the Hispanic market means immediate response.  We have so few opportunities like this one come along in our current economy.  You no longer need to imagine a growing and targetable audience.  It is already here.  They are already shopping, but mostly waiting to be able to watch you on Spanish-language TV.

I hope the census results help bust another myth, too: the one that says marketing to Hispanics is too complicated.  The business of selling in another language is always complicated, but no marketing campaign is easy these days.  If you spend your last $10 on Hispanic marketing, chances are that it will earn you more than the first $10 you ever spent.  So stop hesitating and call the more than a handful of successful and reputable agencies that can make it less complicated for you to grow your business, your campaigns and your profits.

By: Kristi Tropp, VP, Director of Client Services, Mercury Media Boston

As marketers, we all aspire to hit home runs. We want to be part of “that campaign” that delivers immediate sales, shatters revenue projections, and maybe even wins a few awards. In the DRTV business, we certainly want those campaigns, and we want them regularly. The reality, however, is that few agencies are fortunate to get even one of those on a direct to consumer basis. But we do- because we pride ourselves more on DRTV campaigns that achieve success based on smart planning, sound media buying, real time data and analytics, compelling creative, and, just as importantly, a very strict vetting process! In short, we’re in it for the long term, regardless of whether success is immediate or a bit more hard-earned.

“Hard-earned” and “long-term” are not the sexiest words in the DRTV lexicon, but it struck me in a recent round of client meetings that we need to change that perception. In this business, we’re very good at promising,  measuring and delivering immediacy. Campaign hits on day one, sales hit in week one, increase in week two, and a campaign is optimized for successful responses in week three…… and everyone’s happy. We should aspire to more.  Four concepts are still missing from overall DRTV planning and goals that should be top of mind for every DRTV launch:

1. Generating awareness. DRTV has long lost the “cheap” connotation. Many DR creatives are on par with any traditional branding campaign and because of that, DRTV is an excellent and highly efficient platform for delivering awareness. Yes, DRTV is built for “order now,” i.e. immediate ROI, but done well it also builds and reinforces a lasting impression of value and service over time . And the prices our clients pay for DRTV, which can be 30 to 70 percent off network rate cards, make it an extremely efficient way to generate awareness.

2. Driving retail sales. What to do with that awareness? Drive retail. We recently worked with a client that launched a high-end skin care product. It smashed all sales expectations very quickly through immediate Direct to Consumer orders. Then the bonus kicked in. Awareness generated by the campaign was so high that consumers brought their demand to retailers, lifting in-store sales by as much as 200% within a three weeks. Double-dipping from DRTV success is an efficient way to break retail.

3. Loyalty: Combine awareness, DR sales, and retail sales, and you have an excellent entry into straight customer retention success or even longer term loyalty programs to deliver maximum lifetime value (LTV). Because DRTV generates so much data from active customers, and from prospects that raise their hand enough to register for a URL or email campaign, the foundation for loyalty and retention programs is easily built and executed.

4. Branding: When you come back to your new landscape of awareness, retail success and loyalty, you’ve achieved a branding platform. The next DRTV campaign will be a qualified success, so more aggressive imaging, messaging and sales outreach is started at a higher level. Combine this with the guaranteed in-flight ratings delivery (a Mercury Media exclusive), network clearance, and media optimization that DRTV provides, and you start to look at DRTV as a longer-term branding effort. In fact, it can be the basis for that branding effort, not just a component thereof.

My four DRTV priorities are not to suggest that you shouldn’t keep aiming for the grandstand- DRTV is a home run hitter. But it also plays a lot of positions and finishes the game very well. DRTV is the complete player. We just need to start looking at it that way.

Kristi is Vice President, Director of Client Service of Mercury Media Boston. Kristi brings motivated and tenacious leadership to the Mercury team and her tireless work ethic, attention to detail and commitment to quality ensure that each client’s goals are thoroughly exceeded. Kristi offers over 12 years of client management, marketing and strategic business development experience to Mercury’s clients. She managed client services in traditional media and creative agencies including Gyro Worldwide, Arnold and Hill Holliday.

Contact her at ktropp@mercurymedia.com

CableFAX’s 2011 Sweet 16

Sweetness…

Cable has more than come into its own in recent years, and advertisers are taking notice. So we’ve made a point lately to recognize people from brands and agencies supporting cable with ad buys, partnerships, brand integrations and other strategic alliances designed to get the right brand messages to the right audiences. Nowhere can you do that better than within cable’s niche universe. As this year’s upfront winds down, it’s especially important to understand that despite all the changes in how people consume video, TV brands still command considerable power. According to Nielsen, for example, 49% of social network and blog site visitors are also visiting individual TV network sites. At the same time, TV ad spend continues to trump all other media, with $69bln in buys. But mobile video viewing is up 41% over last year, and nearly 150mln people view online video every month. The execs listed below are the reps from brands and agencies that are key contacts, sounding boards and collaborators for cable as it continues to innovate into the next decade and beyond. This year, some of our Sweet 16 kindly imparted their wisdom on advertising, which you’ll find throughout this section. Enjoy!

Cheryl Green
SVP, Media Director
Mercury Media
Green must be doing something right. Why else would she be the only person in this year’s Sweet 16 to make the list 2 years in a row? The truth is that we keep hearing raves about Green’s continued passion for direct-response advertising, which she admits was once the ugly stepchild but has lately come into vogue as viewers demand more interactivity and advertisers demand more accountability. But she credits the cable industry for “the variety of out-of- the-box opportunities and overall flexibility cable networks offer.” Music to our readers’ ears…

CF: Best thing about cable?

CG:  I have found over the years that cable networks are far more open to new advertising ideas, sponsorships and packages and offer a variety of upfront and premium deals, as opposed to broadcasters. For example, Discovery Communications offers Mercury Media quarterly upfront and premium packages across all of its networks. In addition, Viacom offers DR upfront deals versus the broadcast networks, where in order to negotiate an upfront it needs to be on general advertising terms.

CF: Biggest challenge using cable to get out your message?

CG: The biggest challenge I have faced in executing a campaign using cable is the need to balance media schedules with various tiers of cable networks in order to provide the reach and frequency necessary for a successful campaign. The top tier cable networks’ rates have become very competitive to the broadcast networks; however, advertisers need these top-tier networks in order to provide campaigns with the necessary reach to become successful. In order to balance the high spot cost and CPMs, it is necessary to include a variety of mid- and low-tier cable networks to not only bring the overall CPM down on the schedule, but to also provide our campaigns with the frequency necessary to reach their overall goals.

CF: Future of ad deals?

CG: I have noticed that many network groups have begun requiring advertisers who are interested in sponsorships, upfronts, and packages to build a component of VOD into their campaigns in order to approve the deals.

CF: The biggest thing cable nets could do to better serve advertisers?

CG: The best thing cable networks could do is to stop competing with the broadcast networks. For example, in order to provide media opportunities to all agencies and clients, it would be beneficial to offer tier CPM deals versus competing with the broadcast networks for competitive CPM. In addition, as many cable networks offer B- and C-tier networks, they could continue to be out of the box by using some of this unrated inventory to bring down the overall spot costs for their network deals.

CF: Are the upfronts still useful or outdated?

CG: I think that upfronts are useful to those advertisers with very large budgets who have the demand for specific programming, networks that are difficult to obtain volume in through the scatter market.

CF: Mercury Media says that direct response is “in our DNA.” So tell us, what’s cable’s biggest missed opportunity when it comes to properly using DR?

CG: As an agency with numerous lines of businesses, it can be challenging working with the cable networks in customizing packages based on leveraging our agencies’ combined spend. For example, if we were to create an upfront deal across all our lines of business it would require various rate structures based on clients’ direct response goals. Although a challenge to create, this could become a new avenue for cable.

As Sr. VP of Media for Mercury Media Boston, Cheryl leads a team of 20 direct response media professionals. With over 15 years of experience in direct response media, Cheryl prides herself on the strength of her long-standing relationships within the industry. She has an in-depth understanding of metric analysis via direct response marketing ensuring Mercury continues to provide savvy, effective and cost efficient media plans with high ROIs across various industries. Under her leadership, Mercury Media became the first agency to provide clients with Direct Response national cable sponsorships, create quarterly media package deals across numerous networks and provide clients with guaranteed media results against their marketing objectives.

Contact her at cgreen@mercurymedia.com

By: Olga Ackad, VP, Director of Client Services, Mercury Media Santa Monica

Agency of Record. In the world of advertising, agencies strive for this label. However, for Long Form Direct Response, this has become a rarity. More and more, marketers are working with multiple agencies. While the upfront implications of this may appear positive, ultimately, this can harm not only one marketer’s campaign, but the general state of the industry.

Why are marketers using multiple agencies? There are two core reasons: Long Form media is finite. Any given station will only open so much time for 28:30 programming and many don’t have long form inventory available at all. Marketers seem to believe that they need more than one agency to get a sufficient quantity of media time. The second factor often has to do with creating a competitive atmosphere among their media partners so as to facilitate a “hunger” within each agency.

As with all things, there are pros and cons to this thinking. Every agency has time that’s proprietary to them. But does that third, fourth, fifth, etc. agency have enough unique time that it outweighs the risk? In most cases, the answer is no. So what exactly is at risk? The biggest risk in using a multitude of agencies is that is drives up media rates. Each campaign has its own set of characteristics and therefore performs best in particular stations and time periods. When many agencies are targeting the same stations and time periods, rates increase due to bidding against each other for that same time. This also creates a false demand which has a domino effect across the industry as a whole. Another factor that has had a negative effect on pricing is the increase of newer and smaller agencies over the past couple years. These agencies need to build a historical database. In order to do so and learn the worth of the media, they secure time at whatever cost. Inevitably they end up overpaying and a marketer could have booked that exact same time through a larger, more established agency at a much better rate! Again, false demand is created, rates escalate, and the industry suffers. In a worst case scenario, a client may be pre-empting himself and not even know it! This isn’t speculation- we have seen it happen first hand! Another risk factor is the high level of management that’s required when several agencies are buying for one campaign. Multiple agencies booking the same show will inevitably lead to airings being booked too close together. Rarely does this fare well for results. And with agencies making changes to their schedules on a daily basis, truly avoiding conflicts can be overwhelming for a marketer to say the least. Even then, the likelihood of something slipping through the cracks is high.

We may be biased, but we think working with a large, experienced agency is the way to go. A company such as Mercury Media offers buying clout, category experience, flexibility, and an extensive database with a wealth of Long Form knowledge. The notion of “finite inventory” is refuted because we already own 15-20% of all Long Form inventory and are able to scale quickly as our clients have the need. By having AOR, we are able to have full visibility into a client’s campaign and best manage rates and responses. We can buy better, plan better, and get as much inventory as necessary and at the best rates! We can ramp up without stepping on ourselves and ensure a client is growing strategically. Bottom line- we can make a campaign THRIVE!

So when it comes to agencies, is more, merrier? Not really. For clients could secure the same media inventory at lower costs by narrowing their agency roster and making their agencies take responsibility for managing the buys.

As Vice President, Director of Client Services, Olga Ackad manages the company’s client services division in Santa Monica which is fully dedicated to closely managing the media campaigns for each of our clients. Her team advises clients in all aspects of a direct marketing campaign in order to maximize performance. Olga has a well-rounded and all encompassing knowledge of the Direct Response industry.

Contact her at olga@mercurymedia.com

By: Michael Goodman, Strategic Analyst, Mercury Media

Over the course of the past three years the American economy has been laboring to get out from under a recession the likes of which we have not seen since the Great Depression of 1929-33. As a result, Americans’ are lowering their expectations about retirement and their children’s future; are becoming thriftier; and are concerned over how long it will take for their finances to recover.

According to the University of Michigan’s Panel Survey of Income Dynamics (PSID), median household wealth decreased by an estimated 19% from 2007 to 2009. As a result, consumer lifestyles are changing. According to the Pew Research Center, 62% of U.S. households have cut back on household spending during the recession and 71% of buying less expensive brands. Rather than short-term adaptations to economic circumstances these changes seem to be fundamental changes in consumer buying patterns. Forty-eight percent of U.S. households said they plan to save more and 31% say they are going to spend less once the economy recovers.

This presents both a challenge and an opportunity to marketers. Traditionally, advertising has sought to raise awareness about a product or service and create positive feelings such as “this brand understands you” or “our brand’s cool, if you use it you will be to.” In today’s economic climate, however, purchase decisions are increasingly about value and benefits and less about what’s “cool.” To further complicate matters, companies are cutting their advertising budgets in an effort to boost their financials during these difficult economic times.

To counter these challenges many marketers are turning to direct response television (DRTV). DRTV spots are typically longer (60, 90 and 120 seconds) than traditional brand spots, allowing marketers to more effectively promote the benefits of a product or service. DRTV spots are also frequently bought as remnant time or as run-of-schedule at steeply discounted prices, often 10% – 50% off the rate card. For the cost of a single 30 second spot in primetime, advertisers can get dozens of spots across a broad range of stations.

Other benefits DRTV offers marketers include the following:

• DRTV is measureable. DRTV allows marketers to measure the effectiveness of their creative and media buys by tracking responses via the phone and web, and analyze inquiry and order conversion metrics to optimize their creative and media buys.
• DRTV lifts all channels. Like brand advertising, direct response TV influences everyone that views the campaign. Incorporating a DRTV campaign into an integrated marketing plan lifts awareness and response across all channels while providing enhanced visibility into campaign performance.
• DRTV drives retail. Some brand marketers continue to operate under the misassumption that selling direct-to-consumers (DTC) creates channel conflict when, in fact, they couldn’t be more wrong. So long as you don’t undercut the retail price, retailers are strong supporters of DRTV, often encouraging marketers to run DRTV campaigns.

Direct response television has helped many a brand survive and prosper during difficult economic times. According to the Direct Marketing Association (DMA), DRTV grew roughly 10% during the last recession in the early-90s. Now is the time for marketers to embrace DRTV once again.