Good News for DRTV Advertisers: Media Price Recovery Is Slow

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By: Ronald C. Pruett, Jr., Chief Executive Officer, Mercury Media

The economy is creating new media rules.  An economic comeback does not directly correlate to rising media prices.  As this year starts to unfold, we’re not seeing significant rises in media rates, and we buy a lot of media.  Yet, reports of pricing pressure persist in media buying. That’s because the amount of demand simply hasn’t caught up to the amount of inventory.  The situation has improved from its low point in spring 2009 when the financial crisis was at its worst.  But it has not completely recovered.

Our company plays many roles for clients.  We handle creative planning and execution, campaign testing and data generation.  The media buying part of our role makes us uniquely suited to deliver successful ROI to our clients.  What this development (or lack thereof) in price hikes for scatter, network, local, and national cable buys tells us is that direct response TV may deliver better ROI as the year develops.  From my point of view, the market will remain a bit soft.  That equation is a good one for travel, health and beauty, automotive, retail, and other categories.

Look at a report released recently by Interpublic’s research arm, Magna.  It reports that “marketers are expected to begin restoring their budgets as industrial product and personal consumption expenditure indicators begin to mark improvement.”  Translation: consumers are buying and preparing to buy more goods and services.  Over the longer term, says Magna, national TV is expected to recover much better than local TV, with compound annual growth between 2010 and 2015 checking in at 4.1% in national TV and only 2.3% in local TV.

Those are not staggering numbers.  In fact, media predictions over the past two years have come up short.  This year will be no different.  As I said, I’d love to see the economic recovery. But if I were looking to sell in it, I’d be on DRTV.  It’s a good, measurable investment.

Ronald C. Pruett, Jr. is Chief Executive Officer of Mercury Media.  Prior to joining Mercury Media, Pruett was the Executive Vice President and Chief Marketing Officer of Polymedica/Liberty Medical, the largest publicly traded diabetic supply company and one of the largest multichannel direct response marketers in the country. The company was sold to Medco Health Solutions.  Pruett has extensive experience in the creation, acquisition, and management of direct to consumer marketing companies in the US and abroad.

Contact him at rpruett@mercurymedia.com

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One Response to “Good News for DRTV Advertisers: Media Price Recovery Is Slow”

  1. Chris Kelly Says:

    Ron your insight is right on the mark and again it is DR that will lead the way.
    I wonder what you think about branding advertisers moving to the DR model in this economic window the effects on broadcasters and how they can adapt to the changes they face in a slow now growth future where eyeballs alone are no longer enough.

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