Reaching Consumers Reeling from the Great Recession

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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.


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