SOURCE: Northern Lights Direct

Northern Lights Direct

January 21, 2016 08:00 ET

U.S. DRTV Media Marketplace 2016: A Look Ahead

CHICAGO, IL--(Marketwired - January 21, 2016) - To kick-start the New Year, Rebecca Barr, Vice President, U.S. Media from leading brand direct response (DR) agency, Northern Lights Direct weighs in on some of 2016's biggest direct response marketing trends affecting marketers and advertisers in the U.S. marketplace.

As we dive headfirst into a new year, direct response faces some familiar, once-every-four-years marketplace foes and some pesky recurring nuisances such as cord-cutting/fraying. In the U.S. television spending still outpaces all other media, including digital. The spending is where the eyeballs are -- and, for the moment, TV is still over 35% of the mix, but the gap is closing. The ever-changing landscape of how media is consumed, coupled with a wild election year, should make 2016 quite a ride for direct response advertising, so better buckle up.

Marketplace Conditions

2012 saw a record year from a spend perspective and 2016 is expected to top that. I think we can all assume that every election between now and when the sun swallows the earth will be more expensive than the one before it.

Looking ahead to the 2016 election, Kantar Media predicts overall TV spending for the 2016 elections will be about $4.4 billion, up roughly 16% from the $3.8 billion candidates and outside groups laid out for cable and broadcast ads in 2012. Candidates and outside groups are expected to spend $1.1 billion on digital advertising in 2016, up almost 700% from $162 million in the 2012 elections1.

David Axelrod revolutionized modern-day campaigning by bringing the use of technology to the forefront, but linear TV is still a big part of political strategy since the people who keep the torch alive for good, old fashioned TV watchin' are also the very same folks who vote consistently.

For TV spending, there will be some cable presence but local broadcast markets in the battleground states (Colorado, Florida, Iowa, New Hampshire, Ohio and Virginia with some heavy presence also in Massachusetts, Michigan, Minnesota, North Carolina, Pennsylvania and Wisconsin) will be the most saturated.

If your direct response campaign depends heavily on these markets, you will have to plan your flights around the primary and general election windows unless you can afford to take a hit on rates to hold your ground with inventory. If it is important to maintain a presence, book early to secure the time and convey your desire to clear -- even if it means paying more. Click here to read the full report.

If efficiency thresholds will make paying elevated rates impossible for you to maintain your DR campaign goals, you might explore moving a portion of your budget into other non-battleground markets or even national cable.

Summer Olympics from Rio
The Olympics are scheduled to begin August 5th in Rio de Janeiro, Brazil and will conclude on August 21st. Olympic impact is traditionally felt first on the network and then on the affiliate level in the spot markets. Also heavily impacted are the NBC-owned cables with coverage airing heaviest throughout the afternoon and primetime hours. Additionally, there will be some impact in late fringe with tape-delayed airings of early rounds of select sports and recap shows. It was announced last year that the coverage will include Ryan Seacrest. Make of that what you will…

If you don't depend on these areas, you will have a slight reprieve, but advertisers that rely heavily on these areas and are not a part of Olympic sponsorship will be forced into other areas of the market to meet their budgets. NBC plans a bazillion (estimated) hours of coverage per day across all of its platforms, including NBC network, NBC Cable, Telemundo and nbcolympics.com.

Expect no clearance on the NBC stations unless you pay a premium for the time and heavy pre-emption on non-NBC properties as other advertisers are forced to spend their budgets elsewhere in the market. The effect will continue to ripple throughout August and into September, just in time for the opening of the fall election window!

TV Trends

Cord Fraying/Cutting
The major trend in TV watching continues to be cord fraying and cord cutting, but numbers suggests this trend may be slowing. Tens of thousands of people cancel their cable packages every quarter, but there are still one hundred million people who haven't. This doesn't mean direct response advertisers can ignore it -- we still need to develop strategies to reach audiences, such as embrace digital marketing -- but it does mean linear TV as we know it isn't going anywhere anytime soon.

While the percentage of those cord-cutting seems to be slowing, the percentage of people returning to the living room (or other TV-enabled rooms in their house) have increased in the last three years, showing a trend away from consuming TV on desktop devices and back to a traditional TV via over-the-top (OTT) solutions like Apple TV and Roku, among others. This is good news on the front of those who have frayed and not cut, and suggests the trend may shift back to fraying and not outright cutting.

Summary

Scanning ahead in 2016, it's clear to see that are a few large marketplace hurdles to clear (getting into the Olympic spirit). The marketplace continues to change daily and we are in for a wild ride with the political season. No one truly knows what the future holds, but rest assured that the ride in 2016 will be interesting for direct response marketers and advertisers. The good news? 2017 looks very, very bright in comparison.

[1] The Wall Street Journal, "TV Remains King in Political Ad Spending" by Patrick O'Connor, August 30, 2015.

Read our 2016 Canadian Outlook here: 2016 Direct Response Outlook: Feast or Famine

About Northern Lights Direct:

Northern Lights Direct provides brand-based direct response television (DRTV) and digital advertising services for corporate and nonprofit organizations in the U.S. and Canada. With offices in Chicago and Toronto, Northern Lights Direct is the only independent DR agency that seamlessly helps clients advertise in the American and Canadian markets and is fully turnkey, providing direct response (DR) campaign strategy, media, search, analytics, creative and production services. The Art & Science of the Sell. 

For more information, please visit: www.northernlightsdirect.com

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