Surefire way to reduce TV ad costs
Every TV advertiser should seriously consider using direct response television to stretch media dollars. The cost of direct response TV air time is generally half that of traditional rates, which is why I am mystified that more advertisers, if not all, don’t take advantage of direct response television (DRTV) rates.
Why two rate cards?
DRTV rate cards are used by advertisers whose commercials include specific viewer actions, such as a to call to a toll-free number or to go to a web site. TV station requirements regarding actions vary. Some allow use of the DRTV rate card without a phone number or website URL on the spot.
Easy remedies for any downside to DRTV
Why the difference in price? DRTV advertisers are willing to have their commercial time, also called spots, preempted, meaning higher paying advertisers get preference when inventory is sold out. That downside isn’t so bad; only 10-20% of commercials, or spots, tend to get “bumped.”
The easy way to ensure all campaign commercials run is to be willing to overbook. In other words, if you wanted 10 to run, order 12 spots. Or if you don’t want to risk that 12 spots will run, just be prepared that some won’t air.
Preemption rates have a seasonal fluctuation. Few spots will be preempted in 1st and 3rd quarters; 2nd quarter will have more preemptions and 4th quarter, due to the holidays, will have the most. The good news is that preemption rates predictable station by station, market by market based on many years of data.
Another disadvantage is that DRTV time is sold in broader rotations, or chunks of time. Unsing rates from a station in a top 20 market, note that instead of selling Good Morning America from 7AM-9AM, DRTV units are sold between 5AM-9AM.
To confirm that tremendous value of DRTV rates with loss of audience, notice that a group of 4 spots that run in a fair rotation through the 5AM-9AM segment (e.g., one between 5-6AM, one 6-7AM, etc.) would have the same audience, but that the cost to choose specific shows is DOUBLE that of the DRTV rotation. A no-brainer, right?
So why don’t more advertisers choose DRTV?
On speculation, it’s not in the best interest of stations trying to get the highest price for their wares to educate prospects.
Nor, is it in the interest of ad agencies to use these rates, because their income is based on a percentage of the ad rates. While 15% is allowed, many advertisers negotiate lower commissions, increasing the incentive for agencies to use traditional instead of DRTV rates.
I’m not saying that all agency executives and TV station representatives are bad people. On the contrary, many, in my experience, are great people. I’m just saying there is no incentive to tell advertisers about this opportunity.
Conclusion: Savings outshine manageable issues
What is clear is that even if advertisers just placed a portion of their TV budget into DRTV, they would enjoy significant, ongoing savings.