By Jason Bohrer, Associate Media Director, U.S. and Jessica Muzzin, Associate Media Director, Canada
You’ve read Part One of our guide to DRTV Media in the U.S. and Canada. Now, our Associate Media Directors are back to take a deeper dive into the current and future trends affecting the media landscape.
In this latest installment of our Q&A series, Jessica and Jason pull back the curtain on their respective direct response media markets.
1. What are the most popular lengths for DRTV?
Jason: Short-form DRTV spots can range anywhere from 5 to 120 seconds. In general, a :60 spot length is the most popular. That gives enough time to get key messaging and a call to action (CTA) across to the viewer, and a 60-second commercial can be purchased for about half the rate of a :120. For new advertisers selling a complex product or service, a :120 may prove to be a better option out of the gate, in order to educate potential consumers. Once enough frequency has aired and consumers are used to seeing a spot, shorter lengths would be recommended. On the other end of the spectrum, a 5- or 10-second commercial can be very efficient, assuming the concept of the product/service showcased is easy to grasp.
Jessica: With the exception of :05 and :10 creative lengths, the majority of what Jason said is also applicable to Canada as well. Although both are accepted by broadcasters, these short lengths would only be recommended for an established product and not recommended for direct response.
2. What is the clearance process for TV in Canada and the U.S.?
Jessica: Rather than having to submit creative to multiple stations for approval before airing, in Canada we have the Television Bureau of Canada (TVB) that reviews and approves creative and provides a clearance number, which is recognized by the majority of stations. The TVB number is included on traffic instructions that are sent to the station indicating that the creative meets telecaster guidelines.
Jason: While the TVB rules on all commercial clearance in Canada, U.S. content standards are set by each individual broadcast entity. Save for a few widely-known rules set by the FCC (for example: no cigarette ads, no active drinking of alcohol, etc.), the commercial clearance process in the U.S. is fairly lax.
Together, the FCC and the FTC have created TV advertising regulations. In addition to having specific technical standards (e.g., HD, SD, etc.), they have outlined restrictions on certain products, content, and claims. Additional content standards are set by individual television broadcast entities to accommodate local laws, community standards, and their particular audience demographic.
3. What is the state of Programmatic and Video-On-Demand in both North American markets?
Jason: “Programmatic” remains one of the industry’s hottest buzz words. It is estimated that 4-5% of all TV buys in 2015 were bought programmatically. That number is expected to increase in 2016 and keep on growing. As a refresher, programmatic TV uses technology platforms to automate the buying process. Purchasing inventory programmatically also allows for new advanced targeting based on psychographic data, purchase habits, etc.
Video on Demand (VOD) advertising also continues to grow. Set-top boxes are used to stream content, allowing viewers to pick and choose what they watch at any time. Nearly half of all US TV homes are VOD-enabled, and this does not include streaming services like Netflix and Hulu.
Dynamic Ad Insertion (DAI) is the process of placing an ad over a traditional VOD ad. DAI buys can allow for additional value by offering advertisers an opportunity to deliver their message to highly targeted segments. Sellers of DAI inventory typically use set-top box data to measure important viewer characteristics such as demographic information and consumer habits, etc. Although DAI buys traditionally have a higher CPM than VOD, the ability to drill down to such an optimal audience can prove invaluable.
These types of advertising will continue to evolve as advancements in technology are made.
Jessica: For Canadian DRTV campaigns, programmatic and VOD are still in their infancy considering the lack of measurement available at this time. Some networks are offering VOD inventory on a CPM basis, while others only sell at a cost per program, which is priced at a premium compared to traditional DRTV rates. Vendors typically do not provide any post-log type of documentation or any audience guarantees, which makes it impossible to optimize the campaign towards a specific response as we are unable to attribute response to a specific program or station.
4. Finally, what lies ahead and what does the future of TV media mean for direct response?
Jessica: Already it’s estimated that more than half of all digital advertisements in Canada are served programmatically. We expect to see a similar adoption of programmatic TV over the next couple of years. Over time, we expect the offering to evolve and the optimization capabilities to broaden beyond audience segment to include daypart and cost-per targets, for example. From a direct response perspective, although the inventory will likely be more expensive, with the targeting and optimization capabilities, we would anticipate higher response which would result in increased efficiencies.
Jason: The majority of what Jess says above also rings true for the U.S. TV programmatic spend should be somewhere in the area of $900 million in 2016. It is estimated that around $10 billion will be spent on programmatic TV in the United States by 2019. Quite an increase! Technology for targeting consumers will continue to allow advertisers to really hone in on who it is they want to reach. The more scientific the game gets, the more agencies and clients will be willing to pay to reach their target audience.