It’s been two years since we last encountered a national TV scatter marketplace favorable to direct-to-consumer (DTC) & direct response television (DR) advertisers. Back in 2020, during the depths of the Covid lock down, DRMetrix an iSpot.tv Company, measured the largest ever year-over-year growth for DTC and DR. Media rates were at their lowest at a time when more people were watching TV than ever before. In contrast, traditional TV ratings couldn’t keep up leaving brand advertisers at a disadvantage. For more information, please download DRMetrix’s 2020 industry study.
Following 2020, the media pendulum swung the other direction. In 2021, traditional brand advertisers flooded back onto the airwaves. On top of a tighter scatter market, DTC and DR advertisers also began to feel the impact of global supply chain issues. But that same pendulum may once again be swinging back to the favor of DTC and DR advertisers. According to Standard Media Index (SMI), by the 2nd Quarter of 2022, scatter market investment declined 17% year-over-year. By Q3, things got even worse with SMI reporting that scatter spend on traditional TV was down 38% year-over-year. Marketing Brew wrote a story about this which you can read by clicking here. How will these trends bode for DTC and DR advertisers?
It’s now January 2023, and Bank of America just released their Consumer Checkpoint data reporting that 2022 was a solid year for consumer spending. Total card spending per household finished 2022 up 2.2% year-over-year boosted by services spending. If consumer spending holds up in Q1 2023, while the scatter market remains soft, it will definitely benefit DTC and DR advertisers. In fact, during the first 3 media weeks of 2023, DRMetrix is already measuring a significant +25% increase in ad units for DTC and DR advertisers year-over-year.
What we witnessed in 2022, during the Covid lockdowns, was the inability of brand advertisers to navigate the rapidly changing media and economic environment. Traditional ratings don’t provide a read on consumer sentiment leaving many traditional TV brands little choice but to be conservative and pull back on media expenditures. Quite often , these are years of great opportunity for DTC and DR brands who enjoy the unique ability to measure consumer response and sentiment in real time. As long as consumers continue to respond and purchase, these brands will aggressively expand their media buys even during the most worrisome of economic times. Since media commitments in scatter can be made week-to-week, DTC and DR advertisers are able to optimize and change their media strategies on the fly.
If you’re interested in learning more about the DTC and DR television industry, click here to learn more about DRMetrix and our competitive media insight offerings. Also, be sure to subscribe to this blog to be informed when we release our upcoming 2022 industry study (estimated to be in February of 2023) and when we announce the top DTC and DR advertisers in 2022 through our annual AdSphere Awards program.