SMART BUY

Mark Your Calendars

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Mark Your Calendars

Not long ago, my favorite end-of-year ritual was the purchase of a new day planner. I would head over to the local Staples in December and pore over the planners for hours, deciding whether I should buy one that breaks down the year by day or week. The daily breakdown was considerably heavier since it included at least 365 pages, while the weekly planner was a mere 75 pages. More times than not, I would opt for the weekly planner because it was easier to carry.

 

With smartphones, of course, this ritual has gone by the wayside. It beats having to write everything down and lugging a book around everywhere I go.

 

As the electronic calendar flips to 2014, the television landscape is changing, as well. More and more viewers are heading to video-on-demand (VOD) on the Web, and as a result, advertisers are shifting their dollars to those media. The direct response world is following suit, with lead-generation commercials gracing VOD platforms and streaming sites. With this move away from traditional television viewing, one would think that the days of sitting on the couch with remote in hand are gone, but we aren’t there yet. Most Americans still watch the old-fashioned way, and advertisers still pour millions of dollars into television.

 

DR nirvana arrived on December 26th, as retail closed the book on another holiday season. With open inventory and little in the way of incremental dollars, the direct response advertiser is looking at a plethora of opportunities this month. Competition for ad space traditionally comes from the weight loss category, playing off new year’s resolutions to drop a few unwanted holiday pounds. Car companies usually buy up a lot of inventory, too, trying to move their newest models.

 

While the holidays last, consumers are preoccupied with spending money on gifts for others; when the holidays are over, consumers are ready to buy gifts for themselves again. Combine this mindset with open inventory and affordable rates, and you have a favorable situation for the DR advertiser. Testing new products at this time can help advertisers boost revenues and turn a nice profit. January response rates are usually 35 percent higher than the rest of the first half, and once the month ends, response drops drastically. Take advantage of the high response in January, and you can start the year in a profitable way.

 

The time of year is one of many factors to consider when testing a new product. Different products perform better depending on the season. For instance, lawn products do well in the spring, with the optimal peak advertising season starting in late February or early March. Although many consumers aren’t thinking about watering their lawns in January, they are looking forward to warmer weather, and testing can give advertisers a good handle on what may perform well during the upcoming year. With response so high, any test should do well enough to indicate which products will and won’t be breakout hits—and save media dollars and headaches as a result.

 

Indoor Sports

As the temperatures drop, viewerships rise. Airing divisional and championship games, CBS and Fox enjoy some of the biggest boosts, and with top shows such as NCIS and American Idol, the two networks will easily outpace the rest of the network lineup. NBC will have the NFL Wild Card weekend doubleheader and the Golden Globes to help maintain its December viewership numbers. ABC’s only notable show this month is Dick Clark’s New Year’s Rockin’ Eve, but the network’s average viewership tends to fluctuate less than 5 percent on a month-to-month basis.

 

Overall cable viewership grows in January, too. With no holidays to distract people, news networks such as CNN show considerable increases in viewership. Food Network, HGTV, Lifetime, and Nickelodeon should also see gains. TBS and USA will likely see big lifts during the month, with The Big Bang Theory and Modern Family posting numbers comparable to their network first-runs in syndication. And just as CBS and Fox benefit from the pro football binge, ESPN will capitalize on college football, pulling in big audiences for the Bowl Championship Series (BCS) Championship game.

 

Cost of media is always an issue, but the issue isn’t as cumbersome in January. Many broadcast networks air reruns during the month, so audience deficiency units (ADUs) won’t be in high demand on the advertiser side. The scatter market is usually on the soft side, so general advertisers won’t put as many incremental dollars into the marketplace. These two variables help create a very favorable market for the DR advertiser, with inventory available and costs on the lower end of the spectrum. Added viewership and lower demand on the advertiser side equates to favorable CPMs, with costs low enough to help aid overall yearly CPMs.

 

Taking advantage of network daytime inventory has been the norm for DR advertisers during the month of January for several years. Moving dollars into programs such as The Price is Right, Let’s Make a Deal, The View, and Days of Our Lives can bring increased volume and low CPM structures as the year kicks off. Once the month ends and February sweeps begin, network inventory will be consumed by general advertising and ADUs, making January the best opportunity to run alongside programs that are not usually available to the DR advertiser.

 

Aside from media cost, the biggest issue is response. In most months, response is limited to a favorable one or two weeks, but the entire month of January is a response bonanza. Take advantage of this; the month is so prolific that call totals can represent more than half of an advertiser’s first-quarter totals. With conversion rates higher than the rest of the year, DR advertisers can start the year with a very healthy bottom line.

 

The biggest question is when to test. With response on the advertiser’s side, it is imperative that any advertiser testing a product takes advantage of this time of year. Even though your product may not have the correct seasonality, higher levels of response can help offset that fact and help determine the product’s lifespan. Testing early in the year can also help stage future tests, providing a baseline for response. Roll out products that test well while response is high and costs are low, and revenues will increase.

 

If I find myself at a Staples in January, I’ll glance through the closeout desk calendars and day planners, and remember the good ol’ days. And then, my iPhone will sound a calendar reminder and snap  me right back into reality.

 

 

Eddie Wilders is vice president of research and analytics for Lockard & Wechsler Direct in Irvington, N.Y. He can be reached via email at ewilders@lwdirect.com or by telephone at (914) 591-6600.