May 2008 - Channel Crossing: DRTV

The Uncertainty Principle

By Dan Zifkin

The great scientific mind, Stephen Hawking, said it best:

Over a large number of bets, the odds even out and we can make predictions; that’s why casino owners are so rich. But over a very small number of rolls of the dice, the uncertaint y principle is very important.

That “uncertainty principle” is what should govern media markets every four years when major general elections and Summer Olympic years converge-but it usually doesn’t. We find a lot of people make sweeping generalizations about what effect both occurrences will have on the demand (and supply) of media time during these years, as well as the resulting effect on media pricing. Since the convergence occurs only every four years (small rolls of the dice), predictions based on generalizations tend to be-shall we say-”dicey.”

One of our new business client prospects recently told us that he had been looking seriously at launching a direct response TV campaign, but was pretty much set on waiting until 2009, because “election/Olympic years wreak havoc on prices for TV advertising.” While our client prospect may not necessarily be wrong, he might not be right either. From our experience in handling client media spending, we have found that there’s really a lot of dissimilarity and inconsistency in these years.

Here are a few examples of what I mean:

Olympic Games - The Seoul 1988 and the Sydney 2000 Games were both held in late September-impacting the start of the traditional fall TV seasons; the Games in Los Angeles (1984), Barcelona (1992), Atlanta (1996) and Athens (2004) were held in late July/early August-traditional lower viewing periods of the year and lesser DRTV demand periods. The 2008 Games in Beijing are entirely in August. We don’t see the ‘08 Games having a major negative impact on the ability to make a DRTV campaign work in the second half of 2008, given how many months remain after Beijing that will be more “normal” media weeks.

Elections - We tend to forget that more political advertising money is spent locally, not nationally. Demand for national cable network advertising time-where many companies run DRTV campaigns-is not affected by political ad spending as much as it might have been in the past. The national candidates’ focus today on red and blue state electoral votes coupled with their own micro-targeting efforts has them spending in areas where they see real chances to affect outcomes.

The economy - The nation’s economic vitality doesn’t run in four-year cycles. The 1996 boom period was significantly different than the dot-com bust of 2000 just four years later; the raging inflationary pressures in 1984 were quite a bit different than the still-recovering markets of 2004, post-9/11. Generalized predictions made about the state of advertising pricing and supply and demand in advance of those years would have proven highly suspect-if not downright erroneous.

Given the current economic goings-on, suggesting that 2008 will be a tough time to place DRTV media based on past Olympic/election years is foolhardy. We’re more inclined to adopt Hawking’s “uncertainty principle.”

Dan Zifkin is president of Zephyr Media Group. He can be reached at (847) 328-1519.


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