BATAVIA, Ohio (AdAge.com) -- Expect to see less of Snuggie and ShamWow on TV in weeks ahead as one of the best-ever markets for direct-response buyers lurches in the opposite direction.
A rapidly tightening scatter market is leaving Snuggie and other DRTV marketers in the cold as traditional advertisers snap up the remnant time slots once left to them. "This is probably the tightest time I can remember in my history with direct response," said Scott Boilen, president of Allstar Marketing Group, the company behind the Snuggie. "We were the industry that took what's left," he added. "And there's not a lot left right now."
Mr. Boilen dates the shift to July and said it's continued into the fourth quarter, an apparent outgrowth of deals made in an unusually contentious upfront, when the networks held back more scatter inventory than normal.
The tightening is a result of some established advertisers adding to their upfront buys, along with networks having to offer inventory as "make-goods" to make up for ratings shortfalls over the past years. Larry Novenstern, exec VP-director of national and local broadcast at Publicis Groupe's Omnimedia called this "a combination of slightly reduced supply and slightly increased demand."
The networks are not at all displeased to see DRTV advertisers getting knocked out of some of the roosts they've enjoyed during an economic downturn, because they typically pay lower prices than the norm. "In the malaise that was out there in the first six months of the year ... you saw a lot of direct response popping up in network prime time," said one media-buying executive. "Well, not right now."
With fewer cracks at affordable TV slots, Snuggie, which had launched last year behind primarily 60- and 120-second spots, has down-shifted to 10-, 15- and 30-second commercials, Mr. Boilen said, noting that other DRTV advertisers are also moving to shorter forms.
Gerald Bagg, CEO of Quigley-Simpson Brand Response Advertising, likewise has noticed the tightening, but believes the market is already starting to shift again and will normalize by the first quarter now that direct-response time is no longer a bargain.
Media sellers probably discounted their pricing too much in upfront negotiations, he said, leaving more marketer money on the table chasing a shrinking amount of scatter inventory now. "I think everybody overreacted to market conditions," Mr. Bagg said. "It's akin to the stock market collapsing and people, instead of holding onto their shares, selling and losing value. ... But it's a short-term hiccup, and I don't think it's going to prevail much longer."
"All the consumer-products companies and other big advertisers have renegotiated their rates, so they're able to buy more time, and things are back to where they were [before the recession] or even worse for us, because people are advertising more at the lower rates to try to make up for lost sales," said A.J. Khubani, CEO of TeleBrands, marketer of such products as PedEgg and JupiterJack.
Direct-response marketers are still being helped by retailers giving their products more prominence as other categories have softened, Mr. Boilen and Mr. Khubani said. Mr. Khubani said the "as seen on TV" category has surpassed cold and flu as the second-largest category, behind prescription drugs for major drug retailers, and the strength of DRTV products has helped make TeleBrands a vendor of the year at such accounts as Walgreens and Target in 2009.
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Brian Steinberg contributed to this report.