2021 Advertising Shows Strong Optimism

2021 Advertising Shows Strong Optimism

2020 was a difficult year for virtually every industry, including traditional advertising. However, there is light at the end of the tunnel as we begin the New Year, as advertising spending in 2021 is projected to bounce back and show positive gains that lead the way for years to come.

A recent report from Magna shows that the U.S advertising market was one of the most resilient sectors from the downfall of COVID 19-related closures and budget decreases, showing just an average 1.5% decline in spend for 2020. Overall, spending is expected to rapidly increase in 2021 as many companies shift their focus to online commerce and retail efforts. According to Morningstar, online ad spending is expected to grow 20% in 2021 and a 14% average rate for 2022-24, outpacing the annual growth rates of 2017-19.

Looking at advertising trends by medium, the digital advertising outlook for 2021 is also quite optimistic. Magna forecasts an 8% year-on-year growth for digital spends of over $336 billion, bringing the medium’s share to 59% of total ad spending. In particular, increases in social media spending will be fueling this trend, as platforms gain more users and increase the lifetime value of each user. A study from eMarketer forecasts U.S. social media ad spending for 2021 to increase by 21.3%, reaching nearly $49 billion in overall spend.

These sizeable gains in online spending are in large attributed to online retailers increasing their advertising efforts to attract and retain long term customers and build brand reputation. According to research by Criteo, in recent months, 53% of consumers have discovered at least one form of online shopping that they plan to continue purchasing from.

Direct-response and digital advertising campaigns will remain at the forefront of marketing growth for 2021 and onwards, as first-party data gives brands useful insights into their customer’s behavior, identifying the path to maximize sales and recurring subscriptions. Social media platforms are also becoming much more efficient at targeted marketing and helping businesses integrate digital communications and robust payment systems that streamline purchases and customer experiences.

2021 will be the first year in history that digital advertising attracts more than 50% of global ad spend, a trend which is likely to only increase over time. Right now, it is more relevant than ever to ensure your business has an omnichannel marketing strategy that diversifies advertising spend to reach new customers and amplify sales. Contact us and see how we can positively impact your business for the New Year.

For updates on new market trends and industry insights, follow our River Direct Facebook & Instagram pages, and subscribe to our newsletter.

Sources:

https://www.emarketer.com/content/us-social-media-advertising-in-2021

https://www.forbes.com/sites/bradadgate/2020/12/14/ad-agency-forecast-expect-the-advertising-market-to-rebound-in-2021/?sh=5d98a9806adb

https://www.morningstar.com/articles/1014195/digital-ad-spending-poised-for-exceptional-growth


The Impact of TV on Digital Performance

The Impact of TV on Digital Performance

Traditional television advertising continues to dominate, and in fact, has been shown to substantially improve the performance of digital advertisements by forming lasting impressions among viewers and building trust with your target audience. According to a report from Mediascience, television ads running concurrently with digital ads increases the average viewership time by 300% compared to running digital alone and leads to an increased brand recall from audiences by over 200%. The combination of TV and digital advertising also boosts purchase intent by an average of 15% among viewers.

The main reason television advertisements pair so well with digital is because TV ads produce a halo effect which validates and solidifies a brand’s reputation. This phenomenon causes digital ads to also be perceived as more desirable compared to without a TV presence, which makes digital seem more exciting and less intrusive than TV ads alone. From a strategic perspective, incorporating both digital and traditional TV advertising into your business is likely to increase performance by a larger percentage than either medium alone.

TV ads also bring a higher level of attention to branding, as a recent study from EffecTv shows that 94% of audiences watch the full length of TV ads, compared to only 78% of viewers watching full length digital ads. We also know that lesser known brands benefit more from TV ads than established ones, as well-known brands such as Target or Coca-Cola experience a diminishing return from a saturated market of television brand awareness, making it the perfect opportunity for smaller businesses to start casting a wider net with their marketing budgets.

According to a study conducted by TVSquared, television advertisements drive an additional 23% average weekly increase in website traffic while TV ads air. Conversely, when a TV advertiser goes off-air, they see a weekly reduction of website traffic by an average of 20%. Pausing TV airings can also reduce a brand’s visibility and awareness, which leads to lost opportunities of converting leads into potential sales.

Consumer’s trust in television as a credible source of new information makes it an essential factor in your direct marketing plan, as a solely digital strategy does not create the same level of brand reputation as combining the two. Mediascience also reports that TV ads are viewed on average more than twice as often as digital ads, so it makes sense that seeing an ad on both TV and digital will yield a higher level of audience interest and engagement.

It is essential for brands to develop a consistent TV schedule to reach their target audiences and attract new customers by running a wide range of different airings and channels. Building trust with customers has never been more important at a time such as this, utilizing the halo effect of TV paired with digital advertising will position your business to take full advantage of an omni-channel marketing strategy.

For updates on new market trends and industry insights, follow our River Direct Facebook & Instagram pages, and subscribe to our newsletter.

Sources:

https://www.facebook.com/business/news/insights/what-do-marketing-leaders-say-about-combining-tv-and-facebook

https://yousenditcc.s3.amazonaws.com/user7/The-Halo-Effect_TV-Drives-Digital.pdf

https://www.mediapost.com/publications/article/356159/ad-effectiveness-tv-plus-digital-significantly-ou.html

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Motivating Your Team During COVID-19

Motivating Your Team During COVID-19

Every Monday at 11AM, River Direct (RD) has a company-wide meeting to discuss campaign strategy and media performance for the previous week.  The entire RD staff squeezes into our main conference room to discuss media and the overall DTC marketplace. We are a small agency with a very family-oriented culture, so the meeting is also a great time to catch up with one another.

Unfortunately, that weekly gathering came to an abrupt halt with the onset of the COVID-19 pandemic. During the initial weeks of COVID-19, there was naturally a great deal of uncertainty. River Direct employees started to work from home, and everyone had a lot of questions, but nobody seemed to have any answers.

How long are we going to work from home? Should I wear a mask, don’t wear a mask, how many times a day should I wash my hands, what should I use?  Am I going to get sick, am I going to lose my job, are our clients going to stop advertising?  What’s going to happen to my family and friends?

All valid questions and concerns, but at the end of the day, we still had a business to run and clients that depended on us. But how do you motivate your team during a pandemic?

EASY, a good old-fashioned wager.  As VP of Client Services, I wanted to keep things fun. Give our media team a seemingly UNREALISTIC GOAL and BET them that they couldn’t reach it. But what do you bet your team when they think the world is coming to an end? Money, stock options, gold bullion? BORING! So, without thinking it through fully, I said, “I will give myself a MOHAWK, if you are able to increase our billings (insert crazy percentage here)!”  At first, I immediately regretted what I said, but with the crazy number I threw out, I wasn’t TOO worried about it.

The media team had just one week to increase our overall billings, which is not a ton of time by any means. By the end of the week they had gotten within 5% of the goal and almost won the bet. A smart man who loves his hair would have learned his lesson and walked away. Not this guy, I doubled down. They came so close on the initial bet, so I felt it was only sporting to give them another shot. Our budgets were surging, and our clients were also doing very well. But push as they may, the team came up short once again.  Since our budgets kept growing, I decided to roll the dice one last time, but this time, the team needed to hit an even higher goal.  I thought: There was no way that was going to happen. So far, my salt and pepper locks had evaded the cold steel jaws of a Phillips trimmer. 

Once again, I anxiously watched the budgets grow by the minute. I knew my hair was gone when someone added two huge high-profile airings on a prime network. The team started chirping, “Get those clippers ready!”, and “Can’t wait to see your new do!”.  I pulled the budget report one last time, and sure enough, our team surpassed their goal. When I told my wife I lost the bet, she just snickered and looked at me like I was a child. Being a man of my word, I got my first ever mohawk, and I kind of liked it!

Fast forward to the Monday Zoom meeting, everyone had their cameras on except me. I thought that maybe they forgot about our bet and nobody would notice I had mine off. Not so much. As soon as I logged on, everyone said, “Turn on your camera, let’s see it!”. I clicked “Start Video,” and there I was, a grown man with a mohawk on a Zoom meeting in front of the entire company.

 

It’s never fun to lose your  hair as a result of a wager, but in this case, it was a fun way to motivate our team and keep things light.  

At the end of the day, a lot of great things came from this silly little wager. We hit our highest budgets to date this year, everyone qualified for a nice incentive, our clients had great results, and I got the haircut I always wanted, but was too scared to get. Most importantly, it was a great motivator and fun distraction that took our minds off of the pandemic for a brief moment… so it was ALL WORTH IT!

RD Fun Facts: How Station Start-Times Affect When Your Ads Will Air

RD Fun Facts: How Station Start-Times Affect When Your Ads Will Air

As a busy media-buyer I don’t think a day goes by without a thought or a mention on a topic relating to “station start-time.”  It is something so basic and engrained in the direct response media world that most of us don’t give it a second thought.   From coordinating phone rooms and listing services to explaining to clients when their ad will actually air, vs. the time/day it is booked in our system, station start-times greatly affect the behind-the-scenes logistical nuances of station programming. With 25 years of media-buying under my belt, the start-time annoyances continue on day after day.

What exactly is station start-time and why is it that stations are not universally aligned when it comes to start-times?  A station’s start-time is the time at which a station starts its new broadcast cycle for the day. While some stations start at 4am, others start at 5am, 6am or 12am.  What’s the big deal you ask?  The big deal is, if a station starts their day between 12:30am-6am, any media booked between the hours of 12:30am – 6am for a particular date, doesn’t actually run until the following day.  Make sense?  In other words, if I book a 2am airing for 12/1 with a station that has a 4am start, then the ad won’t actually run until 2am on 12/2. With hundreds of stations out there and tons of ad space I have to book, you can see how things can get tricky with figuring out when ads will actually air.

I spoke to a few seasoned veterans in this business to get their take on this topic.  We all agreed on some form of the explanation below as to why stations aren’t universally aligned when it comes to station start-times.

Once upon a time, stations did not run programming 24/7.  If you were around in the 70’s, you may have watched the color bars and listened to the single droning tone for a few minutes in anticipation of a cartoon starting at 5 am.  Those were the days when stations didn’t have enough programming or viewers to fill up a 24-hour day. Therefore, station start times varied from station to station.  As more stations popped up, the exasperating trend continued.  

 

Prior to 24/7 programming, it was very common to see SMPTE color bars on your TV set.  Stations have since filled their time slots around the clock, but station start-times have mostly remained unchanged.

As one of the GSMs of a broadcast station explained, “Before hubs, station groups, and being on the air 24 hours a day, we had sign-on and sign-off.  Stations all signed on at different times and that was their start time.  Stations continued to use that start time when they went to a 24-hour broadcasting day. Some stations have adjusted to match the start-time of their owned group or traffic hub, but still no standard 12am time for all.”

Nonetheless, there is something warm and fuzzy about stations continuing to use their old start times in this day and age of constant progression.  It is a nice bit of nostalgia.  One station group, Nexstar, has even brought back the National Anthem at 4am before starting their regular daily programming. I will now smile and think of the past every time I come up against a day-start issue….I hope you will too!

COVID-19: Potential Short-Term & Long-Term Effects on Advertising

COVID-19: Potential Short-Term & Long-Term Effects on Advertising

Just four weeks ago, before our world was upended by the coronavirus strain known as COVID-19, no one would have foreseen that weeks later, our healthy economy would come crashing to a grinding halt.  This happened at an unprecedented rate, and was so quick in its onset.  With most of the nation confined to our homes without outside contact, many are fearful what the future holds.  

As a media agency, we have been through crises in the past of political, social and financial natures.  We have survived some of nation’s most trying times, including 9/11 and the Great Recession of 2008. Through our experience, we have seen certain trends and are anticipating that this may play out in a “similar” fashion.  Being in the direct response and DTC industry, our benefit in the past, and as it is right now, is our ability to know “how the population is responding to our advertising.”  We can see if they are going to the websites, calling the phones and ordering the products.  We have seen in the past and are experiencing it today, that Direct to Consumer products that make things easier at home are the ones that will trend (i.e., home cooking, exercise, education, well-being, vitamins, minerals and other supplements).  People will be looking for ways to save money and feel better about themselves (home care, beauty) as they exit the “quarantine” and wait for the economics to adjust.

Due to shelter-in-home orders, viewership levels are up, but people are not necessarily responding in mass due to the economic downturn they are personally feeling or apprehensive about.  Thus, in trying times, River Direct works closely with TV stations and digital publishers to make sure that the rates being charged, are commensurate with the audience delivered and the orders being generated.  General advertisers have a tendency to pull media when a crisis of this nature occurs and thus, media rates decline. 

Many of our clients have asked us how we anticipate things playing out in the advertising/media buying world.  Due to the unchartered nature of the current crisis, there’s no way of knowing – however, we offer a few scenarios: 

Best-case Scenario: Social distancing works and the virus peters out by early May/June.   People begin to go back to work and receive paychecks, economy starts to improve.  The media will start to pick up slowly as people gain confidence.  People will pull out their wallets and order product.  The general-rate advertisers will come back into the space “slowly” (Q3) allowing direct response/DTC to take advantage of the situation from May going forward….4th quarter ends up being more aggressively pursued and election dollars go into the market as planned.

Delayed-Recovery Scenario: The virus starts to disappear between June and end of July….in direct response we are able to take advantage knowing how people are feeling and make it through third quarter and hope there are no virus rebounds and anticipate a strong 4th quarter for direct response; with General advertisers having a bit more trepidation but still engaged.  Election dollars are there and rates are reasonable.

Lengthy-Recovery Scenario: The virus is not contained, and has a resurgence in places where we thought it had gone away and doesn’t disappear until late summer.  Economy is slow in getting back to speed and trepidation continues to occur in the market place.   The summer months’ rates decline precipitously and people are not confident and don’t have extra monies to spend and are not purchasing product.  Personal financial burdens are tough and advertising in general is soft.  We always have the advantage in knowing what to pay based upon response, but the fear is people slow down their purchasing because of the economic setback.  The ad industry for 4thquarter is soft for general advertisers and those doing campaign advertising will get the ads for a very low rate due to decreased demand. 

So here we are in early April, trying to predict the future, as everyone else in the world is trying to do the same.  In our hearts, we are anticipating the “Best-case Scenario” and at worst, hoping for the “Delayed-Recovery Scenario.”  Most importantly, we are all praying that our nation is able to work together to keep the loss of lives at a minimum, and to recover as quickly as possible on all fronts.

Related Articles:

https://hbr.org/2009/04/how-to-market-in-a-downturn-2

https://www.mediapost.com/publications/article/349698/marketers-time-to-dust-off-maslows-hierarchy-of.html