Response Magazine - September 2008

distributors and global product suppliers alike. Existing agencies seem to be fighting over the limited media inventory, thereby driving media rates up. If this continues, media will become unaffordable, hurting not only the distributors, but also the suppliers, which depend on the media to generate product sales.

Fays: Given the strength of the national upfront this year, I forecast some tightening of inventory for DR clients in 2009. Bottom line, I believe pricing will go back up to 2007 levels.

Hawthorne: The growing use of video-on-demand (VOD) for long-form DRTV as advertisers begin to make use of cable nets’ enhanced VOD technology will be a major issue.

Lee: Online marketing, mobile marketing and more in-depth database mining will receive more attention.

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Savage: The economy is the big story: how it affects consumer response, and which marketers and media sellers will be able to take advantage of how it affects DR media inventory and rates across all categories.

Are the Federal Trade Commission (FTC) and Federal Communications Commission (FCC) expanding, maintaining or backing off on the number of investigations into DR-related marketing programs? What do you believe the most crucial marketing topics facing these two regulatory bodies will be in the coming 12-24 months? Greg Sarnow, Direct Response Academy: It’s expanding. The FTC is getting larger budgets, and it will increase its investigations, especially in the nutritional health and dietary supplement product categories.

Richard Stacey, Northern Response Intl. Ltd.: The Electronic Retailing Association (ERA) has done a great job in the United States with its self-regulatory program. Prior to the ERA system, there were no winners. Going forward, crucial topics should include those issues that most significantly affect consumers. The FCC must better deal with access issues, as there is still no reason why the U.K. has more than 40 shopping channels and the U.S. has only three.

Eden: The FTC and FCC as regulatory bodies have tunnel vision. There are really no standards that a marketer can count on when developing its offer or creative. They grease the squeaky wheel based on consumer input after the fact, rather than being proactive. The key focus of these regulatory bodies should be pharmaceutical and nutraceutical companies. They should be held to more stringent standards — beyond the direct-to-consumer (DTC) guidelines. This form of advertising has caused a significant increase in the use of medicine — often consumer requested — as well as unnecessary fear of new symptoms. The contra-indications

of nutraceuticals and prescription drugs are unknown or not shared with the consumer.

Garnett: It seemed that there was more scrutiny than usual from these bodies. And that’s good for our business. The ERA’s theory of “self-regulation” hasn’t been helping, and we’re seeing just as many egregious violations of marketing ethics as we’ve always seen. We had some new contact with the “traditional” DRTV business in the past year, and I now see that it’s going to be impossible for there to be effective self-regulation.

How do you believe the industry will do post-Olympics and post-election? Fays: Part of the strategy for national sales to increase volume in this year’s upfront was to protect against a softening marketplace after the Olympics and election. At MTVN, we have the DR inventory carved out already for our clients, but other networks that wait for the scraps to fall off the table will be greatly affected.

Hawthorne: Our industry has remained relatively strong through the current economic downturn. And after the dip during the Olympics and elections, I see growing revenues because of an expected overall uplift in the economy in early 2009.

Lee: The economy is absolutely having a small effect on the industry — but the winners will be the marketing companies that understand the consumer and take the time to keep touching the customer. It is all about relationship marketing.

Medico: It is a typical cycle that we go through every four years, and it will be no different. Perhaps the soft economy may help in the late fourth quarter and in first-quarter 2009, opening up avails and lowering remnant rates.