Talking TV: Can Direct Response Ads Lift Spot In ’23?
After riding the lucrative and euphoric highs of 2022 political spending, GMs are going to have something of a hard come down in major event-less 2023. Creative thinking is going to be more important than ever in meeting monthly and quarterly goals.
Enter Toni Knight, founder and CEO of WorldLink, one of the largest direct response ad agencies in the world. Knight says DR offers a lot of promise for the quiet year ahead if GMs think about it strategically.
In this Talking TV conversation, Knight shares how GMs should be approaching prospective DR advertisers, where streaming is playing a role and how those 30-minute paid programming slots are holding up in advertisers’ minds.
Episode transcript below, edited for clarity.
Michael Depp: What’s trending in direct response advertising? How much of it is getting routed to OTT or digital platforms like YouTube? And with a massive political year now receding in the rearview mirror, how should general managers be thinking about DR for 2023?
I’m Michael Depp, editor of TVNewsCheck, and this is Talking TV, the podcast that brings you smart conversations about the business of broadcasting. Today, a conversation with Tony Knight, founder and CEO of WorldLink, one of the largest direct response advertising agencies in the world.
Welcome, Toni Knight, to Talking TV.
Toni Knight: Thank you. Nice to talk to you.
Nice talking with you, Toni. 2023 doesn’t have an election. It doesn’t have an Olympics. Every station GM needs to worry about how they’re going to make their goals every month, every quarter. Is direct response going to be more important because of that?
Well, definitely. When you don’t have these other factors that help sell out inventory and tighten inventory, it’s always important for general managers and GSMs to look at how best to package inventory to make maximum revenue for their station or network. And so, we work very closely with our media clients to work strategically on is there a unique spot packages that we can offer the marketplace if we’re selling paid programing, we work with them closely to look at what inventory they have available, to see how we can put things together to again, work on just maximizing revenue for them and being good strategic partners for them.
How does a GM need to be thinking about DR strategically going into next year? What are the steps that they need to be taking?
Well, I think they have to first look at what their brand business looks like. You know, obviously that is going to be driving their decisions. And then when they look at kind of what opportunities they could create for direct response, whether there’s some sponsorships, opportunities, product integration, if there’s ways to put together cross platform packages, direct response clients are very similar to brands.
They like to be strategic. They like to see how they can touch consumers and maximize their ability to, you know, be in front of consumers and help motivate them to make right and smart purchasing decisions for their products.
This is a very different kind of advertising than regular spot. But some of these DR categories have a history of fueling emerging categories. I’m thinking lawyers here for one, which has become extremely important category is autos had a few rough years. What else has been fertile ground in that sense?
I would say, you know, a very strong category is the health care categories. You know, every year that is always a great question, fourth quarter. And really pay premium rates. They’re very strong advertisers with a lot of budgets to spend as they go into the end of the year. And so that’s usually a strategic category for us that we start working on midyear to make sure that we’re capturing dollars for clients and putting together relevant packages for the advertisers so that they are reaching their goals, touching the consumers that are important to them.
How much of your media buying now goes into OTT advertising?
We do a nice piece of business on the OTT side and all digital platforms. It’s still a smaller piece of our overall business. A lot of our advertisers are still really heavy into the linear television and traditional media opportunities, but there is a huge amount of money that does get channeled into the digital marketplace. And, you know, it really just depends on each advertiser and what their goals are and what kind of budgets that they have will dictate where we drive these advertisers into, what areas of business that make the most sense for them.
Are the DR advertisers starting to get more savvy about streaming and what it means and how much audience is there, or do they need some walking through?
I would say a majority are very savvy. When you think about their back end, you know it’s all about ROI. And really when the digital marketplace started to emerge, it was a perfect environment for our direct response clients because they’ve always bought based on return on investment, and they get very granular with how they touch their consumers, what kind of return they got from those consumers, and was the media effective for them.
And so, you know, digital is a great environment for our advertisers. They get involved not only with search, but with streaming opportunities, with OTT opportunities, and they evaluate it similarly to the linear marketplace. You know, did they get the return on investment? Was it a relevant audience that they reached? And can they grow their consumer base so that they can, you know, reach their strategic goals?
Is YouTube, which I mentioned at the top, something that they’re interested in?
Oh, yeah. I mean, any app that has significant audience that they can get their message in front of a certain demographic is going to be relevant for them and very meaningful. And obviously, you know, it’s from a social perspective, it’s a very strong way to reach consumers and to target the types of people that you’re looking for. So, they are very, very interested in those kinds of opportunities.
And within the advertising that you are dealing with, how much of that is national versus local?
Most of that is national. They’re direct response. It’s important for them to reach a large volume of people that that helps them get their best return. And, you know, they are just like brand advertisers. Efficiency is important to them. So, if there is a way to get a national platform and target the demo that they’re looking for, with all the qualitative information that’s important to them, obviously that’s going to be a meaningful opportunity for them. So national is very key.
Would you happen to know how it breaks down on FAST channels versus AVOD?
I don’t know the stat for that, and I wouldn’t want to just guess just because I’m not 100% sure on that.
Streaming advertising obviously is becoming more popular. Is that making it too pricey for some DR advertisers?
Right now, there’s still a lot of opportunities out there for them, you know, and they’re going to look at it on a case-by-case basis. If they can reach a certain CPM that makes sense for their advertisers, then that’s going to be something that they’re going to, you know, open their eyes to and see if it’s a good opportunity for their clients.
Does WorldLink buy programmatic spots for its DR advertisers?
We do represent programmatic, and we also do direct deals on the on the digital side. So, we’re involved in both areas, probably more on the direct side than programmatic, but we do work with both.
On the programmatic side, does this appear on digital platforms like YouTube or cable networks, local stations? Where does it play out?
Well, we do it across the board. We have digital clients that we have deals with where we put together streaming packages similar to our linear packages, where it might be a news opportunity, a woman-targeted opportunity, sports opportunity. So, we’ll look at the various clients that we have relationships with to put together packages with their existing inventory. And then we also have our linear stations and our networks where if they have an opportunity on a digital level, then we’ll work with them in conjunction with our linear relationship to see if we can put cross-platform packages together for them.
Now, I understand you’ve built an automated trading platform. Is that to make it easier for DR buyers and sellers to transact, or how does that work?
Well, it’s not necessarily automated trading platform. We’ve really worked hard over the years to automate our process, but at the same time still have a human component because we feel that it’s important to have an automated back room, but we want to have that human touch on the front end because clients still want to be able to talk to people.
They still want to have the feeling that they know that they’re being heard, that we’re putting together relevant packages that make sense for their advertisers and that we’re there for them 24/7. So, we have a great backroom system. We have a customized computer database that we created from scratch that really houses all the information for all the media buys that we do with all our various clients. And it’s a great tool for our salespeople, for our sales managers. It delivers great analytics for us, and it actually helps us to manage inventory for a lot of our stations and our networks and our digital clients where maybe they don’t have the capability to do it.
We can also offer opportunities for them where we can really show them what inventory is being utilized for direct response, what the rates look like, what their trends are, you know, how agencies are fluctuating in their media buying. So, we really have a great system that can work with our media clients so that they can be smart about the business and really understand where is the best place to place threat response clients.
Speaking of trends, I mean, we don’t check in with the DR world too much. What’s going on? What are the prevailing trends right now in in this space?
Well, I think right now, you know, everyone is recovering, working through kind of the issues that we had surrounding products being stalled in terms of development because of various reasons. But they’re really coming back with a strong vengeance. I think they’re hopeful for 2023. And I think right now there are a lot of great opportunities for direct response clients because there’s a lot of inventory out there in the marketplace.
And so, they are very robust, very active. At the same time, you know, it’s a tough marketplace with the economy. They’re looking at where are opportunities, where can we have the most efficiency for our clients so that they can maximize the budgets that they do have to make sure that they’re converting them for their advertisers to get more and more consumers buying their products. So, it’s really kind of a mix of how to manage the economy with where it’s at and also where are the hidden opportunities and how do I work best to maximize the budgets that I have?
And I know you’ve got the 30-second spot or the 30-minute one, right? Are they leaning toward one or the other? Is there a trend there?
We’re noticing that the strongest category that has really performed well this year, even with the tumultuous environment, is really just the paid programing has done well because there’s finite… and it’s kind of a smaller group of advertisers and agencies that buy this type of inventory, but it’s specialists and they have really been able to buy across all platforms. They’ve had great success.
And, you know, it’s probably one of the stronger categories that have sustained through this year. So, half hours are strong. They’re still there. They’re always looking for new opportunities. And, you know, workplace in half-hour paid programing, we’re doing ministries, we’re doing in half hours where if it’s, you know, a sports client that’s looking for a sports environment. It’s really evolving pretty well. And hopefully we see positive growth in 2023 for the programing space.
And you mentioned ministries and sports. Are there any other categories of advertiser that really lean into those 30 minutes?
Yeah, health care is another strong category. They have robust budgets for fourth quarter. And, you know, they just find that sometimes having that half hour is a great way to educate the consumer. They can have a little more information before they make a purchase. So, there are many clients that find that having that longer kind of half hour to really educate consumers can be very valuable for them because it really does give them more information so that someone can make an informed business decision if they’re going to purchase.
Interesting to know. Well, Toni Knight, thanks for talking with me today and allowing us to check in on the world of direct response advertising.
Well, thank you for having me. Really appreciate it.
Thanks to all of you for watching and listening. You can find past episodes of Talking TV at TVNewsCheck.com and on our YouTube page. And there are so many of those past episodes now, so see you next time.