TV Needs Direct Mail 2.0 And NextGen TV Will Help
I would like to take this opportunity to deny the outrageous rumor that I was present with Marconi when he invented radio. That would have been impossible, since I was only a small child at the time.
What is true is that during Marconi’s era, when print publications reigned supreme, direct mail was already a leading form of local advertising. The internet of those days was the Post Office. The most popular browser was the Sears catalog, which also served as the Amazon of its day.
Because of its dependency on “snail mail,” we think of direct mail as ancient, sort of like the pyramids, never giving it a second thought. And yet, in BIA Advisory Service’s just released 2022 forecast, direct mail is listed as the second largest form of local advertising, behind mobile and ahead of desktop computers, television, and radio.
Those who follow these things realize BIA’s forecast is significant because for the first time in memory, direct mail is not in first place.
BIA estimates that direct mail will account for $33.4 billion in local advertising revenue next year. This compares to $21 billion for local television. Think about those numbers for a minute. The direct mail number is 50% larger than the television number. This is not a new phenomenon.
Since it is always harder to generate new advertising dollars than to move existing ones, you may be asking why television stations do not have a strategy for targeting direct mail? There have been. Multiple strategies have been tried over multiple decades, the best with only limited success.
The problem is the core difference between the two media. Television is a form of mass media, while direct mail is a highly targeted media. Past experiments by television stations have come down to taking a user role rather than an innovator one. They have failed because trying to beat a competitor at their own game rarely works.
By now you are probably thinking the same thing I am. What about NextGen TV, which is all about addressability? We’ve all seen presentations on ATSC 3.0’s potential, which reeks of opportunity. We are still in the early adopter phase, so it is too soon to fully understand NextGen TV’s revenue potential, but it is not too early to think ahead, as I am sure some groups are already doing.
With that in mind, here is a specific question that seems timely to ask: What is the plan for converting a significant portion of the more than $30 billion spent annually on direct mail to NextGen TV? How will it work? Why would advertisers want to use it? What must we do to prepare for it?
It seems to me that it would be beneficial to create an industry task force right now to take advantage of this specific opportunity. Industry synchronization will be essential since advertisers and their agencies will want to buy multiple stations. Rather than lumped in with local, this could be an entirely new revenue line to be launched by market rather than by individual groups.
Finally, think about this: direct mail is a flat, static medium delivered at a snail’s pace. Mobile has taken some dollars away, but the core business still exists only because no one has had a better idea. Perhaps now is the time for that idea. It will certainly worth the effort to find out.
Television has a long history of adapting to new opportunities. NextGen TV will offer a world of those opportunities beyond anything we have seen in the past. As I was saying to David Sarnoff back when he was inventing television: “Keep at it and there might be something to this TV business.”
Hank Price is a media consultant and leadership coach. He is the author of Leading Local Television, a guide to leadership for television general managers, as well as those who aspire to top leadership. Price spent 30 years managing TV stations for Hearst, CBS and Gannett, including WBBM Chicago and KARE Minneapolis, as well as three other stations. Earlier, he was a consultant for Frank N. Magid Associates. Price also served as senior director of Northwestern University’s Media Management Center and is currently director of leadership development for the School of Journalism and New Media at Ole Miss. He is the author of two other books.