Media Fragmentation Sparking Innovation in Canadian DRTV

By Thought Leaders Archives
Cover image for  article: Media Fragmentation Sparking Innovation in Canadian DRTV

Despite some major challenges posed by shrinking media inventory in Canada and a relatively slow uptake on some of the technological advances (such as programmatic selling and addressable TV) gaining traction in the U.S., direct response advertising remains an extremely effective and popular method for many marketers in Canada to connect with target audiences.  Why?  The answer is simple:  As the television market tightens, fresh ideas and opportunities are emerging as a result, sparking a new era of innovation and creativity in the Canadian DRTV space.

As TV viewing audiences continue to fragment across the digital media landscape, the availability of remnant TV media inventory for direct response advertisers in Canada has been declining because "make-goods" and bonus spots become increasingly necessary for the networks to true up their annual CPM guarantees for brand advertisers.  Of course, it's completely understandable that the Canadian networks would be going out of their way to try to keep major national brand advertisers and their agencies happy, but it leaves direct response advertisers with less access to remnant inventory.

This is where the proverbial silver lining in the Canadian media inventory cloud lies for DR advertisers, because it forces them to be more creative and look for other media sources to reach mass audiences.

Digital media -- the very force stealing audience from the networks and specialty channels -- is proving that it can offer deeper targeting options to reach even the most niche of audiences.  However, while digital display and video options are generally still too costly for many traditional DRTV marketers, there are some new digital-based doors of opportunity opening for traditional direct response marketers.

For instance, Spotify, the music streaming service that has taken the world by storm, with more than 140 million people now subscribing, is drawing a lot of attention from DR advertisers in Canada.  While the number of Canadian Spotify subscribers isn't publicly available, the company has said that Canada is one of its fastest growing markets and that it is actively working with Canadian advertisers and agencies to build out its own advertising revenue model.  Canadians are generally known to be quite tech-savvy and are avid adopters and users of digital media and devices, so reaching them through alternative channels like Spotify can potentially be extremely fruitful for direct response marketers.

Ad attribution with TV advertising has always been an inexact science, but digital integration is really helping direct response advertisers tie a more direct and certain line between the ads that they run and the products they sell through all their channels, not just online.  Consider:  While Amazon's ad attribution efforts are obviously not specific to Canada, many direct response advertisers in Canada are making a major push to build a digital ad attribution model into their sales and marketing plans.

Another potential alternative to traditional network TV offerings is addressable TV.  Addressable technology is extremely promising to both brand and direct response advertisers because it allows for much better targeting over mass, broadband dissemination, offering many similar advantages as digital online advertising.

Unfortunately, the apparatus has yet to take firm hold within the Canadian media industry.  However, our prediction is that one of the three major TV service providers in Canada -- Bell Media, Rogers or Corus -- will launch an option for addressable TV in the foreseeable future.

When it does begin to catch on, the advanced technology and detailed targeting advantage addressable TV offers could put advertising rates out of reach to many traditional direct response marketers.  But, the lines of distinction between brand and direct response marketers are getting fuzzier all the time, so some aspect of direct response is bound to be there, even at the earliest stages.

Another technological media advancement that has been slow to take hold in Canada is programmatic TV buying.  While programmatic has helped drive down ad rates in the U.S. media market, it simply is not there yet in Canada as broadcasters seem to be hesitant and/or unable to collectively move in that direction.

However, the Corus network is currently experimenting with a programmatic offering and has suggested that Canadian media buyers could have a demand side platform to use before the end of this year.  If it works, it's reasonable to expect programmatic TV offerings in Canada to spread and grow among the other networks, led by Bell Media and Rogers.

While there are some major challenges to direct response advertising in Canada, the economy remains healthy, advertisers have budget to spend and they are actively looking for effective ways to attract new customers.  In this environment, creativity, flexibility and decisiveness will go a long way toward overcoming the challenges posed by media fragmentation and digitalization, paving the way to sustainable direct response advertising opportunities that offer wide audience reach at an efficient cost.

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