2. Purpose
• Analyze a number of Direct-to-Consumer advertisers to garner
additional learning
– Important to recognize category development stages
• Methodology
– All spending reported by TNS for the periods of January 1995 –
June 2008
– Caveats
• Quantitative data to be used directionally
2
3. 1995-2008 (YTD) Competitive Analysis
• Executive Summary
• Spending by Company
– Gateway
– Dell
– Direct TV
– DISH
– E Trade
– Jenny Craig
– Nutri-System
– Select Comfort
3
4. Executive Summary
Key Implications
• Overall the Brands built their business using various approaches
− Utilized multiple forms of media to determine the best strategy
• Pressure levels seem to be driven by category and are relatively
high
• TV approach varies among the Brands
− TRP levels and the use of long form :60s/:120s seem to be
category driven
4
7. Category Findings
Dell and Gateway
• Dell and Gateway initially concentrated their advertising efforts in
Magazines and later expanded their advertising efforts to a multi-media mix
approach in addition to increasing TV weight levels
• Dell utilized a mix of :30s/:60s while Gateway favored :30s
7
8. Key Brand Findings
Gateway
• Gateway’s earlier media strategy was highly concentrated in Print.
Investment in TV was minimal when compared to Magazines at $28.2MM in
’95
• Between 99-02 Gateway increased their advertising efforts by utilizing a
multi-media approach (TV, Print, Radio, OOH and Online) in support the
“People Rule” campaign, the introduction of the Gateway Plasma TV and
lower PC prices
• Although :30 units were primarily used to carry Gateway’s message they
also utilized a sparse mix of :10, :15, and :60 spots
− 94% :30s
− 4% :60s
− 2% :15s
• YTD ‘08: Gateway decreased their advertising efforts significantly from
previous years with Magazines accounting for 100% of total media spending
8
9. Gateway Historical Insights
1995 1996 1997 1998 1999
$31.4MM $42.8MM $82.3MM (+92%) $167.2MM (+103%) $253.7MM (+51%)
• Primarily magazines, • Magazines continue • Majority of $ • Media mix similar to • Added Newspapers
Network TV to be the dominate Magazines, Network the previous year (26% SO$)
• Minimal investments in media TV • Network TV up +89% • Increased TV
Cable, Spot TV and • Increased Cable, • Significantly increased • Added B-to-B which spending
Nat’l Newspapers Network TV and Nat’l Cable and Nat’l received the 3rd • Spot TV up 47%
Newspapers spending Newspapers highest allocation of • 80% U.S.
• Added Spot Radio investment dollars
• Added OOH
2000 2001 2002 2003 2004
$314.3MM (+23%) $243.3MM (-23%) $219.2MM (-10%) $201.8MM (-8%) $111.1MM (-55%)
• Media mix remains • Network TV down 34% • Newspapers spending • Reduced Network TV • Network TV down 90%
consistent • Added Online down 75% budget by 55% • B-to-B down 73%
• Spot TV down 73% • Significantly increased • Network TV remained • Increased Cable TV • Magazines down 95%
from YA SLN TV flat and Magazine spend • Newspapers and
• Shifted dollars into Syndication saw slight
Network TV (+80%) increases
9
10. Gateway Historical Insights (continued)
2005 2006 2007 Jan-June 2008
$53.5MM (-52%) $32.9MM (-39%) $13.4MM (-59%) $.1MM (-93%)
• Reduced Cable TV • Eliminated • Media mix consisted • Magazines account
budget by 50% Newspapers from the of only B-to-B, for 100% of total
• Internet decreased Media strategy Magazines and advertising spend
significantly (-74%) • Significant reductions Internet
in Magazine and SYN • Internet accounted
TV spending for 76% of total
spending
10
15. Key Brand Findings
Dell
• Dell’s initial media strategy was grounded primarily in Print (Magazines/Nat’l
Newspapers)
• In 1998 Dell moved to a multi-media approach which included Network TV,
Cable , Syndication, B-to-B, Local Print, Internet, OOH and Network Radio
with Print continuing to receive the highest allocation of ad dollars
• Cable TV replaced magazines as the lead media vehicle in 2003 thru 2006
− 9,200-12,600 TRPs
58% :30s
34% :60s
8% :15s
• :60s/:30s were utilized earlier between ’96-2004. In 2004 Dell began funneling
:15s into their unit mix and by ’08 :60s vanished
15
16. Dell Historical Insights
1995 1996 1997 1998 1999
$15.5MM $21.8MM $55.8MM (+155%) $135.9MM (+143%) $193.1MM (+42%)
• Magazines • Shifted focus to Nat’l • Increased Spot TV • Magazines received • Significantly increased
accounted for nearly Newspapers (86% spend by $11.9MM the highest allocation Cable, Nat’l
100% of total media SO$) • Magazines and Nat’l of dollars Newspapers, and
spend • Added Nat’l Spot Spot radio also saw • Added B-to-B, Cable, Network TV
Radio and Spot TV to increases Network, Spot and investment
the media mix • Added OOH SYN • Added Newspapers
2000 2001 2002 2003 2004
$245.9MM (+22%) $298.4MM (+21%) $441.5MM (+48%) $495.5MM (+12%) $624.9MM (+26%)
• Reduced Cable (- • Magazines continue • Cable TV spending is • Cable replaced • Reduced Network TV
22%) to be the lead up +254% Magazines spending
• Increased B-to-B, medium • Local print spending • Up 23% vs. YA • Shifted focus to
Magazines, Nat’l • Introduce Online to increased +195% • Network TV and SYN Online , Magazines
Newspapers, Network the media mix • Network TV, Nat’l decreased slightly and local print
TV and Newspaper $ • Increases can be Newspapers and Spot • Internet spending
seen in Cable, Spot TV also saw slight +50%
and SYN while B-to-B, increases
Network TV and
Newspapers saw
decreases
16
17. Dell Historical Insights (continued)
2005 2006 2007 Jan-June 2008
$773.7MM (+24%) $730.0MM (-6%) $542.0MM (-26%) $183.7MM (-67%)
• Media mix remains • Newspaper spending • Cable TV spending is • Significant decreases
constant cut by 36% down -68% seen throughout
• Reduced Cable, Nat’l • Spot TV: 85% U.S. • Network TV, SYN, and • Spot TV: 43% U.S.
Spot Radio and Spot • Magazines, B-to-B Internet spending
TV spending and Spot TV saw decreased
• Spot TV: 70% U.S. slight decreases
17
23. Category Findings
Direct TV and Dish
• Both Advertisers used a multi-media mix approach in the early stages to
reach consumers
• Direct TV favored TV which received the highest allocation of media dollars
followed by Magazines
− Primarily :30 units in Network TV
• DISH’s initial media strategy was grounded primarily in National Print
• In 2001DISH shifted their media focus to a more localized approach by
funneling more dollars into Spot TV, Radio and Local Newspapers
• Later DISH increased TV spending with Cable receiving the highest
allocation
23
24. Key Brand Findings
Direct TV
• Direct TV utilized a multi-media approach media mix of TV, Magazines, B-to-B,
Nat’l/Local Print, Spot Radio in the earlier stages of their marketing efforts and
later introduced Internet and OOH to the mix
• Direct TV invested heavily in TV and Magazines with Network TV receiving the
highest allocation of media dollars YOY except for ‘03
− Cable received the 2nd highest allocation followed by Magazines
• Although :30s were most commonly used throughout the reported time
period Direct TV also utilized a unit mix of :15s, :45s and :60s
− :60s were used in ’95 and ‘99 at lower levels
− In 2001 Direct TV started using :60s to a larger degree
• 808 TRPs in ’01 vs. 41 TRPs the previous year
− :15s were introduced as part of the unit mix in 2006 and concentrated
primarily in Cable and Network TV (65% Cable/36% Network)
24
25. Direct TV Historical Insights
1995 1996 1997 1998 1999
$43.3MM $68.7MM (+59%) $51.7MM (-25%) $81.1MM (+57%) $93.6MM (+15%)
• Media Mix consist of • Media mix is • Decreases seen • Significantly increased • Network TV and
Cable TV, Magazines, consistent with throughout TV and Magazine Syndication is down
Nat’l Newspapers, previous year • Highest % reduction in spending • Added Newspapers
Radio, Spot TV and • Significantly increased Nat’l Spot Radio • Added B-to-B
Syndication Magazine spend
• Spot TV: 79% U.S. (+81%)
2000 2001 2002 2003 2004
$122.1MM (+30%) $147.3MM (+21%) $156.4MM (+6%) $160.0MM (+2%) $210.7MM (+32%)
• Increased Nat’l Spot • Increased Cable, • Spot TV down (-72%) • Reduced Cable, • Increased Syndication
Radio spend Spot TV and • 79% U.S. Network and SLN TV spending
significantly Newspapers spending
• Added Network Radio • Spot TV: 81% U.S. • Shifted dollars into
and SLN TV • Eliminated Network Magazines and Spot
Radio TV
• Added Internet to the
media mix
25
26. Direct TV Historical Insights (continued)
2005 2006 2007 Jan-June 2008
$239.0MM (+13%) $255.2MM (+7%) $269.7MM (+6%) $170.5MM (-37%)
• Network TV spending • Network TV remains • Network, Cable and • Significantly reduced
is up 64% dominant Newspaper spending Cable and Network
• Cable TV remained up TV Spending
flat
26
27. Direct TV
:10 :15 :30 :45 :60
12,000 11,116
10,238 10,002
10,000
8,000
6,963
Total TV TRPs*
6,566 6,640
5,862 5,709
6,000
3,488
4,000
3,227 3,103
2,827
2,193 1,894
2,000
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Total Media
$(MM) $43.3 $68.7 $51.7 $81.1 $93.6 $122.1 $147.3 $156.4 $160.0 $210.7 $239.0 $255.2 $269.7 $170.5
(YTD**)
*Spot TV TRPs nationalized
**January-June 2008
31. Key Brand Findings
DISH
• DISH utilized a Media mix of TV, Local/Nat’l Print, Radio OOH and Online
• Spot TV was seen throughout whereas Cable TV, Network and Syndication
was absent for a few years
− Minimum TRPs: 18 in ’99
− Maximum TRPs: 5,287 in ‘08
• :30s were utilized earlier on then DISH began using a variety of unit lengths
including :120s
− Dish used 100% :60s in 97 and ’99 and then they were absent from the TV
strategy until 2003
31
32. DISH Historical Insights
1996 1997 1998 1999 2000
$17.6MM $28.6MM (+63%) $17.2MM (-40%) $29.7MM (+73%) $89.7MM (+202%)
• Media mix consist • Magazines received • Eliminated Cable and • Media Mix similar to • Significantly increased
primarily of Cable, the highest allocation Network TV previous year with the Newspaper and Nat’l
Network and Spot TV, of $ addition of Spot Radio and Spot
Magazines , Nat’l • Highest % increase in Newspapers TV investment
Newspapers and Nat’l Spot TV • Spot TV: 61% U.S.
Spot Radio • Spot TV: 47% U.S. • Added Network Radio
to the media mix
2001 2002 2003 2004 2005
$57.3MM (-36%) $43.9MM (-22%) $102.7MM (+134%) $75.8MM (-26%) $115.6MM (+52%)
• Hispanic Newspapers • Magazines • Newspapers receives • Increased Syndication • Significant increases
and Nat’l Spot Radio decreased the highest allocation • Reduced Spot TV in Cable, Magazines
increased slightly significantly from YA of dollars(+89%) activity and Nat’l Spot Radio
• Highest % reduction in • Spot TV increased by • Added Cable TV
Magazines $17.5MM
32
33. DISH Historical Insights (continued)
2006 2007 Jan-June 2008
$162.1MM (+40%) $169.1MM (+4%) $106.2MM (-37%)
• Syndication up 143% • Highest % increase in • Cable TV is the only %
Newspapers increase
• Syndication was • Added Syndication
absent from the
media mix
33
34. DISH
:10 :15 :30 :60 Other
6000
5,287
5000
4,280
4000
Total TV TRPs*
3,240
3000
2,516
2000
1,715 1,636
1000 770
607
211 255
149
26 18
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Total Media
$17.6 $28.6 $17.2 $29.7 $89.7 $57.3 $43.9 $102.7 $75.8 $115.6 $162.1 $169.1 $106.2
$(MM)
(YTD**)
*Spot TV TRPs nationalized
**January-June 2008
***Other includes :120+ units
39. Category Findings
• E Trade’s initial media mix consisted primarily of Cable and National Print
• Added Network and Spot TV in 1997, increased TRPs and markets each year
except 2001-2003
• In ‘99 E Trade significantly increased local TV weight in some of the top
Financial DMAs such as Boston, New York, LA, San Francisco and
Washington, DC
• E Trade’s TV strategy included a unit mix of :10s, :15, :30s and :60s
− E Trade began using a unit mix of :30s/:60s in ’99 but by 2005 they
replaced :60s with :10 and :15 units
• Although Online replaced TV as the dominant media TV and print continue
to be strong secondary mediums
39
40. E Trade Historical Insights
1995 1996 1997 1998 1999
$0.8MM $5.6MM (+600%) $18.5MM (+230%) $32.8MM (+77%) $129.5 (+295%)
• 62% of $ in Cable • Print had the lions • Print remains the • 50% of $ in Print & 49% • 74% of $ in TV (28%
• Other medias: share dominant media of $ in TV U.S.)
Magazines & • +$4.9MM in Print • Cable budget • +$8.0MM Network TV • +$43.8MM in Network
Newspaper • Cable TV remained approximately the • +$5.7 in Cable TV
flat same • +$5.5MM in • +$22.4MM in Cable
• Added Network TV & Magazines • +$11.9MM in Spot TV
Spot TV • -$2.9MM in Spot TV
2000 2001 2002 2003 2004
$105.0MM (-19%) $56.3MM (-46%) $55.0MM (-2%) $46.8MM (-15%) $86.4MM (+85%)
• 43% of $ in Network TV • 35% of $ in Online (1st • 35% of $ in Online • 65% of $ in Online • 65% of $ in Online
• -$9.9MM Spot TV time on plan) • +$4.0 in Spot TV (+$10.9MM) (+$25.9MM)
• -$6.7 in Cable & • -$36.6MM in Network • -$5.4MM in • Network TV dropped • +$8.8 in Network TV
TV Newspapers • -$5.2MM in Print • +3.5MM in Cable
• -$18.0MM in Cable
• -$10.2MM in Print
40
41. E Trade Historical Insights (continued)
2005 2006 2007 Jan-June 2008
$137.8MM (+59%) $181.5MM (+32%) $270.1MM (+49%) $185.5MM (-31)
• 51% of $ in Online • 58% of $ in Online • 69% of $ in Online • 58% of $ in Online
(+$15.2MM) (+$35.3MM) (+$80.0MM) (-$78.1)
• +$20.5MM in Print • +$12.5MM in Print • +$17.3 in Network TV • 21% of $ in Network TV
• +$10.8MM in Cable • -$5.6 in Cable (+$9.8MM)
• -$12.6MM in
Magazines
41