‘The future of CTV is direct mail’: How Lockard & Wechsler Direct navigates clients through a tight TV marketplace

By Michael Bürgi

Given the insanity of the recent television upfront marketplace this past spring, in which networks secured gigantic price increases (but didn’t increase their total revenue much due to cratering impressions and limited inventory), many marketers had trouble getting their money placed to secure ad time.

Performance marketers especially struggled, given they are usually looking for the lowest-cost pricing that still delivers maximum response for their clients, mostly direct-to-consumer advertisers.

Lockard & Wechsler Direct, a 30-year-old agency that specializes in buying and planing performance marketing campaigns for clients including Burlington stores and Tommy Bahama, is one of several shops trying to pick their way through a more complicated TV marketplace. Digiday spoke with Dick Wechsler, founder and CEO, as well as Ben Speight, executive vp of client services, who explained the opportunities and challenges.

The following interview was edited for clarity and space.

You’re expanding into the connected TV space. What’s your approach? And are you attracting new clients from it?

Speight: Efficiency is everything relative to DTC advertising — you have to get your targeting right, but you also have to get your pricing right too. In the linear TV environment, it’s a lot easier. We’ve been trying to leverage the hundreds of millions [of dollars] we spend there, and move it over to the OTT side to secure better pricing. There’s not a significant amount of ad inventory there. If you’re talking $15-20 CPMs, that’s good, but when you’re talking $50-60 CPMs, that has a major outcome on your campaign.

The tracking is what we’re really trying to crack. Everyone has some sort of deterministic model. In our world, we have clients who sell real products. They want tangible transactions, tangible ROI. In the world of privacy, it becomes hard — you can’t do transaction level [data]. We still are able to because we use IP addresses, which isn’t in the third-party world yet. We’re still able to make meaningful identification on transactions for our clients. It’s a big differentiator.

We just came out of a bonkers upfront marketplace. Did you get caught in a squeeze?

Wechsler: We’re pitched in a battle, a tug of war with the broadcasters/programmers. Their model is driven by available impressions; that’s how they commoditize their world. And when impressions contract, they either have to push pricing or face a reduction in revenue. Or they add minutes to the experience, which drives viewers away and is a real death spiral. It’s a real challenge.

But when they stream, they reduce the ad load. Obviously someone there is saying consumers don’t want that experience. As a result, there are fewer impressions and they charge a premium for it. The premium may not look extraordinary if you are Ford where you’re already paying a huge CPM in linear. But if you’re a performance marketer, the levels you have to pay in streaming, you go in saying I don’t see how this is going to work — because you’re paying 3, 4, 5 times as much. And the response …read more

Source:: Digiday