DirecTV notched a 9.7% increase in sales last quarter to reel in $5.47 billion for the period. Despite the still-sour economy, Americans like their television and generally don't mind paying for it. With 18.4 million subscribers, satellite TV provider DirecTV is the nation's second-largest provider of multichannel video behind Comcast.
Ad sales make up a small portion of DirecTV's annual revenue, but in terms of growth, what's there is primo. And that brings a smile to the face of Bob Riordan, who, as senior VP of ad sales, spearheads the company's advertising division. Since joining in 2004, he's presided over a 300% increase in revenue (the company declined to provide a precise number). The challenge is to get marketers to buy channels through DirecTV rather than each channel's sales team, and this interactivity is Riordan's silver bullet.
“I feel very fortunate to be associated with this type of technology late in my career,” says Riordan, who has helped engineer interactive campaigns on behalf of Procter & Gamble, DaimlerChrysler and Bank of America. “We're developing new capabilities such as sampling, doing polling, voting. We can add in ZIP codes, store locators and e-mail capture.”
DirecTV plans to start delivering coupons in mid-2010. Transactional media, which will have DirecTV customers ordering goods via their set-top boxes, is about another year away, Riordan adds. Addressable advertising is expected to launch in the first quarter of 2011. “We're fully invested in this project. It's our access point to the local marketplace,” Riordan says.
While DirecTV can scoop up local ad dollars, the company points out that it operates nationally and has a presence in 210 DMAs. Riordan has also helped build a business via measurement company TNS, which uses DirecTV set-top-box information from more than 100,000 households to produce DirectView, up-to-the-second ratings of both TV shows and commercials.
Riordan's team represents scores of TV channels that give up two minutes an hour of national airtime for DirecTV to sell. That also means his team is a destination for marketers looking to buy time around NBC Universal's Olympics or NFL Sunday Ticket. DirecTV has already signed up Lexus, Carfax, Edward Jones and Geico for Olympics coverage. “We're two-thirds sold out,” Riordan points out, adding that pacing is ahead of the 2006 Games.
Eric Shanks, executive VP of entertainment for DirecTV, calls Riordan “an amazing force in the business. He's at the forefront of transforming TV advertising and has built a good staff to handle these new challenges.”
While DirecTV's subscription business seems to have weathered the recession, the firm's advertising sales suffered the same difficult 2009 as everyone else. But Riordan believes that “there is a solid rebound going on. We're very encouraged; there's more money coming into the marketplace.”
Interactivity has driven a lot of business, and DirecTV has done several deals with digital specialist agency Media Storm. “We have a deep belief in the power of the DBS platform,” observes Craig Woerz, Media Storm's co-founder. “They are highly qualified, and every agency should look at them very hard when they're considering local or national buys.
“Their big play is dynamic ad insertion,” Woerz adds. This gives marketers the ability to switch out creative on short notice. DirecTV sells around 30% of its inventory in the upfront and the rest in scatter, according to Riordan. That leaves a lot more inventory to sell year-round than other channels.
Given DirecTV's bent toward sports, it's no surprise that Riordan describes himself as a big sports fan. “I like to play golf and I'm still a Patriots season-ticket holder,” admits the Boston native. He worked his way up in sales through stations in Boston and New York, and then joined a syndication company before going to the agency side in a buying role. In 2004, he joined DirecTV and began pioneering new forms of advertising.
As Shanks jokes: “He's actually found a way to broadcast only Red Sox commercials into homes of Yankee fans.”