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July 31, 2007

Another Un-Tapped Category in Direct Response Radio

Here's another "tip" for those who want to know about open, untapped opportunities in direct response radio.

According to this article,

"Americans now spend $41 billion a year on their pets -- more than the gross domestic product of all but 64 countries in the world.

That's double the amount shelled out on pets a decade ago, with annual spending expected to hit $52 billion in the next two years, according to Packaged Facts, a consumer research company based in Rockville, Md."

When was the last time you heard a radio ad for a pet-related product? Our research shows that this category is wide open.

Now, put on your marketing hat, consider these other tidbits presented in the article, and ask yourself: is this not a recipe for incredible opportunity in direct response radio?

- About 63% of U.S. households, or 71 million homes, now own at least one pet, up from 64 million just five years ago. (It's a BIG opportunity.)

- After consumer electronics, pet care is the fastest-growing category in retail, expanding about 6% a year. (It's a fast growing opportunity)

- The yearly cost of buying, feeding, and caring for pets is in excess of what Americans spend on the movies ($10.8 billion), playing video games ($11.6 billion), and listening to recorded music ($10.6 billion) combined. (Think large "share of wallet")

- More new pet products were launched in the first six months of last year than in all of 2005. (Demand will increase as more choices are offered)

- Overall, sales of pet health products have grown at a compound annual growth rate of 8.8% in recent years, more than double the rate in the late 1990s. (A CAGR of 8.8 for all distribution channels -- that's very strong growth)

- Much of the attention is going to the growing problem of pet obesity. As many as 40% of dogs are estimated to be overweight or obese, with similarly high rates among cats, thanks to the indulgent habits of their owners. That's creating a market for new products like Pfizer Inc.'s dog-obesity drug Slentrol, which will cost $1 to $2 a day. Reconcile, a new drug from Eli Lilly & Co. for "canine separation anxiety," is based on the active ingredients in Prozac. (People are crazy about their pets and they'll do anything for them ... price insensitivity that adds up to high margins.)

- And from the moment Eric Olander paid $500 for a plane ticket to get a stray chow chow mix from Atlanta to his home in Los Angeles, the dog has been a focal point of his life. "I call him my 401(k) with paws," he says, "because that's where all my money goes." (I'd rather pamper a pet than live comfortably in my old age ... again, price insensitivity that equals high margins.)

Posted by Jeff Small & Brett Astor at 10:30 AM | Permalink