Back to the New Media Future1 Oct, 2008 By: Response Contributor Response
From branders' discovery of DRTV to digital domination, taking a glance back at the media landscape will help those gearing up for 2009.
According to his case study, Salton and the George Foreman Grill did hundreds of millions in DRTV sales, and at one point valued its stock at more than $60 per share, but with a lack of long-term branding strategy, stock fizzled to less than $2 and Salton merged with Applica in 2007.
A similar scenario unfolded with the Sharper Image. In the early stages, long- and short-form DRTV for the Ionic Breeze air purifier and other tech gadgets built the Sharper Image brand and spurred additional catalog sales. Garnett explains, however, that the company re-focused its efforts solely on the Ionic Breeze, which spiked DRTV sales, but unfortunately curtailed Sharper Image's brand value.
When Demand acquired the Cracked brand and cracked.com in 2007, it applied its social media strategy and quickly turned it into a site with more than 30 million monthly page views.
In February 2008, Sharper Image Chief Financial Officer Rebecca L. Roedell filed for bankruptcy, reporting declining sales since 2004 and recorded net losses in fiscal 2005 to 2007, continuing into 2008.
RotoZip Tools' infomercials generated short-term sales and moved the product into retail quickly, but after a few years on the shelf, it was sold to Bosch. Garnett would have recommended reducing media to extend the life of the product line and increase advertising to create a RotoZip brand rather than selling a high quantity of tools.
Equally adamant about brand building is Jurie Pieterse, director of advertising at ING Direct, and subject of a case study feature in Response's September issue. He helped build an $80 billion online consumer banking institution using his "80-20 rule." The majority of marketing budget is spent on classic DR activities, such as direct mail, free standing inserts (FSIs) and online advertising, while 20 percent goes to branding. Pieterse said that his small investment yields a 40-percent boost in response rates.
In 2005, a popular DVR product called TiVo, reported its first profitable quarter while consumers feverishly skipped commercials and recorded live programming. Traditional advertisers, particularly those with lofty primetime media buys, quickly searched for answers in "new media."
By August 2008, the U.S. Court of Appeals overturned a decision that had previously blocked Cablevision from creating a system-wide DVR product. Now, cable subscribers will be able to record shows with a click of their remote rather than buying a separate set-top box. Some advertisers have argued that a new system should be put in place where they would only pay for the number of viewers who see their commercial — a pay-for-performance model.
Since DRTV is aired on remnant space, the prospect is less alarming. However, it poses new opportunities for long-form, opt-in advertising.
Tim Hawthorne, founder, chairman and executive creative director of Hawthorne Direct and a member of Response's Editorial Advisory Board, says that the most exciting news for the industry this year was Comcast's and other cable MSO's (including Time Warner and Cablevision) growing promotion of video-on-demand (VOD) and gradual introduction of interactive advertising technology.
"VOD will be a major repository of long-form DRTV and 'press-your-remote-to-order' interactive technology will make ordering product from short form, long form or live TV home shopping quick and easy," Hawthorne adds. "Acceptance and distribution of these technologies have been the DR marketers' holy grail that have been a long time coming."