Editorial Advisors Forum: DRTV at 25 A Look Back and Ahead1 Jan, 2011 By: Thomas Haire Response
Members of Response’s Editorial Advisory Board reminisce about the industry’s colorful history and look ahead hopefully at the next quarter-century.
The close of 2010 officially marked the end of the direct response television business’ first quarter-century. As we step into 2011, though, the challenges and opportunities for those working in DRTV and other DR marketing businesses remain just as diverse as ever.
That transition to the industry’s second quarter-century provides the Response Editorial Advisory Board with a perfect chance to look back and ahead in the first quarterly edition of the 2011 Editorial Advisors Forum.
“It’s been a wild ride. I remember such a small group of us in the early days of the infomercial business. Few of us knew then that this industry would become such a big part of our life and careers. I also didn’t imagine any of us ever dreamed it would turn out to be as lucrative as it has been,” says Richard Stacey, president and CEO of Toronto-based Northern Response Intl. Ltd.
Fern Lee, principal in New York-based Thor Associates, agrees. “It has been a pleasure and a continued passion to work and play in direct response, and I am blessed to have experienced my success,” she says.
Mike Medico, New York-based CEO of E+M Advertising, says credit for the industry’s success should be spread far and wide. “It is important to acknowledge the people and talent that have made our industry what it is today. They have raised awareness, given credibility to direct response marketing and improved the performance of products sold to consumers,” he contends.
The industry’s first 25 years had many turning points. However, Tim Hawthorne, founder, chairman and executive creative director of Fairfield, Iowa-based Hawthorne Direct, says a realization nearly two decades old is among the most important. “A significant moment in DRTV history was when we all realized in the early 1990s that our infomercials and short-form spots were also highly effective in driving product sales in other channels, such as the Web, direct mail, print and of course, retail,” he says. “In the old days, we would have our voice-over announcers say, ‘Not available in stores,’ to enhance the urgency of the offer. That all has changed to the extent that most DRTV campaigns are intentionally designed to drive online and retail sales.”
What else has changed? What’s stayed the same? Let’s listen to our Editorial Advisory Board leaders.
What was the most memorable moment during the past 25 years in the DRTV business?
Brian Fays: MTV Networks: In the early- to mid-1990s, when blue chip advertisers and Fortune 500 companies entered the DR space paying premium rates and bringing a higher level of commercial creative to the table. This transition from pure cost-per-call clients to Wall Street-type advertisers put DR on the map and we never looked back.
Doug Garnett: Atomic Direct: It’s difficult to pick out a moment from so much time. What stands out for me is the advanced use of long form by the Obama campaign. First, they ran for months on satellite with a surprising and humanizing long-form show emphasizing Obama’s background. This was capped by the national primetime broadcast of the Obama campaign infomercial. One timeslot across a set of networks drew more than 30 million viewers and, interpreting poll data, played a key role helping solidify his lead. It was both unusual and effective.
Hawthorne: Nov. 26, 1984 — the night I launched my first infomercial campaign. I sat in the basement of a local electrician’s home (the only guy I knew who owned a C-band satellite dish) so I could watch the long-gone Satellite Program Network at 11 p.m., just to be sure the “Millionaire Maker” infomercial actually ran. I had paid $3,000 for the hour (our infomercials were all one-hour long back then) and hoped for thousands of orders. Instead, we only got 100. I was sorely disappointed, until I did the math. One hundred times the $295 retail price was $30,000. A 10-to-1 (although we hadn’t invented media efficiency ratios then either)! I remember thinking: This is a potentially huge new business model. Within 18 months, we had grossed more than $60 million and launched an industry from Fairfield, Iowa.
Lee: I have been blessed to be in this business more than 25 years, and there are many memories to name. My most memorable moment would be creating my first infomercial for Vikki LaMotta’s Skincare products. We had prior success in print and direct mail, and Vikki was our first foray into DRTV. We had an overnight success, which led to hiring a room full of actors in New York to create a telemarketing room — it was a continuity boom!
Kevin Lyons: Opportunity Media: It’s tough to pinpoint a moment, but to me it was the emergence of national cable networks and the decisions of those networks like Lifetime to pursue the direct response business. National cable networks recognized, early on, the importance of this genre of advertising.
Medico: The year 1985 when commercial length restrictions were lifted and the modern-day infomercial was born would qualify. I also believe the recognition and legitimization of direct response among the general advertising community and by Fortune 1000 companies at large have created the most impact in our industry in the past 25 years.
Stacey: Our industry is so colorful and innovative, it’s difficult to pick just one memorable moment. However, seeing the growth of the DRTV business internationally and the early days of attending the first international Electronic Retailing Association (ERA) conferences was really exciting. It generated a lot of opportunities and created a lot of lifelong friendships and memories.
What have been the biggest surprises in or about the DRTV business in the past 25 years?
Fays: I never would have thought long-form clients and their overall marketplace would play a major role in how general sales and upfront negotiations go down. Working at three major organizations in my career, I am proud to say that this has always been a part of doing business.
Garnett: With the DRTV business’ reputation for cheap and gimmicky products, it’s a pleasant surprise that many long-form products are of excellent quality. Long-form products that remain on-air for longer than a year are generally exceptional. Excellent products like Ionic Breeze, Victoria Principal, Total Gym, Drill Doctor, Foreman Grill, LandRider and Kreg Jig all defy popular perception of quality for products sold on TV. A second surprise is the credibility developed by home shopping — DRTV marketers should learn a lesson here. While QVC and HSN were ridiculed 15 years ago, today they are a more respected segment of DRTV. Why? Because they chose to build credibility: offering top quality products and supporting them with superb customer service and return policies. The disappointing surprise is that too many brand and retail companies continue to consider it taboo to use DRTV. In part, this comes from the abuse of consumer trust by some of DRTV’s traditional marketers. But it also comes from brand DRTV agencies that deliver A-grade productions that mask D- or F-grade communication.
1) That it’s lasted as long as it has.
2) That products with fraudulent claims can stay on air as long as they do.
3) That brands never “got it,” and didn’t jump in to dominate DRTV media time.
4) ShamWow and Vince Offer
Lee: That our lifecycle has continued to ebb and flow. I would expect that technologically during the next five years, we’ll see our biggest spurt of growth potential. I am also still surprised that in 2010 we can predict consumer behavior but can’t unequivocally identify where a consumer comes from virginally to a URL. We are able to identify how to send a consumer to a landing page and have the metrics to distinguish the media, but we still don’t have the ability to read which TV station drives to the Web better than another TV station. As a metric-centric executive, this “not knowing” creates havoc with telemarketing, media buying, PPC and analytics for A/B testing. We call it direct response marketing because our goal is to elicit an action. I am looking forward to having the next round of metrics to drill down to read all offline/online integration.
Lyons: The amount of creativity in the presentation of direct response commercials. This, and increased production values, broadened the distribution of DRTV early on and continue to benefit the business by reaching consumers in unique ways.
Medico: The biggest surprise to me is that that were no big surprises. While online has taken on an increasing importance, that really comes as no surprise. The industry still pretty much functions in the same manner as it did 25 years ago. We still buy media based on the same criteria, we still optimize based on the same criteria. “Fitness” and “Health and Beauty” are still the top categories, the calls-to-actions are pretty much the same, infomercial time slots have not changed radically, and we are still getting pre-empted.
Stacey: It’s been surprising how fast technology has changed our business with the proliferation of TV channels and media choices, the change in how consumers interact with the TV and the rapid rise of the Internet. I remember when DRTV marketers were concerned that providing a URL and an 800 number might decrease orders by turning an impulse buy into a shopping buy. Now the Internet makes or breaks some campaigns.
What is the most successful campaign of the infomercial industry’s first 25 years and why?
Fays: Carleton Sheets and Tae Bo — in their own unique ways. Carleton Sheets set the tone for success early on, which others replicated in the following years. Tae Bo took the entire country by storm and, frankly, we have not seen another show as successful as it since … and possibly never will.
Garnett: Success is defined by your needs and the challenges you overcome. Quite often, the smaller and lesser-known campaigns have had to overcome the biggest challenges. White’s Electronics has used DRTV to drive its business, and they’ve achieved superb success. So you can’t claim a kitsch campaign like the Snuggie is “more successful” than a DRTV campaign that has spent more than a decade driving sales for $1,000 metal detectors. That said, one of my favorite top-selling successes is the Victoria Principal skincare line. Its longevity came from carefully managing Victoria’s brand and avoiding the tendency of DRTV producers to dash from idea to idea in the infomercials that follow a first success.
Hawthorne: Proactiv Solution, without a doubt. The perfect DRTV product: beauty (ego appeal) category; solves a massive common problem; amazing “magical transformations” visual; affordable; and addictive. Will there ever be a better DRTV campaign? Only when someone invents a real magic pill for losing weight.
Lee: I would be remiss not to mention Billy Blanks, Richard Simmons and The FIRM. In the past several years, kudos to P90X and the guys from Beachbody for having the right people power and modeling to take their infomercial to the top year after year. Ron Popeil’s Rotisserie — and the immortal words “Set It and Forget It” — was the perfect combination of problem solution with an unforgettable tag line. Talk about machines: We have the Thigh Master (admit it, everyone has one in their parents’ garage) and Tony Little’s Gazelle (I am still amazed I didn’t fall off the first time I tried the machine). The Power Juicer by Jack LaLanne — how long has this been on TV?
Lyons: Clearly, Proactiv Solution. This product was a game changer and has grown into an incredibly successful business for Guthy-Renker. This product, with its excellent use of celebrity talent, dashed the stigma associate with acne. This led to unparalleled success, and it all began with the infomercial. It has since grown into many levels of distribution and leads its category.
Medico: This is very hard to answer because of the different channels of distribution available today vs. 25 years ago. Today, retail and online is far more significant to the success of an infomercial campaign. That being said, Proactiv Solution has the most effective use of celebrity talent, the product demos and testimonials are great, the offer and call-to-action are very effective and their retail distribution rounds the success story for them.
Stacey: Success really depends on what metrics you’re measuring, such as generating awareness, driving retail or just creating absolute sales volume. Proactiv Solution may be near the top of that list across a variety of measures. It’s created a brand and built tremendous awareness. It’s driven multiple channels of distribution, including print, kiosks, catalog and even vending machines. It’s sold billions of dollars worth of product, and most importantly, it’s built a real business with a billion-dollar equity value.
What is your “big prediction” for the DRTV business in the next quarter-century?
Fays: I only see more success in the future for DR provided everyone reading this article devotes as much time, energy and passion as needed to compete in a very competitive advertising world.
Garnett: How about two? First, DRTV will take the place it should hold at the table for brand advertisers — as one of the critical and powerful media used to drive demand and create big brand change. (Along with this, I think traditional DRTV media buyers will take an honest look at the extravagant prices paid by some of their colleagues for intellectual property shows and stop blaming brands for high media prices.) Second, DRTV will evolve as the Internet and television learn to live more intimately together. This evolution will bring the opportunity to make shows more persuasive by overlaying information that is better delivered in print or graphics. When used correctly, it will increase the profitability of our shows.
Hawthorne: The seeds of DRTV advertising that we have planted will blossom over next quarter century. DRTV will become known simply as “DRV” — direct response video. And wherever/however you will receive video images, there will be direct response messages: on your personal screen (formerly known as your TV and/or computer screen), handhelds (mobile phones and tablets), and OOH (out-of-home digital signage). Responding will be a touch of a button — pervasive and simple. The golden age of DRV is at inception.
Lee: As many times that we’ve tried to reinvent the wheel, it is all about giving the consumer a positive experience. It is about touching consumers and giving them credibility and validity in product choices. The consumer is now an educated consumer, with 80 percent of households having an Internet connection, yet the consumer also has become more fickle with reality TV taking up more of their time than ever. How do we as marketers break through the clutter and differentiate ourselves? It is all about understanding what the consumer wants and delivering them the goods time and time again.
Lyons: Continued robust growth led by the opportunities of interactivity in television.
Medico: The continued development of advanced technology that will enable DR advertisers and agencies to accurately monitor, track and analyze across all media platforms. This will be a total game changer.
Stacey: It’s been said that you can’t push on a piece of string. It’s sometimes better to let it gently pull you. It’s just as hard to predict where things are going in the next 25 years as it was for the past 25 years. At this point, I see DRTV being one element of a multimedia DR campaign across, and in combination with, multiple platforms, devices and media. The last 25 years was “As Seen on TV.” The next 25 years will be “As Seen Everywhere.”
Where would you like to see the DRTV marketing industry in 2035?
Fays: In 2035, I don’t think we will be using the term DR anymore. My opinion is all advertising will have a call-to-action component, and the division between general ad sales and direct response will no longer exist. This could happen by 2015.
Garnett: Trusted by consumers. For this industry to grow, consumers must trust our products, our response mechanisms, and each company’s willingness to stand behind its products. Today, this trust is in shambles. ERA’s efforts have proven fruitless, but that’s to be expected. Their goal seems to have been protecting DRTV from regulation — not building trust among consumers. A few traditional DRTV marketers have developed superb and trustworthy organizations. Still, too many will say whatever it takes to sell a product regardless of whether the product delivers that value. So for every trustworthy step forward, these campaigns seem to take us two steps back.
Hawthorne: Every advertising message will have a response mechanism. Period.
Lee: If TV is still a viable means of media in 2035, I would hope that every brand realizes that they must reach the consumer through direct response as a driver to all offline and online initiatives.
Lyons: I would like to see the industry thriving in all countries around the world with continued adoption by outside companies who recognize the importance of this form of advertising.
Medico: In the future, companies marketing via DRTV and online will experience a leveling off of new customer response, and marketers will need to look for growth through their existing customers. Full implementation of one-on-one marketing initiatives by direct response advertisers represents the future for revenue growth in our industry — and it will happen well before 2035.
Stacey: I would think and hope that video will be an important part of all marketing everywhere now that it’s cost efficient, portable and available for everyone to utilize. For example, we’re now placing tags on all our retail packages so anyone with a smartphone can watch the commercial and demonstration just by clicking on the box in the store. ■