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Direct Response Marketing

Field Reports December 2012

1 Dec, 2012 By: Doug McPherson Response


LifeBrands Won’t Rest on Its Pillow of Success

By Thomas Haire (thaire@questex.com)

In its October 2012 issue, Response announced and spotlighted the three finalists and winner of the Fourth Annual Direct Response Marketing Alliance (DRMA) Marketer of the Year Award. In this issue, we continue spotlighting the other top nominees in a monthly section. This month, we caught up with Mark Jones, partner at Breezy Point, Minn.-based LifeBrands Inc.

In the past year, LifeBrands’ My Pillow was one of DRTV’s biggest hits — ranking as the No. 7 infomercial and the No. 40 short-form spot in IMS’ 2012 year-end rankings (see page 36). Jones credits product inventor Mike Lindell’s passion for creating the “world’s most comfortable pillow” for a good chunk of the success story that, since debuting in October 2011, has not only sold like gangbusters but also created hundreds of jobs in Minnesota.

Q: What does it mean to you and your company to be one of the top nominees for the DRMA Marketer of the Year Award?

A: Anytime your peers acknowledge your work as being the best of the best, it’s something very special and a real honor. We have a lot of respect for the other nominees and all of the great companies we work with in the industry on a daily basis that help LifeBrands perform at a high level.

Q: What was the most significant accomplishment in the past year for your company?

A: I don’t think there’s a more significant accomplishment a company can have than helping an entrepreneur build a mainstream brand through direct response advertising. Like many great quarterbacks who’ve never won a Super Bowl, there are many great marketers in our industry who will never have an opportunity to experience the indescribable euphoria that exists when you create a huge hit like we’ve been fortunate enough to have with My Pillow this year. Knowing that we were not only a major part of building a mainstream brand, but that those efforts also helped put more than 400 people to work in the past year has by far been the biggest accomplishment for LifeBrands this year.

Q: How did the successful products you had during the past year fit within the overall concept behind your company? Were any of those products so successful that they changed the way you do business?

A: The campaign we put together for My Pillow was an absolute game changer for us. LifeBrands was created for the sole purpose of building brands through direct response and providing these emerging companies with hands-on experience and knowledge on how to build infrastructure and manage the rapid growth that comes with a successful campaign. What we discovered with My Pillow is that by being on premises every week allowed us to provide these valuable services in a way you could never do by phone or E-mail. It also helped us build the type of team dynamic and trust you can only get working side-by-side with someone for the same common goal — and the results speak for themselves.

Q: Why do you think your business responded well in an extended sluggish economy?

A: It’s a combination of a little luck and a lot of experience. We’ve had to navigate through the terrorist attacks of 9/11 and the financial crisis of 2008 — and in the process, we learned a lot of lessons. The work we’ve done on the My Pillow campaign has not only helped LifeBrands prosper in this economy, but it has also provided a much needed boost in business to other companies in our industry, which is a great to see.

Q: What is your outlook for the next 12 months? What are the top items in your pipeline?

A: Because LifeBrands only takes on a handful of projects at a time, we’re in the process of evaluating the different opportunities that have presented themselves to determine what makes the most sense — while continuing to manage the current projects we have rolled out. The election will have a pivotal role in determining the outlook consumers have going into 2013.

Q: How has technology changed the way your company does business in the past 12 months? How will it in the next 12 months?

A: It seems like every quarter there is new emerging technology that is making our industry more accessible and more accountable. We have offices in multiple states and could have never done so as seamlessly as we do without the technological advances of cloud computing and the Web-based applications we utilize. We have also embraced new technology to drive sales through social media and other online applications and are excited to see what’s coming next.

Q: What vertical markets do you believe are best equipped to survive current economic issues — and even thrive — in 2012?

A: Social media and mobile have proven to be winners when used properly, and I think this trend will continue to be an important part of any campaign going forward — especially as new technology emerges.


FTC Announces More Than 70 Actions Against Biz-Op Schemes

By Doug McPherson

WASHINGTON — In mid-November, the Federal Trade Commission (FTC) announced a major crackdown on scams that falsely promise jobs and opportunities to “be your own boss” to job seekers. The actions are the first cases brought under the FTC’s recently updated Business Opportunity Rule, which requires business opportunity sellers to provide specific information to help consumers evaluate a business opportunity and provides a simple one-page disclosure form.

The FTC alleges such scams have taken millions of dollars from more than 2 million consumers when defendants lured them with deceptive offers to help them start businesses as mystery shoppers, credit card processors, website operators and government insurance refund processors. The defendants allegedly committed multiple violations of the FTC Act, including misrepresenting how much money people could make through the business opportunity.

“The scam artists the FTC shut down lied to people trying to make an honest buck, and robbed them of their money as well as their hopes,” David C. Vladeck, director of the FTC’s Bureau of Consumer Protection, said in a release.

The amended Business Opportunity Rule requires business opportunity sellers – including work-at-home offers such as envelope stuffing — to disclose, in a one-page document: the seller’s identifying information; whether the seller makes a claim about the purchaser’s likely earnings (and, if the seller checks the “yes” box, the seller must provide information supporting any such claims); whether the seller, its affiliates or key personnel have been involved in certain legal actions (and, if yes, a separate list of those actions); whether the seller has a cancellation or refund policy (and, if yes, a separate document stating the material terms of such policies); and a list of persons who bought the business opportunity within the previous three years.

Misrepresentations and omissions are prohibited under the rule, and for sales conducted in languages other than English, all disclosures must be provided in the language in which the sale is conducted.

The operation includes a $478 million judgment the FTC obtained in August 2012 against the DRTV-marketed “John Beck Amazing Profits” product; the return of more than $5 million to consumers this year from FTC actions against Infusion Media Inc., AED Inc. and Abili-Staff Ltd.; and the FTC’s case, filed in May, against North American Marketing and Associates LLC.


DR Pros Weigh in on NBC, AmEx’s New T-commerce Partnership

By Doug McPherson

NEW YORK — The new partnership between NBCUniversal and American Express is sparking plenty of talk in the direct response world. The two companies announced an alliance last month that’s allowing consumers to buy products directly from a mobile device while they watch TV.

The campaign includes a series of 30-second custom vignettes that ran on each participating network beginning Nov. 7. The spots feature talent from the shows providing inspiration for the products, including Fabio Viviani (Bravo’s “Life After Top Chef”) and George Kotsiopoulos (E!’s “Fashion Police”). The on-air creative will also run online across DailyCandy, Bravotv.com, Eonline.com, and Mystyle.com.

The program will use zeebox, the companion TV viewing platform for iPhone, iPad, iPod Touch, Android and the Web that recently announced a partnership with NBCUniversal and Comcast Cable (among others) to provide two-screen technology that combines TV and social media with commerce.

The zeebox app will let NBC viewers get information on how to buy show-inspired items, including fashion and kitchenware. Plans are for each participating show to have a page tailored to reflect its style (e.g., with features like exclusive games, behind-the-scenes photos and facts, trivia and unique offers). So, there will be content surrounding the shows, as well as purchase opportunities.

The initial vignettes are featuring show talent asking viewers to download the zeebox app and encouraging American Express members to take advantage of the special offer. The second series of vignettes feature talent telling viewers to check out the weekly item for sale. Each week, a new show-inspired product will be offered.

Linda Yaccarino, president of NBC-Universal ad sales, calls the arrangement a “seamless way to capture viewers’ attention around the products and experiences featured on the shows they love, [narrowing] the path-to-purchase for consumers,” all the while offering perks to AmEx card members (who can get $35 back when using an eligible AmEx card that’s synced with their Facebook or Twitter accounts).

“We know today’s consumers are on other screens while watching television,” Yaccarino says. “NBCUniversal’s … portfolio uniquely positions us to meet the needs of any brand that wants to activate consumers in this unparalleled way.”

Members of Response’s Advisory Board expressed interest in and high hopes for the new program when queried. Peter Koeppel, owner of Koeppel Direct, a media agency in Dallas, is impressed by the partnership so far.

“Whenever you have two major brands like NBCUniversal and American Express teaming up in this type of venture, it captures your attention, since they have the resources to try to make this work,” Koeppel said. “There may not be any short-term application for DR marketers, but as this venture evolves, it may result in new channels for marketers to sell their products or services. On the other hand, I’ve seen many new technologies come and go over the years, so the chance of success for this venture is far from certain.”

Robert B. Yallen, president and CEO of the Inter/Media Group of Companies in Woodland Hills, Calif., said DR marketers, “by definition create a sense of urgency in how they position their products and services to the marketplace. Technology is now catching up to be able to enhance even further trial and purchase by telescoping the gap between the commercial messaging and the intent to act. There is nothing new here — but for the ability of marketers to continue to expand and refine the model that now through technology has become attractive to the more brand oriented mainline advertiser.”

David Savage, managing partner of R2C Group, a DR agency headquartered in Portland, Ore., says, to him, the most exciting part of the program is the product information that consumers will be provided. “While this has been envisioned for years, social media behaviors are so mainstream now that this application has a real chance for success,” Savage said from his Philadelphia-area office.

And Tim Hawthorne, president of Hawthorne Direct, a DR firm based in Fairfield, Iowa, said, “The Holy Grail of T-commerce, since the launch of Qube in 1977, has been an easy, fast, interactive response tool to replace the entrenched telephone. Social TV apps like zeebox might just finally get us there.”


TiVo (Yes, That TiVo) Launches TV Ad Campaign

By Doug McPherson

ALVISO, Calif. — In a move that’s destined for a page in the Guinness Book of World’s Most Ironic Moves, TiVo, the company that nearly gave the TV ad industry a massive coronary with its ad-skipping technology, is spending millions on a TV ad campaign to tout its services beyond just video recording.

Tara Maitra, senior vice president and general manager for content and media sales for TiVo, told Marketing Daily that TiVo is “so much more” than a DVR and that “there’s an insatiable demand for a better TV experience, that consumer call for a better experience is something TiVo has been delivering.”

TiVo itself created the ads, which began airing on Nov. 27 thanks to a media buy from R2C Group in Portland, Ore. New York Jets football player Tim Tebow has been named the new “brand ambassador” for TiVo and appears in the campaign’s TV, print, radio and social media ads. Tebow also pitches for Jockey, Nike and the FRS line of energy drinks. Financial terms of the agreement weren’t disclosed.

In a promotional video on the TiVo Web site, Tebow tells viewers he likes TiVo’s DVR and other TV services. Tebow says, “It’s a player that can do more than just one thing, which I respect,” adding that his ardor is “not just because the name” — TiVo — “sounds cool.”

The video ends with Tebow’s recital of the TiVo ad theme, “TiVo makes TV about a thousand times better.”

TiVo is featuring a “Tim Tebow Zone,” a collection of Tebow’s favorite shows, movies and recommended content for kids from television and the Internet, on its boxes. TiVo also is using social media to support the Tim Tebow Foundation, donating a dollar for every “Like” the brand gets on its Facebook page (up to $25,000).

Maitra told Marketing Daily that enlisting Tebow was a natural fit and not just because his name and the product rhyme. “It’s much more than the name,” she said. “When we thought about Tim Tebow as an interesting and unconventional guy, we started giving more and more thought about what TiVo stands for and how he would be a great spokesperson.”

Maitra admitted the irony surrounding TiVo television ads, but she adds TiVo’s mission has always been to work with advertisers to provide additional content, not circumvent advertising. “We’re strong believers in the power of television advertising in getting your message across,” she said. “The campaign is designed to tell the broader story about how special and different TiVo is, and bring along a new generation of users.”



Vantiv to Acquire Litle & Co. for $361 Million

By Doug McPherson

CINCINNATI — Vantiv Inc., a leading provider of payment processing services and related technology solutions for merchants and financial institutions, has signed an agreement to acquire Litle & Co. for $361 million.

Litle & Co. is a leading independent E-commerce payment processor, providing a fully-integrated payments solution for companies that sell goods and services to consumers via the Internet and through direct response marketing.

According to a Vantiv news release, acquiring Litle & Co. increases Vantiv’s capabilities in E-commerce, expands its customer base of online merchants and allow it to deliver Litle’s E-commerce solutions to many of Vantiv’s clients. The combined service offering will leverage Vantiv’s scale, distribution channels and support capabilities, to address the evolving payments needs of businesses in multiple channels, and offer merchants a one-stop suite of point-of-sale, E-commerce and direct response payment processing solutions.

“E-commerce is one of the fastest growing segments of payments,” said Charles Drucker, president and CEO at Vantiv. “As our clients continue to expand their online presence to meet their consumers’ demands, they rely on us to meet their payments needs through our integrated processing platform. The acquisition of Litle & Co. will enable us to offer leading, integrated products in high growth markets, allowing our clients to engage with their customers across multiple channels, with better visibility and increased simplicity.”

Tom Litle, president and CEO of Litle & Co., says the agreement “represents the beginning of a new chapter in our company’s evolution. By partnering with Vantiv, we’re able to accelerate the development and distribution of the value added services Litle & Co. is known for and drive payments intelligence deeper into the operations of the world’s leading E-commerce and multi-channel merchants.”

Litle says the two companies “share a deep-rooted commitment” to customer service and “providing a world class environment for the industry’s best talent.”

The transaction is expected to close in late 2012, pending regulatory approvals and customary closing conditions. Upon completion, Litle & Co. will become a subsidiary of Vantiv LLC and will maintain its location in Lowell, Mass.

 


Cable Cord ‘Frayers’ Could Mean Billions in Losses

By Doug McPherson

LIVONIA, Mich. — You’ve likely heard of “cord cutting” — when TV viewers cancel their paid TV services. Now there’s “cord fraying” — downgrading pay TV subscriptions and decreasing pay-per-view usage fueled, of course, by the economic downturn and now spreading like wildfire because of easy to get and use technological advances.

Now a national study by Market Strategies International says the biggest consumers of video are the most likely to limit their paid TV viewing and subscriptions. These cost-conscious and technologically savvy “cord-fraying” consumers are becoming more targeted in their video-viewing habits, potentially costing cable operators billions of dollars per year in lost revenues.

“These technologies are simple to use, so few cord frayers return to their previous viewing habits,” said Randall Hula, vice president of communications at Market Strategies. He added that cord frayers are consuming video through tablets, smartphones and computers rather than their televisions, and are more likely to use a Blu-Ray player and services such as Hulu, Netflix and Amazon Prime to view movies, TV series and children’s programming.

“The consistent themes among cord frayers are that they are video-heavy and technologically savvy consumers who are choosing products and services that allow them to view the content they want, when and where they want it,” said Hula. “These are exactly the people who, in the past, drove the cable industry’s PPV and premium channel revenues, and they’re being lost to new ways to view.”

The average cord frayer surveyed by Market Strategies reported a $42 monthly savings on their cable bills by cancelling and/or downgrading subscriptions and decreasing PPV usage. As alternatives become more ubiquitous and even easier to use, the potential exists for cord fraying to become more widespread, costing cable operators billions in annual revenues.

“Cord frayers are dissatisfied with their cable companies and can now do business with those companies on their own terms,” said Hula. “Cable providers are hanging on to a portion of cord frayers’ business thanks to some content that consumers can’t get anywhere else, but the revenue these customers are taking elsewhere is overwhelming.” ■

 


About the Author: Doug McPherson


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