Guest Opinion: Short-Form DR Is the Best Way to Jump Into the Hot Retail Market1 Sep, 2012 By: Collette Liantonio Response
U.S. retail sales rose 8 percent in 2011, the largest year-over-year increase since 1999 according to the United States Department of Commerce. But while total advertising spending across all media in 2011 was up just 0.8 percent (according to Kantar Media, a research partner of Response), one area of the advertising world responsible for the lion’s share of retail success is direct response television advertising, specifically short-form DRTV.
While Response and the Direct Marketing Association (DMA) agree that the size of the direct response market continues to grow — with revenue for DRTV, DR radio and DR-to-Web topping $400 million for the first time in 2011 — short-form DRTV media has gained a majority of that revenue. Indeed, as the editor of this magazine, Thomas Haire, pointed out in a recent column (Response, June), short-form DRTV grew 6.5 percent in 2011, enjoying its best year since 2008 — the year many ad agencies first felt the “squeeze” of reduced ad spending.
Even more impressively, the space grew nearly 10 percent in the second half of 2011 alone, far better than both overall TV ad spending and digital/Web ad spending.
These spending results dovetail nicely with the Commerce Department’s rosy 2011 retail shopping report. Those results show American shoppers returning to stores in droves, buying more products and spending more discretionary cash than in recent years. And, the story has continued through the first half of 2012, with the U.S. Census Bureau reporting that retail sales rose 6.3 percent across the first six months of the year. It’s clear that consumers are in buying mode once again.
It’s no surprise to long-time DR experts that while overall ad spending and digital ad spending has lagged, short-form DRTV spending continues to be strong, helping drive a retail sales renaissance across America. More traditional and mainstream marketers are turning to direct response as a viable method to not only drive direct sales and improve retail results because they see the success that DR marketers are having.
For example, Ontel Products of Fairfield, N.J., and Harvest Direct of Norwell, Mass., have been a part of this retail sales explosion.
Ontel’s Miracle Socks not only earned a 2:1 media efficiency ratio (MER) on direct sales from the TV campaign with many consumers buying three or more pairs, but the company is projecting 2012 sales at retail to fall between 3 million and 4 million units. Meanwhile, Harvest Direct’s Twist N Clip enjoyed a similar 2:1 MER, with more than 50 percent of those who call in response to the TV spot buying the product. The company says it is selling 1.5 million units per year, with extensive distribution in stores like Target, CVS, Wal-Mart, Claire’s Accessories and more.
These success stories fall in line with overall DR advertising statistics that show an industry on the rise, especially in the past 12 months. The success of short-form DRTV product sales, both via direct response and at retail, promises to continue in that atmosphere. The time is now for traditional marketers to continue to invest in the space. ■