Response Magazine’s 17th Annual State of the Industry Report1 Sep, 2012 By: Thomas Haire Response
Members of the magazine’s Advisory Board speak out on the current state of the direct response marketing industry.
Another year down, yet many of the issues facing the direct response marketing business remain the same: a sluggish economy, aggressive regulatory expansion and the continued proliferation of media outlets and new marketing technologies. For an industry that prides itself on understanding the metrics of its success instantly, these factors and more are changing the business at a speed even the most capable DR leaders find it hard to keep up with.
For instance, Doug Garnett, founder and CEO of Atomic Direct in Portland, Ore., says even the retail space that has become such a stalwart for many short-form DRTV marketers, now faces new challenges. “As an industry, we should keep an eye on retail concerns about showrooming — where websites like Amazon reap profits from the brick-and-mortar investments of others,” he says. “The majority of purchasers will only showroom if there’s a dramatic price advantage. It’s not yet clear how this affects DRTV, but every retail trend affects us in some way, and this one is particularly concerning. My hope is that smart retailers — like Macy’s and Lowe’s — recognize that by destroying the online silo, they can offer a far better consumer value than Amazon — all the flexibility of seamless choices amongst online and store purchases.”
For the past 16 years, Response has asked members of its Advisory Board to analyze current trends and make predictions about the future of the direct response space. Once again in 2012, their thoughts represent a cross section of the industry: from DRTV legends to technology experts; from the international perspective to that of leading marketers. According to these leaders, this is the state of our industry.
What was the most significant accomplishment in the past year for the DR industry?
Doug Garnett, Atomic Direct: Industry critical mass embraced the reality that we live in a multi-channel world. Individuals from all corners of the business are talking about the critical issues of how to execute and measure campaigns that fully embrace the consumer desire to purchase through the channel they prefer. In no way does this imply phone sales are passé. The truth is that the consumer decides how they want to buy. And, lest we assume too much, that sometimes gives us surprising results. For example, adding an 800-number to your sales website may increase purchases because some consumers research on the Web but prefer to purchase from a human. This multi-channel world also means a full embrace of retail. As a business, though, we are still learning some of the nuances that make for truly powerful retail distribution.
Steve Heroux, Hampton Direct: Increased use of online social media is becoming an essential part of any successful marketing campaign.
Peter Koeppel, Koeppel Direct: The industry has been able to attract bigger brands that see the value of DR to brand, drive retail and generate direct sales or leads in a cost effective manner. CMOs are only in their jobs an average of 18 months, and they are now under pressure to show an ROI from their marketing investments. More CMOs are finally realizing that employing DR as part of their marketing mix can help them achieve this goal. The industry has been instrumental in helping to educate CMOs about the advantages of DR and our efforts are beginning to pay off as larger brands are beginning to embrace DR.
Fern Lee, Thor Associates: The DR industry’s biggest feat is its ability to continually evolve with multi-channel strategies — even as media ricochets with new technologies and platforms each day and even as the economy keeps erratically staggering. Direct response’s ability to break through all the static and retain clear brand images amidst so much change is this year’s resounding triumph.
George Leon, Hawthorne Direct (senior vice president of media/account management, answering on behalf of Tim Hawthorne): The industry rebounded strongly after a transitional 2011 against the backdrop of still dark economic clouds and a yet-undetermined political season with heavy candidate spending. Traditional long-form DR campaigns, especially in fitness and diets, have rebounded strongly.
Mike Medico, E+M Advertising: “Survival” in what I consider a lackluster economy. According to industry insiders, the response to various offers has dropped dramatically and reflects on the uncertainty that consumers have about the future.
Rob Medved, Cannella Response Television: The optimization of and dedication to E-commerce. As dated as this statement may seem, everyone is now very tuned in with the importance of a quality E-commerce platform and strategy.
Digby Orsmond, ARM Direct Ltd.: For the average bank customer, though, the one scandal among all recent U.K. banking issues that is having the biggest personal impact is the mis-selling of PPI (Protection Payment Insurance). The big five U.K. High Street banks have already set aside $13.5 billion for PPI compensation payments, of which more than half has already been handed out to customers. What this means for the DRTV industry is that several PPI claims compensation companies are spending in excess of $1.5 million per month on DRTV lead generation advertising and this trend is likely to continue for at least another 2 years as there are still millions of bank customers who have not yet made a PPI claim and are owed money by the banks.
David Savage, R2C Group: It’s the continued embrace of direct response by well-known marketers and brands. In the housewares category, for example, Hoover and Dyson really made a commitment to direct response, likely based on the success that Euro-Pro and Oreck have achieved in recent years. Established brands utilizing the channel helps to further build credibility with consumers, helping all sectors of our industry. Our own work this year with major marketers has been very encouraging.
Richard Stacey, Northern Response Intl. Ltd.: The DR industry continues to transition the traditional business model from one originally centered primarily on TV to a more multi-channel media model. It is not an easy transition, but those marketers who do make it will come out stronger.
What do you believe the hottest topic will be in the coming 12 months?
Garnett: We will continue to put out far too much effort sorting between the hype of the latest media technology and far too little into the really critical issues that drive success: your product, its reason to exist, and how to best communicate that to consumers. Thankfully, I believe the idea that social media is the future of all communications will go away. In about 18 months, we will have a far clearer sense of the incredible weaknesses of social media. While it will remain active, it will fade to its appropriate place in the marketing mix.
Heroux: Media rates certainly will be a hot topic. Although rates have been fairly stable, response rates have been decreasing and with media rates threatening to increase, it will make it all the more challenging for our industry.
Koeppel: Successfully incorporating social, mobile and digital video/TV into the DR marketing mix will become more crucial in developing a successful DR campaign. As more consumers watch TV and digital videos online through YouTube, Netflix, Hulu or Amazon (and through non-traditional devices) and spend more time engaged with social media and their smart phones, DR marketers will need to adapt to their marketing approach to tap into these changes in the way people consume media.
Lee: Expect to see the steadfast rise of a more integrated DRTV channel, combining all forms of social, mobile and traditional practices. Despite the proliferating nature of media outlets, the connection between all online and offline marketing channels will be a hot topic in the next year. Hybridizing digital and traditional — now doesn’t that just sizzle?
Leon: Further expansion of lead acquisition and sales funnel conversions from healthcare, financial services and insurance companies will be crucial. Retail support or drive will be key marketing executions, as well.
Medico: The growth of mobile and its relevancy to our business will have great importance to our industry. Applying direct response creatives and marketing strategies, however, will be the challenge — and we will need to adapt.
Medved: Order attribution due to the adoption of mobile and multi-screen order processing will be crucial. Order data confirms that people have their mobile phones and tablets with them while watching TV and when shopping at retail to gather more information. The fragmentation of orders driven by a DRTV airing has moved from pure inbound, to inbound/Web and now to Web/mobile/tablet and inbound. That bodes well for DR, but can also make life a bit more complicated. This migration from pure attribution (800 number) to no attribution (web/mobile/tablet) poses a huge problem for DRTV marketers as they try to analyze the value of the specific media they are purchasing to drive those orders.
Orsmond: The hottest topic in the U.K. will be how major fashion and cosmetic brands have finally woken up to the power of brand response TV (BRTV) and are now running these responsive campaigns alongside their traditional image spots. Take, for instance, an award-winning BRTV campaign for Barry M, the U.K.’s most successful teenage cosmetics brand. By switching to BRTV-style creative, Barry M has persuaded huge numbers of young British girls to Tweet or go online and join its fun Facebook page. The result has been a substantial uplift in retail sales and taking market share away from the much larger Rimmel cosmetics brand, which uses Georgia Jagger (daughter of The Rolling Stones’ Mick Jagger and supermodel Jerry Hall) in its TV ad.
Savage: It will be increased adoption of the accountable advertising strategies that our industry offers, how that impacts media pricing and how DR marketers adapt. More and more marketers — whether Fortune 500, established manufacturers, online businesses or emerging brands — are seeing the advantages that direct response advertising can bring to the table.
Stacey: The industry’s ongoing transition to a multi-media universe and who is surviving and who isn’t will be crucial. The big question is who has developed a sustainable business model that works? As an industry, we are all in this transition together but in many ways we are still building the boat as we are rowing it out to sea.
What do you believe the most crucial topics for direct response marketers during the next 12-18 months will be when considering the actions of regulators, such as the Federal Trade Commission (FTC), Food and Drug Administration (FDA), and Federal Communications Commission (FCC)?
Linda Goldstein, Manatt Phelps & Phillips: The most significant regulatory challenge for the DRTV industry is the FTC’s increasingly restrictive approach to claim substantiation and aggressive enforcement posture. FTC orders are now more consistently requiring marketers to have double-blind, randomized, placebo-controlled clinical studies to support any weight-loss or other health-related claims. While these new order standards originally appeared only in orders for dietary supplements, the FTC’s recent orders against Reebok and Skechers have imposed similar requirements for fitness claims. This trend will continue in the coming months, and the FTC will continue to expand the category of products and claims for which this level of substantiation will be required. This will make it increasingly difficult for DRTV marketers to make compelling claims for their products even when they have conducted user or testimonial group research supporting the efficacy of the product. In addition, the magnitude of fines and demands for restitution that the FTC is seeking in these orders will likely set new bars for settlement of FTC actions. Demands for full restitution are becoming the norm even in cases simply involving substantiation of product claims as opposed to cases involving outright fraud. These trends will substantial increase the regulatory risks for DRTV marketers and make these cases increasingly difficult to settle. The DRTV industry will also be impacted by the activity of the new sheriff in town — the Consumer Financial Protection Board (CFPB). The CFPB, in its first public enforcement action, stunned the marketing community by demanding a payment of $140 million in consumer restitution and $25 million in penalties stemming from sales by Capital One’s call center vendors of upsell products to consumers who called to activate their credit cards. Threats of CFPB enforcement are likely to make these financial institutions increasingly nervous about the marketing activities they are supporting, which could have in impact on the willingness of these companies to enter into affinity programs with marketers. Privacy and data security are likely to continue to be a major focus of regulatory and enforcement action. While it is unlikely that any new privacy or data security bills will pass Congress prior to the election, the FTC is likely to continue to aggressively monitor this space and take enforcement action against companies that do not adhere to their stated privacy policies or that experience a data security breach.
Steve Netzley, Euro RSCG Edge: It’s all about claims: “typicality” as it relates to testimonial claims; and results of program usage claims. Determining “typicality” will likely require a clinical study, usually over a relatively significant period of time, to establish what “typical” actually is. Such studies are quite costly. Marketers have traditionally been able to utilize focus groups to illustrate the benefits of their products or programs and star participants in those groups as testimonials. The “typicality” threshold will have a significant impact on how marketers present the benefits of their products/programs, which testimonials are used, and raise the upfront expense of launching these campaigns.
Garnett: As I suggest nearly every year, it’s critical that the industry embrace these rules. There is a very significant consumer trust issue caused by companies that violate consumer trust for short-term profits, but hurt everyone else’s business with reduced trust. The market won’t punish this behavior, but our industry and regulators should. This year, it will continue to be in the more hidden areas — what happens to a consumer after they call? The stories I hear from people who have purchased traditional DRTV products by phone can be horrid. Industry trust erodes every time someone calls to buy a $19.95 product only to end up with a confusing $50 to $60 charge on the credit card — or calls to buy a $200 product only to end up with an unexpected 24-month commitment to buy nutritional supplements.
Heroux: The recent actions of the FTC, FDA and FCC are only a result of a small minority group in our industry. For the most part, I agree with these organizations in their actions in that questionable business practice needs to be addressed. This will only help strengthen our industry and make our campaigns better for the end consumer, whether we are selling goods or services.
Koeppel: With more regulation, direct response marketers need make sure they are compliant in all areas of their marketing endeavors. New rules related to consumer privacy and negative options are two areas that direct response marketers need to stay abreast of and incorporate into their marketing practices.
Lee: In light of recent controversies in the regulatory arena, the “Do Not Track” option seems to be at the forefront of future debate. As more big-brand companies in the technology industry continue to set default “Do Not Track” features on retailers’ Internet browsers, the advertising business is at a clear disadvantage for customizing ad campaigns and pursuing target audiences. Thus, the effort to instill self-regulatory programs for the customers’ “Do Not Track” option is a fierce battle that may, indeed, be worth fighting. Stay tuned.
Leon: These government agencies have reacted strongly and properly against marketers with weak-to-no substantiations or false claims. I don’t see much more regulation, since we are seeing stronger skew to lead-generating, “free information” type campaigns
Medico: The most crucial topic for product marketers will continue to be how to position bonus/premiums to generate impulse response. You can already see this in the way various offers use “Free, just pay additional shipping,” has caused concern among the regulators of our industry.
Medved: It’s the same as usual: claims and testimonials. It is always a marketer’s job to push the envelope when it comes to eliciting a consumer’s emotion and response. General advertisers get away with sensationalized representations of product effects, but direct marketers must walk that fine line between perception and reality, continually trying to convey the product’s best attributes within the guidelines set by governmental agencies.
Stacey: As the old saying goes, “Why is there never enough time to do things right when there is always enough time to do things over?” In today’s regulatory environment, you have to have your Is dotted and your Ts crossed or it is likely going to be a very unpleasant and expensive experience if you run afoul of regulatory requirements.
How is the up-and-down economy treating marketers in the DR business? What effect is the current economy having on campaign success rates, media rates and other areas?
Garnett: I hear a lot of industry concern that overall effectiveness rates are down. But these are ideas we should be slow to embrace. Far too often, our business reacts to anecdote without searching for true proof of what’s going on. My own sense is that response rates and media rates remain well balanced. We have campaigns for similar products and retail situations where the direct response rates (MERs) remain identical to what they were in 1994, just after I started in this business. That being said, some perception of problems come because our industry struggles to know how to project and measure the dispersion of direct response across phone, your website and online retailers like Amazon.
Heroux: Great products and services will continue to do well whether the economy is up or down. The one thing that changes is the type of campaign that succeeds. In a soft economy, consumers are more cautious with spending and will be more likely to spend on immediate needs or absolute need-to-have products or services. Also, in a softer economy, some companies will be a little more aggressive in trying to sell products and services that are not necessarily suited for our industry, thus decreasing our overall success rates.
Koeppel: Political uncertainty, the negative economic situation in Europe, looming tax increases and spending cuts, and stagnant job growth all have contributed to consumers and businesses being more cautious about spending. This has negatively affected DR success rates. However, it has also softened media rates, which has helped to offset lower response rates. These issues will not begin to be resolved until the after the elections, so until then expect the consumer to remain cautious about what they purchase.
Lee: The macroeconomic downturn that our economy has been facing for almost a decade is still a force to be reckoned with. However, we must persistently uphold our micro-management of individual clients, focusing on the particular areas where success abounds. Therefore, to excel in today’s economy, you need a trail-blazing product with an innovative message that is not just desirable to consumers, but indispensable. With the 2012 consumer being so fickle and technology and digital opportunities proliferating, it takes constant contact with a strong call-to-action (CTA) for conversions and a robust ROI.
Leon: The up-and-down economy has helped maintain reasonable DR media rates in the short-form platform, resulting in improved response performance. This is especially true for lead and soft-offer campaigns. Long-form media rates have increased, due to a competitive marketplace, and rely heavily on continuity programs. We have recently seen tightening on “Tier 1” cable networks as a result of strong spot scatter market.
Medico: As I mentioned before, the current economy has greatly impacted response rates and has had an even great impact on the halo effect on sales at retail. As far as media rates go, we have only seen the cyclical rise and fall of rates that are normal for direct response.
Medved: The economy seems to have suppressed the DR sales channel more so than brick-and-mortar retail. Retail sales posted better results than DRTV in 4Q 2011 and 1Q 2012. Costs-per-order continued to climb as rate relief did not compensate for the diffusion of TV viewership to other media forms, such as online video and OTT. Perhaps the biggest impact is the number of new product launches. There are fewer new entrepreneurs launching products or finding the capital to launch products. The new product pipeline from seasoned and successful DR marketers also seems be less than in prior periods. The economy has shifted the risk/reward equation. More uncertainty equates to more risk and less potential for reward. Marketers are making safer bets by trying to extend the longevity of a product (take it to retail, drop the price, repackage, etc).
Orsmond: The uncertainty in the European financial markets brought about largely by the possible default of Greece to back pay its billion-Euro bail-out, along with Portugal, Ireland, Cyprus and Spain having already been bailed out by the EU, means that consumer confidence across Europe is at an all-time low. Fortunately, the U.K. is not part of the 17-country Euro zone and the British pound remains strong. However, the constant stream of bad economic news has affected British families, and households are spending less and saving more. It is alleged that U.K. home shopping companies have seen on-air sales drop by as much as a one-third, and the London Olympics had a negative impact on TV channel audience in August figures while everyone was tuned in to the games on the non-commercial BBC channels. Should U.S. companies want to test DRTV spots or infomercials in Europe, my advice would be for them to look no further than the U.K., as the TV media rates here are steady. Add to this a commonality of the English language and a liking by the Brits for all-things-American.
Savage: Despite a slow-growth economy, the companies marketing unique products or services with value-driven offers are doing just fine. Online businesses are doing very well, but certain categories with past success that have been impacted by the Internet (entertainment comes to mind) have had to adapt or see declining success. Success has to be defined across all channels, from an integrated marketing perspective.
Stacey: At present, many factors are impacting the DR industry so it is hard to isolate just one. A poor economic environment is just one more challenge in addition to a proliferation of media choices, a splintering of the mass audience, and overpriced media rates. I think lower-priced items have a better chance of success. However, if done correctly, higher-priced items can work but are more challenging.
How has technology changed the way your company does business in the past 12 months? How will it in the next 12 months?
Garnett: We fully embrace the beauty of on-demand reporting, new production technologies, digital call records, and many other excellent technological advances. However, I find technology is often only a shiny bauble that distracts from more important issues. So we remain committed to carefully embracing the important new technologies — but with balance.
Heroux: Certainly, as the Web continues to evolve and mature, it continues to change the ways we spend some of our media dollars. We expect to be testing a lot more with mobile marketing in the coming 12 months.
Koeppel: Our interactive dashboard now allows our clients to obtain real-time results and to manipulate campaign data through their tablets or smartphones. Technology that integrates offline and online campaigns has become crucial for us in improving the ROI of the campaigns we manage. Changes in technology enable us to hire the best people no matter where they are located in the U.S. Finally, we can now access a full range of research tools online, in real-time that help us to better optimize our media buys.
Lee: The combination of digital and traditional has been vital. Customer relationship management (CRM) is the new buzzword. The idea of an “ordering” platform has been replaced with a cloud-based data chest of consumer information and buying behavior. Technology platforms for gathering information and improving offers are the key to a successful campaign. Since social, mobile and digital are key players driving consumer engagement and ROI in today’s economy, combining such technologies with traditional DR tactics will be the secret ingredient that keeps customers coming back for more.
Leon: Online analytic tools have become inherently important to measure true DR online response attribution and media performance. Over the next 12 months, it will be crucial to attribute all conversions in a lead and sales acquisition funnel to measure the true ROI of a campaign. More analytics will be required to enhance value to media buying, analysis and performance.
Medico: Our agency continues to invest heavily in technology for our interactive and mobile divisions and to enhance our media software. We will be completing the development of our online/offline response analytical software as well as a total remake of our “Order-EZ” shopping cart in the next three-to-six months.
Netzley: Media-mix modeling, response attribution and CRM have all been massively impacted by technology during the past year or two. With so much of the business our industry is transacting with consumers occurring either through a home page or in a retail environment, agencies have to rely on much more sophisticated analysis tools and methodologies to understand what media and what messaging is driving purchase behavior in these channels — and how to optimize both.
Orsmond: I cannot comment on all 27 European countries, but here in the U.K., we recognized several years ago that the best way to help our DRTV clients keep ahead of their competitors was to invest in creating the Armada software program, a bespoke analytical tool which allows all our DR clients remote access to their daily sales data online from wherever they are in the world. Several of our DRTV clients are multi-national companies, and they can log on and view their sales data — everything from daily response per TV channel, per telephone number to airtime and budget reconciliation per DRTV creative. The world is a global village and we needed to offer our clients daily campaign tracking and analysis reports supported by easy-to-understand graphics.
Savage: We are leveraging online platforms in a variety of ways: for consumer research that provides us insight on most impactful messaging and offers; for audience viewership levels; for client programming; and for improved results tracking and reporting to clients. All of this leads to more rapid and profound information delivery to marketers to help them adapt and achieve success. We expect to be able to leverage even more innovative technology solutions in the year ahead.
Stacey: Our company evolves as technology evolves. We do business in 90 countries. I have toured DRTV companies across the world, and we routinely study global best practices and try to adapt them in our home market. Whenever we can use new technology to improve our business, we do.
How are media rates affecting direct response marketers as we head into 4Q 2012 and early 2013?
Garnett: I’m quite glad that most of our business is on national cable. The political feeding frenzy in local markets this fall will produce nasty media buyer headaches. These headaches will be primarily absent on national cable — although we will see some PAC action. So, apart from political ads, media rates are pretty stable right now. We’ve already seen most of the increases from the return of general advertisers after the recession. And TV remains quite strong.
Heroux: In regards to short form, I expect to see a sharp increase in rates. The bigger marketers will have plenty of goods at retail and will be forced to push media through in order to meet “point-of-sale” expectations from all the major national retailers. This will mean losing substantial money on marketing campaigns for many of the products that will be out there with a lot of retail exposure. Retail sell-through expectation is getting higher and higher. I expect to see the usual more favorable rates the last two weeks of the year as well as the early weeks of 2013.
Koeppel: Media rates were relatively soft this summer. I expect that things will tighten up as we head into the fourth quarter with the elections and as general advertisers and retailers begin their holiday push.
Lee: Naturally, in any election year, we expect to see an upsurge in media rates. The demand for national and local short-form will increase, as these DRTV ads fight against an explosive growth in political campaigning. Together with the tightening of DR inventory, there will inevitably be an upward slope in pricing. However, shrewd marketers will take this foreseeable outcome into account months prior, and come into 4Q and early 2013 with the connections and backup strategies to endure the election months with finesse.
Leon: The DR industry is heavily impacted by this political season and high spending by political candidates. Clearance has been challenging for short-form campaigns. Media demand will remain high as we transition from the political season to the holiday season and will create higher visibility of shorter creative, like 15-second and 30-second spots in the DR marketplace.
Medico: We have yet to determine the impact of political advertising, both local and national, on rates and avails but it is our expectation that it will be no different from past election campaigns. Our agency also expects in first-quarter 2013 a return to the traditional increase in avails and corresponding decrease in rates.
Medved: Media rate discussion is akin to running in a hamster wheel. For the stations and networks, rates are never high enough. For marketers, rates are never low enough. The beauty of DRTV is that media time is a commodity whose price is set by the marketers vying for the time. Those marketers with hits can pay more and run more. Those with lesser performing shows pay less and run less. That said: those marketers that embrace a multi-channel approach that also bakes considerable retail or long-term revenue back into the front-end TV sale are the ones that are winning the DRTV game right now.
Netzley: The political advertising season this year will have a fairly significant impact on both media clearance and rates through early November, and likely result in a condensed retail season from mid-November through Christmas.
Orsmond: The U.K. economy continues to be in recession and the “credit crunch” is definitely hurting retail sales. The upside for the DRTV advertiser, however, is that TV channels are struggling to attract larger brand advertisers, and many are reducing their airtime rates. This means that savvy DRTV advertisers are now paying less for 60- and 120-second spots than four years ago, and — if they have the budgets — will be able to increase their opportunities to sell. The main concern in the U.K. following the previous Beijing Olympics was how London could follow the $44 billion Chinese spectacle with its own modestly budgeted $18 billion event in 2012. They need not have worried as the London games were an outstanding sporting event, but the flipside is that it has not been a commercial success for the rest of the UK. TV media spot rates during the Olympics were better than anticipated, as the commercial TV channels had not generated sufficient revenue due to the mass migration of viewers to the non-commercial BBC channels covering the games. This lowering of the spot rates encouraged many DRTV advertisers to increase media spending during this period only then to experience fewer sales and/or leads due to fewer viewers watching these channels. U.K. media spot rates will probably increase in the fourth quarter of this year as the commercial TV channels attempt to catch up on lost earnings, and that this claw back will continue into 1Q 2013.
Stacey: Media rates will remain high due to demand and the upcoming election. That doesn’t mean the rates won’t work for DR, but just that the stations will continue to charge the maximum amount the market will pay.
The DR-to-retail game plan now seems to be a must for every campaign that hits television. What are the three most important things a marketer must do to have the right retail plan in place?
Garnett: First, if you have the funds, release your campaign with retail in place. It dramatically reduces the risk to your success. Second, work to get superb placement as part of the typical mix and not as another nutty “As Seen On TV” product. Sadly, for a significant portion of the traditional business, retail focus is on the “As Seen On TV” end cap. Third, plan for the long run. If your product has legs, your DRTV/retail combo will produce superb profits for years. One key way to set this up is to keep media spending at a wise level. Blowing out the product early in a campaign is one profit approach. But for those with long-term goals designed to build a category company, you are far better off to control your spending and grow slowly. In part, you’ll need a long-term base of revenue driven by your DRTV/retail combination to give your company time to establish other products within the same category.
Heroux: First, make sure marketers have the cash flow to launch at retail. All major retailers expect to receive hot new items around the same time. This means plenty of goods need to be purchased at once to fill all the retail shelves with plenty of back-up stock in case of higher than expected velocity. Being on back order is not an option. While this is happening, marketers will need to spend several million dollars on media to create the necessary awareness needed to meet “point-of-sale” expectations. Next, make sure products are placed in the majority of or almost all of the major retailers. With marketing response rates being lower, products need to have as much retail exposure as possible. Finally, make sure marketers are working with plenty of margin. Once there is full retail penetration, marketing can get very expensive and that needs to be covered in your margin when selling to retail. Marketers cannot afford to be caught in a situation where there are not enough media dollars left to push retail sell through.
Koeppel: Since the cycle of marketers taking DR products from TV to retail has shortened during the past few years, it’s now imperative to have a retail plan lined up prior to launching a DR campaign. Once a DR marketing program commences, marketers need to be prepared to go to retail in as little as 60 days. Lastly, they need to employ a media plan that combines traditional media metrics with the cost effectiveness and flexibility of DRTV, in order to maximize the impact of their media plan on retail sales.
Lee: First, you must command your target audience. Create lists of potential customer groups and start testing to see where the most responses and conversions pan out. Second, you must deliver distinct positioning. Packing the punch with a clear, strong call-to-action is the foundation for a DR campaign, ensuring that customers will buy from your retail shelves. When positioning, confirm that your branding is clean, clear and showcases your competitive edge. Evaluating comparative metrics with rivals is key for your retail positioning. Third, remember that the follow-up is everything. Make sure your retail stays in stock longer than your DR campaign runs on TV, as customers may purchase your product a week or two after watching your ad. Re-marketing efforts are key. Always E-mail customers, send promotions and maintain social dialogue. Creating a loyal customer base is the answer to establishing a sturdy business, because word-of-mouth is still the most sought-after component of CRM. Once your brand is trusted in the public eye, your retail success is a surefire byproduct.
Leon: Understand the retailer being targeted; identify key markets; and make sure creative retail tags match audience delivery.
Medico: The three important elements when using direct response to support retail are: have the offer and CTA tested and determine the maximum budget you can spend each week; adjust the allowable to reflect the attrition in direct sales that can be applied to retail; and change the media objective from the lowest cost-per-order (CPO) or media efficiency ratio (MER) to the lowest cost-per-thousand (CPM) to aggregate the most targeted viewers/consumers for the lowest cost.
Medved: You must have adequate working capital to build retail inventory and to maintain marketing support. It’s not a trade-off. Second, you must continue advertising support to drive consumer demand. Retailers expect ad spend. Finally, a good network of retail contacts is a must. It is very difficult to be successful with an unproven track record and no pre-existing relationships. However, I would argue that while short-form campaigns almost certainly drive to retail, the same is not true for long-form. Half of the current long form shows on the IMS will likely never go retail.
Netzley: Understand how much to ship in to retail. Overstocking your retail partners can be devastating to your cash flow, your reputation and your bottom line. Also, support your retail with compelling sales messaging in other channels — TV, online, print, radio, out of home, etc.
Orsmond: Major retailers are fighting back by sponsoring prime-time TV shows or planning to spend substantial media budgets on their pre-Christmas TV advertising. In the U.K., getting your product into retail is all about whom you know and managing those relationships well. JML is the standout DR company in the U.K., and its video-in-retail locations set the company apart from everyone else. JML has 7,000 of these video screens located in 3,500 stores across the U.K. By thinking outside the box, JML is now the U.K.’s DR leader by a substantial margin. Newcomers from the USA will find the European market very confusing, so my advice again is to concentrate your efforts on the U.K. first and link up with an established agency with many years of DR experience.
Savage: First, create a value-laden DR offer that drives ROI to subsidize the media investment that will ultimately drive retail. Next, anticipate competition and have a plan to get to retail first with retail friendly offer. Finally, know how to leverage media to drive retail most efficiently. Strategies are dependent on objectives.
Stacey: Driving retail with TV is more difficult than most people realize. You need to do a lot of things right. In order for TV to drive retail you must match a certain threshold of media spending with a certain minimum number of retail doors and at the same time ensure featured placement in each store. If these three elements are not in alignment, you might find yourself spending money on TV but not getting any drive at retail.
What are the three biggest effects the growth of social media is having on the DR marketplace?
Garnett: When I asked this of my panelists at Response Expo, there was a surprising agreement: Social is here and happening, but it’s also extraordinarily difficult to monetize. And it can be a tremendous drain on the energy of a company, requiring resources far outpacing its return. So there’s clearly an impact in that every company has become active in social and every company is concerned by the risks of social. But there’s little clarity on the impact social can drive.
Goldstein: DRTV marketers are beginning to embrace social media in greater numbers, and social media platforms are a natural extension for any DRTV marketing campaign. Social media is all about creating consumer communities around your product, which is something that DRTV marketers have been doing for years through the use of testimonials. Thus, social media is an excellent avenue through which DRTV marketers can highlight their success stories, showcase testimonials and create conversation amongst their consumers. DRTV marketers must be aware, however, that marketers no longer have the luxury of deciding whether to participate in social media campaigns. DRTV products are a target of social media and if marketers do not join in and attempt to control the conversation, the conversation will still take place. Savvy DRTV marketers should have a well-planned social media strategy to control the conversations and to protect the brand against negative social media commentary. A brand reputation program should be in the toolkit of every DRTV marketer before embarking on any social media program. Of course, DRTV marketers must also be mindful of the FTC rules regarding transparency and disclosure of material connections that apply to any social media campaign
Heroux: It has helped create more awareness. It has created a more personal point of view on the goods and services sold. But it’s still hard to measure the ROI on a social media campaign.
Koeppel: One, the ability to expand overall reach and awareness of products via various outlets that are trackable to sales; two, word-of-mouth marketing is becoming more prominent for all businesses, and social outlets allow the conversation to be nurtured with fellow brand advocates to help drive sales; three, with social media and SEO strategies colliding, it’s important to have good, consistent content on social channels to continue to drive traffic to the client’s website.
Lee: With the advent of a flourishing social media sphere, three of the biggest effects on the DR market include crowdsourcing, branding and promotions — all definitive signs of strengthened repute and ROI.
Leon: I still don’t see a qualitative correlation between social media, its growth and media/campaign success. It is a great tool for creative positioning of a product, but the sampling of many social media demographics may not necessarily skew parallel to the campaign target.
Medico: The biggest effects, as I see them are: the opportunity to cultivate a closer relationship with the consumer both between the brand and consumer, as well as developing a community of fellow “brand fans”; the ability to develop word-of-mouth and peer-to-peer campaigns/promotions that have exponential growth potential; and a “friendlier” way to introduce new products or concepts for consumer reaction.
Medved: Consumer ratings: social gives individuals a larger voice. A consumer on a mission motivated by emotion, whether good or bad, can impact a brand. Next, the feedback loop: in the past, marketers had to conduct research to learn more about their product and what consumers thought. Now they can follow the conversation and get dynamic feedback on a large scale. It’s priceless if they use that information to improve their marketing and business practice. Finally, it’s an emerging sales channel: Dell (a very large DR marketer) is transacting through social media sites like Facebook.
Netzley: For many marketers social media has elongated their sales cycle as consumers look to gather social inputs and engage in dialog about the product/brand prior to purchase. Social media has forced DR marketers to keep an ear to the street on a constant basis in order to monitor comments/blog posts/Tweets and ratings of their goods and to assess the impacts of these social comments. Also, it has made marketing more expensive for DR marketers. Gone are the days when a spot could lead to a phone number or a single website. Now, marketers must also create, maintain and promote all of their social channel offerings as well. Ultimately, however, with the emergence of social commerce, social media will move from being an investment to being an ROI machine for DR marketers.
Orsmond: Yes, Twitter usage can be awesome! In fact, so are Facebook, YouTube, Google+, Pinterest and many other social media platforms. In Europe, Twitter has about 24 million U.K. accounts, followed next by Spain with 8 million (by comparison there are about 108 million Twitter accounts in the United States). Every DR business should include social media as a vital element in its strategy to attract potential buyers or increase interest. We recently did some research that confirms that media savvy U.K. consumers — after seeing your DRTV ad — will go first to your website and check out what you have to say, then next open your Facebook page to see what’s going on and also what others are saying about your product/service. In the U.K., we still find that the majority of DR companies are unable or not willing to commit sufficient budget to social media, which is like saying marketing is important but can we just leave that until after the product/service has started selling. DR marketers need to hire professionals to take care of this side of their business and not just concentrate on short-term sales.
Savage: Initially, as part of the selling and transaction process, marketers have to plan for more comprehensive research by consumers online. Social media is now a critical aspect of any integrated marketing plan. Marketers must also understand that social media can improve conversion and overall results by providing additional education, especially on more expensive and highly considered products and services. Finally, poor products with good marketing may have initial success, but consumers will have the final say on a product’s success by sharing information online
Stacey: The three biggest effects of social media are: you better have a good product because people can now tell each other; you better have great customer service for the same reason; and, if designed properly, social media allows you to start a conversation and get the word out about your product utilizing all the social tools, such as Facebook and viral videos.
Has the influence of mobile marketing on the industry grown in the past 12 months? How will the expansion of mobile affect DR in 2013?
Garnett: I don’t think mobile, as a unique category, is leading to any mass impact that will dramatically shift the business. In reality, it already is in play with the way consumers prefer mobile commerce — using the browser on their smart device. Is there a non-browser-based mobile play that offers dramatic sales impact? I’m doubtful. That being said, there are certainly apps that companies can use to deliver value or as part of their added value in offers. So mobile seems to deserve only a limited focus.
Goldstein: One of the hottest areas of growth for DRTV marketers will be the use of mobile. Mobile marketing is a natural extension for DRTV marketers because it affords marketers the opportunity to carefully target consumers and to offer incentives directly at the point of purchase. In addition, marketer-based mobile apps provide a new and creative vehicle through which DRTV marketers can connect directly to consumers and potentially showcase product/service benefits. As DRTV marketers begin to embrace the use of mobile, however, they must be mindful of the many rules and regulations that govern this form of marketing.
Heroux: Mobile marketing has certainly received a lot of attention lately. In reading a recent article that stated that laptop sales (and obviously desktop sales) are on the decrease, tablets and smartphones are fast becoming important vehicles for campaigns to maximize consumer reach. That being said, conversion rates on smartphones and tablets are trailing conversion rates compared to other marketing channels and still need to improve greatly.
Koeppel: Total mobile advertising spend in the U.S. will jump from $1.34 billion to $2.01 billion in 2012, according to projections from mobile buying platform adsMobi. Worldwide, there is a potential increase of mobile ad spend to about $14 billion by 2014. During the next year, while technology is always at the forefront, it is more about how technology adds additional channels where consumers can shop. This is changing the DR world into more of a DR branding strategy. Many marketers are struggling for ways to reach new customers for less money, and multi-channel marketing is one of the most effective ways. A consistent brand message as part of the strategy will be the tipping point for direct response marketing — not only next year but for the foreseeable future. In 2013, we will see more integration of mobile, social, online and offline media and improved tracking of results in the DR space. In addition, expect to see more compelling content and improved ability to customize messaging with mobile.
Lee: Mobile marketing has continued to expand in the past 12 months, as the ever-burgeoning pathways of digital engagement can be streamed onto both smartphones and tablet devices. Particularly, DR marketers have begun noticing the advantage of using mobile for local campaigns. Since mobile is an on-the-go apparatus, to be used at any time and place, the value of customizable ads relating to temporal and geographical space is dynamite. In 2013, DR can expect to continually see the integration of multi-channel strategies being filtered down into one crisp, savvy mobile device. The expansion into 2013 will also be enhanced by psychographics. Statistics show that a large percent of ethnic consumers purchase only through smart phones.
Leon: It has grown over the past 12 months for established products and services, but still needs a higher profile once a campaign is launched. Mobile marketing will be a great influence in retail-driving campaigns, and if mobile applications can quickly generate a sale by placing the user’s location, it will gain significant visibility in a marketing strategy.
Medico: The growth of mobile in past 12 months has been remarkable, and I believe that mobile marketing will be the hottest topic in the next 12 months, growing exponentially given the prevalence of smartphone and tablet technology
Medved: The influence of mobile marketing on the industry really represents an opportunity to regain an increasing degree of order attribution to specific media airings. At a time when the 800 number is losing relevance, the introduction of a unique short code/keyword combination is a modern-day game changer. Combining the emerging technology with tried-and-true benefits of a unique tracking device, short code/keyword combinations allow media agencies better metrics through which to measure the effectiveness of the media as well provides marketers the ability to really understand how each distribution channel is affected by their advertising, resulting in stronger campaigns. They say knowledge is power and the ability to more fully understand where our orders are coming from will only allow us to further maximize our budgets and performance.
Orsmond: There has been a substantial increase in the number of financial services DRTV ads carrying a mobile text message such as “Text WIN to 80200” in Britain. This is most evident with debt consolidation DRTV advertisers that are using “text” to speed up response from consumers who are desperate for help to sort out their personal financial problems. With the greater use of smartphones, we are finding that switched-on clients are making greater use of mobile video content, which is proving very successful with the 14-24 age group. Today, more than a quarter of adults and nearly half of all teens now own a smartphone in the U.K., while 37 percent of adults and 60 percent of teens are “highly addicted” to them. The vast majority of U.K. smartphone users (81 percent) have their mobile switched on all of the time, even when they are in bed. Fifty-one percent of adults and 65 percent of teenagers say they have used their smartphone while socializing with others. But what I found encouraging with this latest Ofcom Communications Report is the resilience of TV. Despite increasing use of the Internet and an explosion in the range of mobile devices available to access media and communications, TV viewing actually increased between 2000 and 2011, with viewers currently watching more than five hours a day!
Stacey: We are not very active with mobile except that we now put QR codes on all our retail packaging so people can play the video by clicking on the box with their smartphones. We have been watching closely the activities of some of our key international partners in markets like Japan where mobile marketing is playing an increasing role in their multi-channel marketing strategies, as this is no doubt going to be a critical channel in the future of our business.
What are the three biggest no-nos for a marketer using a measurable, multichannel strategy in 2012?
Garnett: On one hand, marketers from a traditional DRTV world must become comfortable with less well-defined measurements. While, for example, every phone call can be tracked to the media that generated it, with the Web only a small portion can be firmly tracked and retail allocations to media are even less absolute. This is uncomfortable for an industry that loves to claim it knows “everything.” On the other hand, traditional marketers need to learn the appropriate use of the new response measurements available with DRTV. They need to respect them — and rely on them. Using these numbers can double or triple the impact of each media dollar. At the same time, I’ve found some traditional marketers try to make too much of these new measurements. In reality, the multi-channel market is beautiful and far more powerful when you have a base of DRTV tracking/accountability. But multi-channel success requires avoiding a key measurement trap: You must be comfortable with the reality that some of the impact of a campaign must be estimated and can’t be known with certainty.
Heroux: Marketing channels do not have all the same impact at retail sell through. Marketers need to realize that not all products are suited and need to or will succeed in all marketing channels. Lastly, when using a multichannel approach, results can be easily measured incorrectly. Marketers need to look at the numbers very closely.
Koeppel: Not integrating the various channels to maximize conversion; not understanding how each channel impacts direct and retail sales; and not employing each channel correctly — especially social and mobile, which are becoming a more important component of DR campaigns.
Lee: The first big no-no is to try “being everything to everyone.” Developing a target audience with crisp messaging is the only way to create a special niche and competitive edge where you truly fit in the DR industry. Here, split testing is a definite benefit, because it’s easy to execute and increases marking success with ease. Next, it’s a surefire mistake to have different looks on different channels. If you want to be remembered and sought after, brand consistency is essential. Lastly, never take popularity over prestige: do not spend money in places that risk your company’s reputation. Your image speaks for your company better than any SEO strategy can, so never spend your money, time and effort in areas that are hurting your brand status.
Leon: There aren’t three no-nos — simply one: not understanding the online response and attribution back to the media platform. It is now as important as media buying, planning and creative strategy.
Medico: I have four: no dis-unified creative; no uncoordinated timelines; no inconsistent offers/CTAs; and no dis-unified tracking and reporting.
Medved: First of all, don’t lose sight of what drives the bulk of your business. It’s tempting to over-invest time and brain power with hot new marketing channels that don’t deliver scale. Second, embrace new opportunities. If your strategies are not moving forward, your business will atrophy. The multichannel landscape is escalating in its evolution. Finally, don’t just set it and forget it. Experience what your consumer sees. For example, mobile sites now drive a considerable percentage of orders for many campaigns, yet numerous marketers don’t even optimize their site for the two major mobile platforms.
Netzley: First, stop telling the same story across multiple channels. Use the channels in a manner that is synchronized, coordinated and aligned in order to tell a deeper, richer story that closes the sale faster and is channel specific. Next, be mindful of the use of vanity URLs and 800 numbers and the significant tradeoff that will be required from a media optimization perspective should traditional tools of the DR industry be abandoned. Finally, remember that the consumer, despite all of the advances in technology and the sophisticated cross-sell/upsell tools and algorithms that have been created, is still looking to solve one problem with the solution being presented. Some marketers are guilty of losing sight of the initial sale for the follow-on potential and that will cost them in the end.
Orsmond: The biggest no-no for me is when I find that a DR advertiser has appointed a media buying agency that is tied to station deals instead of buying media avails on a client by client basis; does not have a deep understanding of what makes a DRTV ad work harder by having an in-house creative capability; and cannot offer bespoke campaign tracking and analysis reports on a daily basis.
Savage: First, you cannot differentiate the DR offer from the retail offer. Next, you can’t afford to not have a comprehensive online marketing and social media strategy. Finally, not having daily visibility into how and from where your media investment is driving leads and sales can be fatal to a campaign.
Stacey: The three biggest no-no’s are not using multi-channel to begin with, not measuring each channel properly, and not having a strategy that ties them all together into an aligned force behind a common objective.
What vertical markets are best equipped to survive — and even thrive — in 2013?
Garnett: Focusing on our specialty, clearly tools and hardware are well positioned for the coming year. Recent dramatic successes, like the Kobalt brand campaigns from Lowe’s, have proven once again the power that DRTV brings to the category.
Heroux: Marketers need to continue to chase innovation. Consumers are smarter and have more access to information. What marketers need to offer them needs to be absolutely unique, needed, affordably priced and have mass appeal. Money-saving propositions, as well as problem-solving propositions, will continue to thrive in this softer economy.
Koeppel: Verticals related to healthcare and beauty targeting the senior and Boomer markets are most likely to thrive in 2013. As the population ages, these target markets watch the most TV, can be reached more easily through lower-cost daytime media, use DVRs less, are often empty nesters with more disposable income, and are the most responsive to DRTV, so they are prime markets for campaigns that targeted to their needs. Also keep in mind that in the past 12 months 47 percent of consumer goods and services were purchased by people 50 and older, which translates into $2.7 trillion, according to AARP.
Lee: Health and fitness are still the dominant vertical markets to thrive in 2013. With today’s “can’t-stop-won’t-stop” consumer mentality, on-the-go customers constantly desire the time and patience to restore happiness, healthiness and fitness. Direct response is the key to unlocking consumers’ earnest wishes within the most fast-action marketing environment, guaranteeing breakthroughs in wellness with the most high-speed results.
Leon: Retail-driving campaigns and customer acquisition campaigns.
Medico: The financial services sector, E-commerce-driven shopping sites, and educational and vocational training services should be strong.
Medved: We hope they all will, but the established categories — fitness, health and diet, home goods — all should do well.
Orsmond: The strongest vertical DR market in the U.K. has always been the financial sector, with annual media budgets increasing exponentially every year. The PPI mis-selling scandal is likely to run for several years to come, and media spend to generate leads dominates the DRTV sector here. U.S.-style Infomercials, however, continue to generate substantial revenue (upwards of $725 million per year) in the U.K. for clients such as Guthy-Renker, JML, Beachbody, Early Advantage and others. The strongest selling product categories on UK TV screens remain beauty-and-wellness and health-and-fitness.
Savage: Housewares and kitchen solutions continue to be popular, and there is no doubt that health and wellness products and services targeted at the boomer and senior demographics are poised for continued success.
Stacey: The vertical markets that continue to survive are the categories that have worked in the past – fitness, beauty and household items.
Measured short-form DRTV media is doing quite well compared to other outlets, including digital, according to recent industry research. To what can we attribute that comparative success? And what can long-form DRTV campaigns do to emulate it?
Garnett: This success is due to a few key influences. First, it’s far cheaper to test in short-form, so many marketers are entirely willing to give up long-form’s higher profitability and complex products in return for lower risk. Second, it’s the natural starting point for traditional brand manufacturers, since short-form looks and smells so comfortably like traditional TV advertising. Finally, with retail distribution, products that would have traditionally started in long-form are able to eke out reasonable success in short-form. I don’t think long-form needs to emulate anything different about short-form. Instead, long-form needs two things. First, it needs the economy to recover. With a stronger economy, more companies can afford the risk in search of long-form’s higher reward. Second, as an industry we need to recall the long-form value: driving sales volume for more complex, more interesting and higher margin products. Fundamentally, we need to remember that short-form works only for a highly restrictive type of product. And to recall that long-form has tremendous profit advantages — after you’ve made the investment.
Heroux: Measured short-form DRTV media is doing better because traditional marketers are comfortable in that space. Over time, I expect that to change as consumers’ buying patterns shift.
Koeppel: Short-form DRTV has the advantage of running in targeted programming where there is a larger viewing audience vs. long-form, which is typically accessed by viewers that are channel surfing. With the consumer’s attention span getting shorter, due to media fragmentation and media overload, short-form is better suited to grab the viewer’s attention in today’s media environment. Short-form also works well with the Web, where consumers driven online through a short-form spot can further educate themselves about a product or service, before making a purchase or filling out a lead form. Long-form shows can be broken into smaller segments with more CTAs to better capture the consumer’s limited attention span. Long-form shows can also employ the short-form strategy of pushing consumers to the Web, allowing them to access more information about a product or service more rapidly, without having to watch an entire show.
Lee: With a market still stuck in the deep ditches of our cyclical macro-economy, how does short-form DRTV succeed? It does so with its convenient positioning. In times of economic uncertainty, customers are less likely to buy off the retail shelves in brick-and-mortar stores. However, such cautious customers are not futile to the economy: instead of going out to shop, they are at home watching TV, where lower prices, discounting, deals and convincing promotions are more striking than ever before. Particularly in a year stocked with the Olympic games and a presidential election, short-form DRTV is evermore prevalent to the consumer eye. To best emulate the selling qualities of short-form DRTV, long-form should provide a clear, convincing and quick CTA. In addition, the company’s phone number and/or website address should persistently headline the screen as it does in short-form ads, in order to drive the compelling conversions found in today’s short-form approach.
Leon: Short-form DRTV has rebounded and has been doing extremely well in 2012 because many cable network properties have invested heavily in original programming and drawing a big audience from the traditional broadcast networks. Also, many campaigns have converted to using heavier 60-second creative length allocations because it is a big driver to Web response, where conversion is strong. Digital-marketing-only campaigns remain a strong platform, but it has become far more competitive and the 300-percent to 400-percent ROIs are no longer achievable. Affiliate marketing has also diminished the value of keyword searches and micro-site traffic. Long-form campaigns will have to recognize the importance of driving more response online. There still is a heavy reliance on phone and direct sales, making it harder to make long-form work unless there is a significant back-end to support a strong, but delayed, ROI.
Medico: The relative success of DRTV can be directly linked to TV viewership. This is most likely due to the fact that consumers’ discretionary spending is down, and TV has become a more popular form of entertainment — more viewers mean more opportunity to sell. For long-form, the higher priced promotions will have a tougher time given the state of the economy and the inability to expand into higher-rated dayparts.
Orsmond: Short-form DRTV is morphing into BRTV, and this trend is continuing in the U.K. as DR advertisers realize retail is the Holy Grail, doing their best to use TV to drive footfall into the stores that sell their products. To do this effectively, you do not need a 120-second ad and can instead run many more 30-second BRTV ads that create a lot of consumer interest. Retailers like to know you are spending dollars to create a buzz about the product, and BRTV is the best way to do that when combined with a strong social media platform. Long-form DRTV in the U.K. will always suffer from stricter broadcast regulation (you can’t sell many dietary or weight-loss products for example) and because of the way the airtime continues to be sold here.
Savage: Despite the continued fracturing of audience by the proliferation of channel options, there is no medium like television when it comes to informing consumers and driving interest across all media. Short-form can be bought against a demo, but long-form can achieve even greater utilization by marketers when they understand the audience viewership levels it drives and how that drives retail.
Stacey: Short-form works because it is usually part of a larger retail campaign. This allows some marketers to take less on TV and make up for it on retail orders. Long-form is not always as efficient in driving retail, so it often has to perform on its own, which is increasingly difficult in the current media environment. In addition, the audience attention span is short so these days you have to cut through and deliver your message fast.
Given the current state of the DR industry, what would you change to ensure its continued health and growth?
Garnett: It’s all about consumer trust. And that means we need to become honest with ourselves as a business. Unfortunately, I’ve run into some long-time practitioners who proudly tout exceptionally unethical practices. Sometimes it seems that decades abusing consumer trust has led too many in the industry to lose their true sense of what it means to deliver good product, for a good price, and back that product up.
Heroux: Marketers need to continue to innovate, and the industry needs to develop more accurate ways of measuring results in marketing channels where data is harder to measure.
Koeppel: The industry needs to continue attracting more Fortune 1000 marketers who have seen the benefits of accountable advertising online and may now be interested in utilizing a similar approach with their offline media. The industry can accomplish this goal by continuing to educate these marketers about how some of the biggest brands are successfully employing DR as part of their marketing strategies. In addition, the industry needs to make sure that there is a steady stream of innovative products and services being introduced into the DR marketplace. This will help us to continue to attract consumers who are looking for breakthrough products and services that save them money and improve their lives.
Lee: Sure, we’d like to see the economy take a turn for the better — that is, a lot better — but it’s important to remember that adaptability to evolving times and changing technologies is our only key to survival. As the saying goes, the only way is up. If we are to embark into 2013 with continued health and growth, we need to remind ourselves of the most simple business practices to always abide by: remember the past, think ahead — but most importantly — act now.
Leon: The long-form DR industry needs to identify a way to drive stronger online sales. It must overcome the fear of change and launch new campaigns and products with shorter, but effective creative. The short-form DR industry is robust and will continue to grow with the growing cable networks, syndicated programming and quality programming. Audience delivery and consumer behavior tied to cable networks has improved, and agencies are effectively executing campaign strategies to match both.
Medico: Our agency has seen a steady, even explosive growth of digital media, and if we are to survive as a business we will need to adapt. As an industry, we need to become early adopters’ of technology and invest in its growth.
Medved: The direction in which technology is moving poses a threat to the entire industry. We exist because viewers are bored and searching for entertainment. Viewers will soon search for and engage with content in a way that could easily exclude that DRTV interruptive effort. As an industry, we are thinking about how to adapt to the new platform of engagement, where length of message and the places where we present are very different than how we engage consumers today. What will ensure our continued health is the same creative entrepreneurial spirit that has kept us resilient for decades.
Orsmond: In the U.K., it would be to throw out the old DR way of doing things and to embrace a multi-media strategy from day one. The world is changing fast, and the young consumers of today are quickly abandoning the buying habits of their parents. The future spoils will go to those more savvy DR companies at the forefront of the media usage revolution.
Savage: We need increased consumer confidence and more Americans working.
Stacey: I am not sure I would change anything except to be responsive to changing because change seems to be the only constant in this business. We are not changing for the sake of change; we are changing because we have to in order to thrive. There are two types of change — proactive and reactive. Our industry is having so much change imposed on it with everything from Chinese knock-offs to the introduction of 1000 TV channels that you sometimes find yourself spending a lot of time just reacting to changes coming at you externally rather than creating the changes you want.