Canada Basks in the Branded Response Glow1 Aug, 2009 By: Doug McPherson Response
The way Robin Whalen sees it, in the past year Canada has witnessed what she calls a "paradigm shift" in direct response marketing.
Whalen, who is a vice president at MacLaren MRM, a Canada-based advertising firm, credits four factors for the shift: media fragmentation, growth in social networks, content-on-demand and the global economic crisis. Yes, you read that last one correctly — the global economic crisis.
It seems the economy has exerted enough pressure to make a difference in how advertisers in Canada view that ugly stepchild: direct response marketing.
Lauren Hutton's line of makeup products, which have seen success in DRTV and home shopping in the United States, are also selling well north of the border.
"Our industry has seen a recent rise in popularity and interest," Whalen says. "The fundamentals of our business — data, measurement and analytics — are now needed everywhere."
The ShamWow's American success story has been replicated in Canada, via both DRTV and retail distribution efforts.
Whalen believes it's the new norm and fast becoming the new mass advertising. "Every brand demands results," she says. "Every business needs growth, and every campaign seems to be tied now to metrics of some sort or another."
She's seen virtually every category, from consumer packaged goods to financial services to the nonprofit sector, form a partnership between traditional brand advertising and classic direct response marketing.
Traditional short-form DRTV products, such as the Loud n' Clear, are taking the lead in Canada as long-form time becomes more scarce.
"Both sides of the communication world have come together to borrow on best practices and launch a new form of DR," Whalen says. "Direct marketers are learning how to leverage strategic planning and insights to develop creative that truly resonates with consumers."
The word that sprouts in this new fertile terra firma north of our border is opportunity. "Canada is witnessing a marriage of two traditionally separate worlds. What's evolving is a new practice of accountable marketing that takes the best of both sides and uses it to build brands, change consumer perception and — above all else — sell, sell, sell," Whalen says.
High-end vanity products, like the Salon Laser hair remover, still work well in Canada.
Good, Bad and in Between
Even if the door of opportunity for DR is opening in Canada, the country's DRTV leaders are still sharing a mixed bag of news — some good, some bad and some, well, is just news.
Eavesdrop on them and you'll hear these tidbits:
» "We're seeing more interest in short form"
» "Media rates are dropping"
» "There's a shortage of good infomercial time"
» "Response rates are dropping"
» "Strict regulations continue"
» "The government is investing heavily in digital technology"
» "Canada is a boutique market"
Certainly some of these sentiments may be echoed in the U.S., but make no assumptions: "Although we share much in common with our neighbors to the south, it's imperative to understand our roots," Whalen says.
Many Canadian DRTV experts say the framework of any successful campaign there starts with understanding the culture. Whalen has whittled down the culture to four key dynamics:
Born of diversity, Canadians champion an attitude of acceptance.
With a legacy of cooperation and compromise, Canada is a nation of people at peace.
Canadians place great importance on a distinct version of quality of life.
Part of an egalitarian society, Canadians expect to participate, not be led.
"If U.S. companies can tap into these notions, the possibilities are endless," Whalen says.
Know the Challenges
Despite the endless possibilities, these days Canada does present challenges to DR marketers. And according to Whalen, again the magic number is four:
1. Lack of cost-efficient avails. In both the short- and long-form arena, Whalen says it's tough to find availability for the traditional and successful two-minute spot, as well as 30- and 60-minute programming. Plus, Canadian advertisers have a smaller network of programs and stations to choose from. "To top it off, primetime programming tends to pull in poor response rates and is also inefficient from a cost perspective," she says. "This means media options are limited and advertisers often find themselves competing for scarce avails with not only competitors in their own category but other direct response companies." To combat the reality of media limitations, she says, Canadian advertisers must explore integrated media particularly by leveraging online opportunities such as space ads, sponsorships, contests and content.
2. Targeted messaging. Whalen says, "DRTV buys are based on cost-efficient avails on a spot-by-spot, station-by-station basis versus the more traditional gross-rating-point model. So stations can tell you who their average consumer is, but selecting shows based on absolute similarities in a client's demographic and psychographic makeup is not a reality for Canadian DRTV marketers."
3. Declining response rates. "Canada is no exception when it comes to declining response rates," Whalen says. "TV viewership is down, consumer trends and behaviors are changing." She and other DRTV folks in Canada believe TV is no longer the sacred direct response channel to sell product. She adds, "This places added pressure on other channels to fill the gap, while [...] clients are tasked with increasing the perceived value of their offers and media buyers are scrambling to pick up excess inventory," all at the same time.
4. Reduced flexibility in buying. "In the past year, we've seen a shift in network selling strategies with cancellation policies for DRTV shifting from one to four weeks notice, reducing the ability for DRTV to be responsive," says Whalen. "DRTV planners are faced with the difficult task of balancing the risk to budgets by being on poor-performing stations. Complicating matters is the fact that stations still retain the ability to preempt DRTV spots without notice."
Two more challenges are speed-to-market and national coverage, according to Richard Stacey, president and CEO of Northern Response International Ltd., a Canadian and international distribution and fulfillment firm for infomercials (and a member of the Response Editorial Advisory Board).
"Overseas manufacturers start offering knockoffs the minute a new show appears on the monitoring reports," Stacey says. "And American drift over airings can create a giant sucking sound in the Canadian market that invites competitive entry unless an American marketer is prepared internally or with a local Canadian distributor to roll out in Canada simultaneously in order to prevent losing the market altogether."
He adds that the Canadian marketplace continues to shift to a multi-channel market due to the changing technological landscape. "We're seeing more and more importance on using short-form and Internet strategies in combination with eventual retail placement," Stacey says. "The long-form shows are still an important part of many campaigns but have faced increasing headwinds from a continually fragmented and competitive media environment."
Rob Woodrooffe, president of Interwood Direct, a Canadian-owned direct response company, admits business has not been easy and that Interwood's numbers were "abnormally dismal" from October 2008 to March 2009. But he says the company has "re-invented itself [...] and the balance of the fiscal year looks more promising."
The task for the industry, Woodrooffe says, is to figure out how to drive traffic to Web sites and convert hits into orders.