Next Stop: Canada1 Oct, 2008 By: Doug McPherson Response
Experts weigh in on how American companies can best enter Canadian markets, plus plenty of other good tidbits you should know about what's happening in DRTV with our neighbor to the north.
Recently, Response spoke with five of the key players in the direct response television (DRTV) business in Toronto to get their thoughts on how Canadian DRTV is faring these days.
Those five are: David Baldassi, new business development manager at Northern Response Intl. Ltd., which distributes infomercials, DRTV spots and retail products; Patty Booth, president of Thane Direct Canada Inc., a DR and retail marketer; Ed Crain, president and CEO of Kingstar Media, a DR ad agency; Richard Stacey, president and CEO of Northern Response Intl. Ltd., and a member of the Response Editorial Advisory Board; and Rob Woodrooffe, president of Interwood Direct, a DR company.
Response: Some have said DRTV in Canada is in trouble — primarily because the market is overregulated and that airtime rates are rising substantially every year. What are your thoughts? And what does it mean to American companies looking to sell products in Canada?
David Baldassi, Northern Response Intl. Ltd.: The Canadian DRTV market definitely presents challenges today, but then what distribution channel doesn't? Rates are high relative to response rates, but that is not to say that it can't be a very useful distribution channel as part of a well-coordinated rollout that involves all channels of distribution. Rather than being a great profit center, it's now a useful medium in which to drive your other channels and back end. While the easy money is long gone, you can still turn a buck through Canadian DRTV — but you do earn it. For a U.S. company, it means you need to work with a company immersed in DRTV buying ... [to] get complete market coverage and move tonnage through all the various channels.
David Baldassi, Northern Response Intl. Ltd
Patty Booth, Thane Direct Canada Inc.: The impact of regulatory restrictions in Canada is that the quantity of infomercial avails is limited. With this limited supply of time, TV stations are able to keep rates high, and the rates do traditionally increase from year-to-year. What this means for American companies looking to sell products in Canada is that they probably need to reduce their expectations as to how much they will sell on TV in Canada relative to the U.S. DR time costs more in Canada and there are fewer people to sell to, so the usual expectation to sell 10 percent of what you will sell in the U.S. is generally not realized.
Patty Booth, Thane Direct Canada Inc.
Ed Crain, Kingstar Media: Media rates are up in Canada, but I don't think it's that different from the U.S. market on the big cables and specialties. After the election in the U.S., and with continuing pressure on general advertising budgets, I think the first quarter for DRTV in Canada and the U.S. is going to be excellent. It's true that raters got ahead of themselves in Canada. There has been fallout, but good offers and great products continue to do well. We've seen significant growth in both short-form and long-form dollar expenditures, although long form has been the more challenged format over the past six months.
Ed Crain, Kingstar Media