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.
Richard Stacey, Northern Response Intl. Ltd.: The Canadian DRTV market is a healthy one, but it's not growing like it once was. It's a smaller market and a crowded market, yet the availability of airtime is more restricted than in the United States. U.S. companies looking to sell products in Canada need to consider these market circumstances in their media and market planning. However, it's still a very lucrative market worth pursuing.
Richard Stacey, Northern Response Intl. Ltd.
Rob Woodrooffe, Interwood Direct: Broadcasting in Canada is still a regulated market next to the largest unregulated market in the world. It makes it difficult for all of us. Supply and demand really doesn't work. The broadcasters are protected ... that means media rates go up every year — whether we like it or not. What's the answer to over-regulation? Perseverance. The media companies are too strong — the government is reviewing the industry. And there may be changes coming, including an announcement in early 2009. Internet protocol television (IPTV) is probably the answer once it's connected to the TV set. It clearly opens up the choice and cannot be nearly as easily regulated.
Rob Woodrooffe, Interwood Direct
Response: Some American companies try to do business in Canada directly instead of using a middleman to help. What are your thoughts on the best way for American companies to enter Canada and be successful at selling there?
Baldassi: American companies are coming directly into Canada to buy media and, if their product has fat enough margins, it can almost compensate for part-time media buyers or paying too much for rates. Distributor margins have been always pretty thin, so going direct doesn't save as much as you might think. I still think that the best way for an American company to come into Canada is to use a distributor so they capture all the other revenue channels then funnel some of those profits back into DRTV to keep the media drive strong. If they want to buy some media direct, that's great, but make sure you work with a company that has a strong Internet, shopping and retail division.
Booth: Most of the infomercial time in Canada is sold on a long-term basis. As a result, the bulk of the time is locked up by a few direct response companies and media agencies. If an American company enters the market today, it might take several months — and possibly even years — to buy up enough infomercial time to make it worth their while. I know it took us more than five years to build up our media buys to where we are today, and you need to have enough products to rotate through the time to maximize the media time you own. If one product starts to wane, you need to have another in the wings ready to run profitably in that same timeslot. The upshot of all of this is any business breaking into the Canadian DR market will need to have patience, as it will take time to build up the media portion of their business. If they want to move quickly, they will need to work with an established DR company or agency that already owns significant blocks of DR time in Canada.
Interwood was responsible for bringing the American product Hercules Hooks to Canada. Now, the packaging is bilingual — in English and French — for Canadian consumers.