The campaigns are also seeing a dramatic shift in consumer spending to the Web. The question is: how do the kings of accountable, ROI-driven advertising retain their crowns in a Web 2.0 world?
To figure it out, Response spoke with a few leaders in Internet marketing with a direct response focus, and the discussions varied greatly.
“The great thing about online media is that, if managed properly, it’s 100-percent measurable,” says Mason Hewitt, El Segundo, Calif.-based Vantage Media’s director of business development, who was recently named as one of DM News’ 30 Direct Marketers Under 30. “Marketers should know the exact number of searches that take place for their product, regardless of whether they make a sale or not. Once they do make a sale, they should know exactly how much they spent online to capture that sale. But, just like TV advertising, the key is to get found. So, having a paid search, organic search and online public relations presence is exceptionally important.”
Fairfield, Iowa-based Hawthorne Direct utilizes a unique URL approach to track the online response to their campaigns. “We use unique on-TV-screen URLs that are ‘hidden’ from search engines,” says Aaron Raymond, the agency’s director of digital and interactive. “This enables us to measure the first ‘blast’ of DRTV-driven response to that site, which only DRTV viewers will see. Of course, as the DRTV campaign matures, viewers will often find this Web site via additional digital campaign channels like paid search, display ads and affiliate marketing. Using statistical deviations from baseline traffic patterns, we can begin to assess the impact of DRTV viewing on all visitors to the site. Then it is important that online and offline results data be integrated into a single reporting system, ensuring that they’re tallied and compared as a single campaign.”
Ken Osborn, CEO of Bridgeport, Conn.-based Liquid Focus, recommends using a good E-commerce platform that includes real-time reporting analytics that show geo-targeting, direct memory access (DMA), IP, time of day and other data points to help marketers link online sales to the offline ads. Ironically, E-commerce solution providers are sometimes met with apprehension and even resistance from traditional DRTV marketers.
“It’s a shame. I can count on one hand how many clients — and their agencies for that matter — actually use the information we provide them to evaluate what is happening with the offline campaign,” says Osborn.
If an order came from the Web and the cost is zero and if it came from the call center and it cost a few dollars or more, Osborn wonders why more marketers wouldn’t want that order to come from the Web?
“A few years ago, online response accounted for only a very small percentage of most DR companies’ overall campaigns,” Hewitt contends. “Today, online generally accounts for between 30 and 75 percent of our clients’ overall sales and in some cases, 100 percent.”
But, before that online sale occurs, a consumer needs to reach the product’s Web site. And the way in which they get there can vary.
From Calls to Clicks
Consumers today may be more apt to type your product’s URL into their Web browsers as opposed to picking up the phone. According to Pew Internet & American Life Project, 75 percent of online users are now buying products online. If they can’t recall the URL displayed during the spot, chances are they’ll go to one of the major search engines.
“Another reason people type the name into the search engines is because many consumers don’t understand the difference between their address bar and their search bar,” says Osborn. And search is an entirely different ballgame.
Johnny Mathis, CEO of Livemercial in Valparaiso, Ind., says, “If a consumer directly types a URL in a browser for their first visit, it can be assumed that the sale was driven from an offline source, and that source should be credited in full for the sale. However, a search engine can be viewed as a competitive marketplace. Once on the search engine, the consumer is still likely to shop your competitors.”
He continues, “Having a strong SEM and SEO campaign works as a form of pull advertising and should not be forgotten when considering who gets credit for a sale. The demand for the product already exists, but the advertiser needs to close the deal before their competitor does by shaping the most effective SEM and SEO strategy possible.”
Vantage Media is working closely with many of its clients to develop models that attribute offline media spend back to online searches and, ultimately, sales. “The key is overlaying offline media spend with online impressions, clicks and conversions. As media spend and ad messaging varies throughout the year, the effect on online performance becomes increasingly apparent,” says Hewitt.
Hawthorne Direct has found similar results. “Despite the inherent uncertainties of tying online search traffic to offline media driving it, there is rich online demographic information available from IP numbers and search membership. In our Web campaigns we have seen powerful confirmation of TV driving search and also how online site conversion, PPC conversion and general online performance increases as TV media budgets increase,” says Steve Kelley, chief technical officer of Hawthorne Direct.
When specifically tracking online response to offline engagement, Kelley says that unique URLs can provide relatively good measurements. For example, offline creative A’s URL performed 10-percent better than offline creative B’s URL.
Osborn, too, came back to incorporating unique URLs for different spots, comparing it to the response generated by many popular mobile initiatives. “This is just like texting: ‘Text 65654,’” he says.
Conversely, Hewitt actually advises against the unique URL strategy. “Only a small percentage of viewers will remember the unique tag, with the rest remembering only the brand name or top level Web site. The unique offer tag only serves to confuse viewers and takes away from the brand value,” says Hewitt.
Beauty and personal care products earned more than $10.5 billion in revenue last year. But while it can be a lucrative business, it can also be tough to capture market share. It’s estimated that women see about 400 beauty advertisements in a day, so the challenge for any product in this space is to stand out and deliver on its promise. As many successful marketers have discovered, direct response is a powerful tool for building brand awareness, demonstrating the effectiveness of a product, and putting the power of conversation into the hands of the consumer.
Today, those working to market beauty and personal care products are at the forefront of the use of digital tools to drive consumer response — and have found great success in two emerging channels: online social media and mobile marketing.
Perhaps one of the most well-known names in DR beauty products is Murad. Based in El Segundo, Calif., the skincare brand was founded by Howard Murad, M.D. Last year, the company earned industry-wide recognition for its long-form DRTV campaign for its Acne Complex product. Now, it’s touching up the campaign for the second quarter and introducing new ones for its other products.
“Direct-to-consumer is 50 percent of our business, which is big growth from 2003, when it was in the small double digits,” says Carey Grange, executive vice president, direct-to-consumer, Murad. The company’s multi-channel marketing plan includes television — both long and short form — online, print and catalogs. The idea is to utilize an integrated approach to reaching customers for both forming and maintaining a relationship with customers.
“We want to engage our customers and educate them,” says Grange. “We’re monitoring customer behavior and building logic for action point.”
Last year, Murad launched a new campaign for its popular Resurgence products, a line geared toward the issues associated with aging. The infomercials feature former national morning show host Joan Lunden and, more recently, pop star Debbie Gibson signed on as a spokesperson to attract women in their 30s and 40s — younger than the typical Resurgence user. “We want to reach the Generation Xers, whose skin is changing,” says Grange. “And we’re mirroring this touchpoint strategy for the Acne Complex.”
Grange was excited to talk about a long-form commercial — soon to finish testing — for the Environmental Shield line of products, one of the top brands in stores such as Sephora and Ulta. The products target Gen-X women, so Murad is “excited about having a TV presence for each phase of a woman’s skin life,” says Grange.
The Acne Complex is geared toward women in their 20s and Resurgence traditionally has been for women over 45. The new show will be hosted by actress Josie Bissett and feature Olympic volleyball gold medal athletes Kerri Walsh and Misty May-Treanor. “Our goal is for our direct business to drive brand awareness and drive through retail sales also,” says Grange. “The goal is also to have formed a relationship with a woman that will last throughout every stage of her life.”
Branding Through DR
Smart for Life is a diet and weight-loss plan that hit the market about six years ago with physicians in weight management centers. Today, there are 40 centers throughout the U.S. and Canada. Through their experience, Richard Kayne, chief operations officer, and the company’s founder, Sasson Moulavi, M.D., realized that 85 percent of weight loss is do-it-yourself, and people don’t have the time or the money to visit offices to control weight. So, two years ago they changed their focus and launched the Smart for Life Cookie Diet with a television spot. Today, the company makes about $70 million annually — mainly through selling meal replacements — and is growing.
Though now branching out into brick-and-mortar retailers, such as Costco and major food and drug stores, Kayne says that DR sales are still a major part of the product’s success and is what helped build the reputable brand. “I see DR as a launching pad for us. We manipulated and used dollars appropriately and hired the right people in the industry that know how to say it and how to present the message,” he contends. “It opened the doors to brick-and-mortar, and it created great brand and name recognition for Smart for Life.”
The company also recently launched underWAY, a 16-oz. beverage that is an appetite suppressant that contains fiber and maintains glucose and cholesterol levels. Endorsed by actress and model Brooke Burke, underWAY has given Kayne’s business full integration in the personal care vertical. The product launched with a 30-second branding spot, similar to the ones that have been successful for Smart for Life.
In February, Dove, the personal care brand known nationwide as the No. 1 wash brand, launched Men+Care, its first-ever product line formulated specifically for men. Dove, manufactured by Unilever, aimed the new line at men who are comfortable with themselves, but not in their skin, while celebrating unsung moments along the journey to comfort.
Where best to launch this idea than in a spot during Super Bowl XLIV. The 45-second commercial is a montage of scenes — set to the “William Tell Overture” — depicting men who have reached a point in their lives when they are comfortable with themselves, but not in their skin. After the launch, the commercial went on to air in several media roundups and the brand invited consumers on Twitter and Facebook to participate in the campaign by sending in their “unsung moments” via photo, video or text.
Although a men’s line is new for Dove, the brand is no stranger to consumers in the U.S. In fact, one in every three households in the U.S. uses a Dove product, which includes beauty bars, body washes, deodorants, hair care and more.
Also no stranger to the brand is Kathy O’Brien, the vice president of marketing for personal care at Unilever for the United States — also known as vice president of skin — who has been with the company for 20 years. Working out of the Unilever North American headquarters in Englewood Cliffs, N.J., she is responsible for marketing efforts across brands like Dove, AXE, Caress, Lever 2000, Suave, Vaseline, Pond’s, Q-tips, Degree and Sunsilk.
Prior to her current role, O’Brien served as marketing director for Dove, where she was responsible for building brand equity and executing brand activation plans nationwide. Before that, she spent three years as the North American brand development director for “all” detergent. During her tenure with Unilever, O’Brien has had the opportunity to move between groups and gain a greater understanding across disciplines.
“I made the move from sales to brand marketing and loved it,” she says. “I felt like the work was not only interesting, but challenging. I enjoyed what I was doing so much that I turned down an opportunity in sales to stay in brand marketing. No two days are the same — I knew I would never be bored.”
An Integrated Approach
Integrating direct response marketing campaigns into brand awareness was a no-brainer for O’Brien and Dove, as Unilever bases its foundation of success on world-class innovation and consumer insight — listening and understanding consumers’ needs and developing products to meet them. “Any time we can build programs that engage direct with consumers, that only sets us up for more success.” O’Brien adds, “None of our campaigns can rely on one type of engagement. We rely on various communication vehicles including advertising, public relations, Web sites, events, films, social media and more.”
Bookending historic second- and third-quarter results, fourth-quarter 2009 long-form DRTV media billings mirrored 1Q 2009 results, experiencing a 1-percent bounce back, with the total of $275,230,400 reflecting a $2.6 million jump compared to the same quarter in 2008. This is the first growth reflected during a fourth quarter since 2006, but the results are still lagging more than $50 million behind that record 4Q.
Total 2009 long-form media spending was $1,108,578,500 — down 5.5 percent (more than $64.5 million) from 2008’s total. This year’s overall loss was similar to 2007’s year-on-year decline, both in dollars and percentage. Still, after the year’s second and third quarters featured record-low pricing on 30-minute buys (and the resulting record number of timeslots purchased in each quarter), it must be heartening for both sides of the media industry to see a solidification of the market. The price of long-form media rebounded slightly, but the number of timeslots purchased was barely affected, compared to the results of earlier quarters in 2009.
Housewares, Health and Home Lead Winners
Ten of the 15 measured categories reported gains in 4Q 2009. The “Housewares and Appliances” category was the biggest dollar gainer, adding $21.5 million (60.2 percent) to its 4Q 2008 total to become the quarter’s strongest category. “Health and Fitness” ($5.7 million) and “Home and Garden” ($3.4 million) rounded out the top-three dollar gainers. The “Automotive” category, while one of the smaller overall categories (totaling just more than $2 million), earned the highest advance based on percentage, more than doubling its money from 4Q 2008. The “Sports and Outdoor Activities” (59.4 percent) and “Music and Video” (48.8 percent) categories also enjoyed healthy gains.
The “Other” category was the quarter’s biggest dollar-on-dollar and percentage loser. After jumping up $24 million in 4Q 2008, the category lost that and more, dropping $26.5 million (90.8 percent) in 4Q 2009. “Health and Fitness” lost nearly $5.7 million, while the “Electronics” category’s $935,700 drop made it the second-worst percentage loser, shaving more than 13 percent from 4Q 2008.
The national cable outlet bounced back strong from a tough fourth quarter a year ago, gaining more than $7.4 million (5.4 percent) and earning back 2.2 percent of lost market share. The broadcast outlet suffered a much smaller loss than in 4Q 2008, losing more than $8.2 million (7.1 percent). The satellite outlet had a great 4Q 2009, jumping up 17.7 percent ($3.4 million).
The time-slot onslaught continued, as 4Q 2009 saw 600,061 time slots purchased, an all-time fourth-quarter record, but only the third-highest quarterly total in 2009. The total represented a 39.8-percent increase over 4Q 2008. All three outlets were up sharply: national cable’s market share rose 0.8 percentage points, as 44,305 more time slots were purchased; broadcast enjoyed a 0.7-point market share bump to 68.3 percent, thanks to adding nearly 120,000 time slots; and though satellite enjoyed a 17.6-percent jump in total time slots purchased, its share of the market actually fell 1.5 points.
While the average cost of a half-hour block of time when measured against 4Q 2008’s $635.14 appeared to be in a 27.8-percent freefall — landing at $458.67 for 4Q 2009 — the number actually represented a stabilization compared to results measured in 2Q and 3Q 2009. In fact, fourth quarter was the first three-month span in 2009 that did not break the previous all-time record low cost for a half-hour. The 4Q figure lands between 1Q and 2Q 2009 measurements, bringing a stop to what had been steep price drops.
By Jacqueline Renfrow (firstname.lastname@example.org)
In the down economy, coupon use is increasing 26 percent year-over-year and while most of these coupons come from direct mail, 10 million digital coupons were redeemed in the first half of 2009 — a 25-percent growth from the previous year. One company at the forefront of the digital coupon revolution is Valpak, the familiar blue envelope filled with advertisements and offers that reaches 45 million homes and businesses.
In addition, Valpak.com offers more than 17,000 printable coupons, and through partnerships with Web sites such as Kudzu.com, customers searching on Valpak.com can view customer reviews and ratings for local service providers.
The 40-year-old national and local coupon provider refuses to get behind the times with the latest marketing trends. In fact, ahead of many in the channel, Valpak has put a large emphasis on digital in the past couple of years — taking digital from sideshow act to the main attraction in 2008. Working with parent company Cox Target Media Inc. — it started a cross-departmental team to pull it all together and push new products — Valpak officially moved from a print-only to a print-and-digital company, and in July 2009, the company decided to explore the mobile space.
First on the innovation scale came an iPhone and iPod Touch app in September 2009. Then came a platform for the Android Palm Pre in November and December, all of which can download the same 17,000 savings opportunities from the Web to a consumer’s phone. Also, in February, those that are a retailers/advertisers on Valpak’s digital products are also a part of 150 other Web sites that offer value to consumers, including coupon sites, value sites, mommy blogs, etc.
The partnership with other Web sites allows a Valpak advertiser to set up an XML feed into the partner’s site and when a customer prints the coupon, it is actually printed from Valpak.com. This overall strategy gives advertisers access to more than 32 million unique visitors per month.
“We have a national advertiser who in May 2009 averaged 2,900 prints a month, and now [since partnering with Valpak] averages nearly 5,000. So we believe it’s working,” says Jim Buckley, director of new media business development at Valpak.
About 12 percent of the advertisements sold for Valpak are national. In the print world, it’s about 15 percent national and the rest is local businesses. Online, the scales tip to 20 percent national and 80 percent local — as of January, the company had 26,000 advertisers in the Valpak mailer and 14,700 advertisers on Valpak.com.
Though the balance is still not a perfect match, the strategy is to become a combined digital and print solution for advertisers. Multiple platform advertisers are significantly better positioned to get results than a single platform advertiser.
“In our case, looking at our retention rates (over a 13-month period), we saw we retained a customer for a second cycle and our digital and print results are 5-to-7-percent higher when a customer runs on both platforms,” says Buckley.
From a strategic standpoint, Valpak decided to go digital so it could be accessible to consumers everywhere. So, if a customer is associated with a local offer, the coupon comes as a physical coupon in the mail and it will also appear digitally on the phone.
Buckley says the company has the holy grail: local content that an individual company needs to get consumers onto their platform. He stresses that Valpak is an application for the phone. For those technologically equipped, the phone itself is GPS capable — letting Valpak know where the customer is located — and then it delivers all coupons in that search radius. A customer can search anywhere from three miles up to a 25-mile radius. Buckley says it’s not about pushing a coupon on a consumer, but offering coupons in the realm of what they are searching for in that local radius.
Financially, Buckley sees an integrated package with Valpak as a relatively inexpensive buy for a marketer. For example, in Atlanta, an advertising partner can pay $400 a month and get all of the following: three digital coupons on Valpak.com with a link to the advertiser’s Web site and link to the print ad and social bookmarks; a Kudzu.com rating/review and profile page; presence on more than 40 Valpak partners and more than 86 of Kudzu’s partners, Google Mobile, Valpak Mobile and more than 125 Web sties; and a Valpak Smartphone Application.