If 2009 was the year that advertisers pulled back and hid their heads in the sand, hoping that the recession would pass over quickly, then 2010 is the year that many of those companies will discover long-form DRTV as a viable and affordable adjunct to their traditional advertising.
“Long-form is one of the great opportunities this year,” says Doug Garnett, president of Atomic Direct in Portland, Ore., and a member of the Response Editorial Advisory Board. “During the recession, people stopped putting out the bigger investments required to create long-form, leaving an opportunity right now for people to jump in with new long-form.”
Rewind 12 months and the infomercial space was decidedly different. A sagging economy resulted in very few new long-form shows, and more budget-conscious marketers going into short-form DRTV. “Everyone basically went dashing off to short-form during the recession,” Garnett explains. “That left the long-form space fairly empty, and opened up opportunity for marketers to buy up the time and come out with new long-form shows.”
Tim O’Brien, vice president of business development at Seattle-based Cesari Direct, calls the recession a “double-edged sword” for the infomercial industry. Early-stage businesses and inventors have seen their funding sources dry up and credit lines frozen, he says, which means they have less money to roll out new shows. On the other hand, large brand advertisers are no longer carving off $20-$30 million for new product and service launches, and are instead being drawn to DRTV’s accountability and measurability.
“While one type of marketer is clearly shifting away and lessening its use of long-form,” says O’Brien, “another is more attracted to the DRTV model than ever.” Rick Cesari, company president, concurs. Reflecting on his last 15 years as a producer, Cesari says he’s never seen so much interest in both short- and long-form DRTV from Fortune 500 firms. “We’re fielding calls from these types of companies on a weekly basis.”
Drawing those brand advertisers to DRTV is a combination of budgetary concerns and a need for more accountable advertising methods. Add in the fact that many of these firms have finally broken into the direct-to-consumer model via the Internet, says Cesari, and infomercials become even more compelling for brand advertisers. “They realize the benefit of DTC (direct-to-consumer),” says Cesari, “and are figuring that if they can do it successfully online, they can do it on TV as well.”
Collette Liantonio, president of Boonton, N.J.-based Concepts TV Productions, is also seeing more interest from brand advertisers, many of whom “suffered when mainstream advertising took a hit” during the recession. She doesn’t see the trend waning, thanks to the “responsible return” offered by DRTV versus image-branded advertising.
“Brands are looking at an affordable intelligent return on investment and infomercials can produce an ROI that any brand company would appreciate,” Liantonio says. “Once they discover infomercials, there is no going back.”
Barriers to Entry
Getting marketers to consider long-form is one thing, but getting them off the fence and into (or back into) the game is something else entirely. Perception is a major obstacle, namely because many of these firms still assume infomercials will produce the same results they did 20 years ago. Back then, it was enough to put a 28.5-minute show on the air and sit back while the orders came in via telephone. “In 1990, you could release a long-form show and know that your TV sales would pay for everything,” Garnett says. “The rest of it was gravy.”
As marketers increasingly utilize online entertainment tools such as YouTube, social media and blogs as outlets for direct response outreach, one thing has become abundantly clear: The consumer is the star.
Marketing efforts big and small — from companies including Coca-Cola, Goldstar and Olympus — are focusing on user-generated content, choosing to spotlight consumers’ own creativity to successfully draw traffic and create buzz for their campaigns.
“It’s certainly a very powerful marketing platform,” says Petro Kacur, senior manager of marketing communications for Coca-Cola. “Allowing the creativity of consumers to come through is an incredible way to connect with people, let them share their experiences and also connect our brands to global events.”
Coke Gets a Kick out of YouTube
For Coca-Cola’s sponsorship of the 2010 FIFA World Cup in South Africa, the beverage company put its consumers front and center stage on a global scale. Integrating the campaign’s overall theme of celebration, Coke struck a 106-country, 29-language deal with YouTube in which viewers can upload videos of themselves celebrating a goal, as though they themselves have just scored during the World Cup, according to Kacur. Participants have the chance to win World Cup-themed prizes, including trips to South Africa to attend the games, free music downloads, big-screen televisions, video games and more.
Coke wanted its World Cup sponsorship campaign to capture that celebratory atmosphere that business executives saw firsthand in soccer fans during a trip to South Africa, Kacur says. The company believed giving consumers a creative outlet to showcase their own celebration was the strongest direct response marketing move and a sure way to most actively engage viewers.
“For Coke, we’ve learned the company really is the consumers behind our products. We want to give them an opportunity to connect with others, to connect with us and share what matters to them,” Kacur says. “Marketing strategies and campaigns like this have proven to be a very successful way to do that.”
Coke has incorporated user-generated content in various past promotions, but had never asked consumers to immediately respond on such a large scale as part of its marketing efforts, according to Kacur.
“This dwarfs anything we’ve done in the past as far as asking consumers to give us their own content,” he says. “Essentially this is a global online competition, and fans are constantly and consistently uploading videos of themselves to create a continuous loop of celebration online. We see this as a really unique and powerful way to connect with fans and people around the world.”
Consumers are uploading about 400 videos to the Coke YouTube channel (www.youtube.com/cocacola) each week as part of the World Cup video competition, which began March 5, and nearly 5,000 total submissions had been received by the beginning of June, Kacur says. “So far, we have exceeded 5 million visitors to the site. It is getting quite a bit of traction, and we believe we’re really just seeing the beginning stages of this,” he says.
With audiences spending more and more time online, Coke is always looking for new and creative ways to utilize that space, Kacur says. Providing a hub where consumers can spread their own creative wings — as well as interact with other Coke fans doing the same — has proven to be a great way to reach Coca-Cola’s target audience.
“We’ve been very happy with the turnout and it’s more than meeting our expectations in connecting with fans online,” Kacur says. “Digital strategy is very important. We know consumers are looking at YouTube and seeking to share their experiences, and we’re giving them an opportunity. I like to say, we fish where the fish are.”
Olympus Puts New Camera in Your Hands
For Olympus Corp., incorporating consumers’ creativity into its marketing was not only a smart move for the campaign in general, but also the most effective way to introduce a relatively new type of product to the marketplace, says Olympus Product Manager Sally Smith Clemens.
For the release of its new Olympus PEN E-PL1, a compact, mirrorless, interchangeable-lens camera offering image quality comparable to a DSLR, the imaging products manufacturer was faced with the challenge of educating consumers on the new technology without weighing down their marketing with a laundry list of facts. Olympus found a tremendous amount of options for explaining the new technology and drawing consumer engagement through online entertainment tools and DR advertising, Smith Clemens says.
Direct response marketing is very important to us, when we think about the traditional marketing funnel,” says Sue McManus, vice president of direct and customer solutions marketing for Columbus, Ohio-based Nationwide, one of the United States’ largest diversified insurance and financial services organizations. “We are constantly balancing our mix of advertising between brand awareness and DR. As we look at DRTV, paid search and other types of direct response, they’re earning an increasingly significant portion of budget because they work. They provide great measurement in a very results-oriented culture.”
McManus has spent the majority of her 17-year career in Internet and marketing roles for Nationwide, an 85-year old company centered in the auto insurance market, but which now offers a fully diverse portfolio of products — from a traditional bank, homeowners and life insurance, annuities, mortgages and more. The company’s “Nationwide on Your Side” jingle is one of the most instantly recognizable ad jingles in America, but during the past 15 years, the company has supplemented its brand awareness with an ever-expanding catalog of DR marketing efforts.
These efforts include a McManus-led foray into the new marketing world of iPhone apps, as Nationwide became the first insurance company to introduce a mobile app, Nationwide Mobile, in April 2009. The company followed its success there by launching a second mobile app, Cartopia(SM) (which is designed to help consumers in the market for a new car), in December 2009.
And while Nationwide has entered the mobile marketing space with a bang, it’s thanks to other media that iPhone users have downloaded these apps. From online marketing to the launch of a massive TV campaign called “The World’s Greatest Spokesperson in the World,” that includes both branding and DRTV spots, the company’s integrated efforts have been crucial to maintaining and improving Nationwide’s position in the financial services sector.
“The more targeted we can get with all of our marketing efforts, the more successful they’ll be,” McManus says. “It’s about spending the time up front, developing a test plan for a campaign. Then we embed our philosophy — improved marketing ROI — into each campaign.”
Stability, Experience and Growth
Getting into the high-tech iPhone marketing business probably was the furthest thing on the minds of the members of the Ohio Farm Bureau Federation when they incorporated the Farm Bureau Mutual Automobile Insurance Co. in 1925. The goal of that initial business was to provide auto insurance at low rates for Ohio’s farmers. However, the visionaries that ran the business were quick to expand, moving into a half-dozen states in the first three years of operations.
By 1955, the company had clearly outgrown its original goals. With a Western expansion that now put the business into more than 30 states, the company changed its name to Nationwide Insurance. Throughout the past half-century, the company’s expansion has continued nearly unabated: opening a 40-story international headquarters in Columbus in 1978; acquiring Farmland Insurance in 1982 and re-naming it Nationwide Agribusiness Insurance (today, America’s leading farm insurer); and opening Nationwide Bank in 2007.
McManus stepped into this burgeoning business 17 years ago, fresh off earning her master’s degree at The Ohio State University. Starting in the company’s property/casualty insurance market research department, McManus has held a number of roles at the company during her run, but has spent most of her time working on Internet and interactive marketing. In fact, McManus was responsible for authoring the company’s original Internet strategy in 1995 (see sidebar, page 28).
“I’ve worked on the auto and home insurance businesses, Nationwide Bank, our Better Health products, affinity marketing, billing and more,” she says of her do-a-little-of-everything run at Nationwide.
First in the ‘App’ Biz
With such a diverse background — but an intricate knowledge of interactive marketing — it’s no surprise that the company made McManus the leader in developing the two iPhone apps it debuted in 2009.
“When we launched Nationwide Mobile in April 2009, we became the first insurance company with an iPhone app, which was a big milestone for us,” McManus says. The initial product was “primarily a claims app,” she says, allowing a customer to file a claim immediately after an accident from his or her iPhone. By the end of 2009, Nationwide Mobile had been downloaded by more than 85,000 users.
However, as the company began adding features — including allowing iPhone users to immediately send photos of their damaged cars along with the claims form — and awareness of the app grew, Nationwide actually began seeing sales of new policies coming through the app.
“We saw hundreds of sales come through,” McManus says. “As more people became aware and took a look at the app, we were able to utilize a unique phone number to begin tracking new policy sales back to interested iPhone users.”
Groupon Goes Viral
By Jacqueline Renfrow
When online shopping site Groupon launched in November 2008, the idea was to offer big discounts to a large amount of people, based on personal interest. Now available in 42 markets, the local shopping hub features one deal each day for customers to see, eat, do or buy in each participating city across the United States (the company plans to launch in Canada and Europe soon).
Offers on Groupon include deals for restaurants, sporting events, theater tickets, spas, etc. — and with discounts up to 90 percent off the original price. The way Groupon attracts both customers and retail partners is the collective buying aspect. Most obvious are the large discounts handed directly to the consumer, but only if enough consumers in that particular market sign up for the deal. Once a customer signs up, the retailer is also given the great opportunity to use the lead to collect names and information on a customer for future database use.
“It’s an amazing amount of enthusiasm that our deals generate, and it’s of the viral nature,” says Mark Desky, vice president of marketing, Groupon. “They’re so powerful that they become viral quickly. People Tweet them, Facebook them, share them with friends.” Response sat down with Desky to learn more about how the young company is capitalizing on direct response.
Q: How did the idea of Groupon come about?
A: Founder Andrew Mason first started another Web site called The Point, which was about affecting social change through groups. It focused on establishing campaigns to build a park in a community or something along those lines. This was in 2007. People were able to build their own campaigns on the site and, at one point — as an experiment — a business was featured on the site. It soon morphed into the Groupon we have today. So it was born of The Point, but also the people working at Groupon believed there are so many option of things to do, eat, see and buy in a city that we wanted to offer a place that told you about all these things and offered a compelling discount at the same time.
Q: How does Groupon work from the consumers’ and retailers’ points of view?
A: We prepare our merchants for the day of the deal because we know their Web sites will get unprecedented traffic. That’s part of the reason we don’t make our Groupons valid the day of the feature because trafficking questions about the deal is a priority that day — making sure people interested fully understand it. So once a customer commits, assuming the deal tips, a PDF voucher is E-mailed to the customer and it’s good to use the next business day. Also, we have an iPhone app, so you can redeem it through the app, which also tells you where businesses are located and which are closest to you.
Q: What makes Groupon a unique DR marketing strategy?
A: I think it leverages social media tools that weren’t available several years ago. The timing is right for ideas like this. People are more interested in a deal, and merchants need a way to attract new customers. As an alternative to traditional advertising, it will thrive in any economy. We have 3.3 million subscribers across the country, and more than 2.6 million Groupons have been redeemed. We’ve saved customers $130 million through coupons. We also have a Flickr stream with people using Groupons. We see photos from being on a whale watch to being on a trapeze to being at a wax museum. People are taking pictures at all these places, and I love to go and see how much happiness it’s generating. We hear all the time, “If it wasn’t for Groupon, I wouldn’t have tried it.”
Q: How does Groupon generate leads for retailers?
A: We do not give merchants the E-mail addresses of those who buy Groupon. We don’t share the list. It’s up to them to capture the information at the point of redemption or to make contact. Our goal is for our customers to become our merchants’ customers. So it’s a launch pad for DR programs, and if they’re smart, that’s how they use this experience. It’s a huge advantage to market at the initial redemption experience to make lifelong customers.
Q: Do you work at all with online retailers?
A: Yes, we have online deals. We’ve actually run deals for ScanDigital in more than 20 markets. It’s a deal to spend $40 and get a $100 credit. We’ve sold more than 6,000 of those, and that’s across 27 campaigns. Since working with Groupon, ScanDigital has more than doubled its base and increased its amount of repeat buyers by 35 to 40 percent. They really used Groupon to build a list and generate repeat business. Since it was online, we provided a code and captured the information without people going anywhere.
Q: Which deals seem to be the most popular?
A: Baked goods are popular. Also, the Chicago Fire professional soccer team sells really well. They’ve used the site to offer Groupons for tickets to their Miller Light Party Deck and had promotions at these events offering signed jerseys and soccer balls and stuff. It’s to get people at games to provide E-mail addresses. Restaurants are very popular, and so are spas. We’ve tried different things, and some are more challenging than others. We don’t want to keep doing the same thing. The best of the city means variety. One thing that’s exciting is that it offers a lot of promotion for a local business. They get really incredible marketing horsepower and it’s a launching pad for future efforts.
Q: What’s the most challenging part of the business?
A: Keeping it fun. We consider ourselves cool. This isn’t your mother’s coupon; this is something our customers are enthusiastic about. And the focus during the past year has been rolling out to so many new markets. But really, it’s a win-win for merchants and customers, at no risk for the merchants. If it doesn’t reach a tipping point, it’s no cost to the merchant but they’ve gotten exposure. We collect the money and send it on to the merchant, so there are no upfront costs either.