Pitchman Vince Shlomi may put consumers in a “good mood all day” with his quirky Slap Chop demonstrations, and seeing people bundled up in Snuggie blankets definitely makes viewers want to wrap themselves up and read a good book — kind of like the ShamWow! makes you want to spill something and clean it up.
Consumers looking for cooking help, warmth and cleanliness swarmed to these products in 2009, but the commercials — which would have been representative of the entire DRTV business even just 15 years ago — made up only a sliver of the ever-growing short-form DR marketplace. However, their prominence didn’t please everyone. In fact, some contend all three shows could have easily thrown DRTV back to the 1970s era of Ginsu knife infomercials — a time that most producers have been trying to shake for the past 30 years.
“The brand business took a hit with the prominence of the Snuggie, ShamWow! and Slap Chop last year,” says Doug Garnett, president at Portland, Ore.-based Atomic Direct and a member of Response’s Editorial Advisory Board. “Even Advertising Age’s article [which focused mainly on gimmicks being sold at retail and As Seen On TV products] on DRTV couldn’t rise to the occasion and focus on the good work being done. They went for the cheap draw and led with these cheesy yell-and-sells.”
While those “yell-and-sells” spawned the birth of short-form DRTV, over time they were replaced with quality, branded commercials that were often hard to discern from traditional advertising. A steady stream of brand advertisers flocked to DRTV for its inexpensive media buys and high level of accountability, often working the medium into their overall advertising plans with the help of experienced direct response producers.
Last year, however, it was cheap products like the Snuggie that garnered the attention in DRTV circles. “There’s been good publicity surrounding these types of products, but what people don’t realize is that this stuff is just a narrow section of the broader short-form industry,” says Garnett.
The question is: will the fact that inexpensive, gimmicky products and boisterous pitchmen like Shlomi who stole the show last year negatively impact DRTV for the long-term? Garnett thinks so, believing “it set back the industry’s image,” and could have driven some brand advertisers to rethink their DRTV strategies.
The good news, says Garnett, is that the industry is attracting an increasing number of marketers that previously funneled 100 percent of their advertising dollars to the Internet. They are giving DRTV a second look (see sidebar), having learned of the latter’s ability to drive consumers to specific Web sites and online promotions. “Marketers that are using all-Internet advertising are operating in a limited universe,” says Garnett. “If they want to do business, they have to go offline.”
Measuring the Impact
Gimmicky products and online marketers aren’t the only things impacting the short-form arena right now. At Onyx Productions Direct Inc., in Los Angeles, Joan Renfrow, president, is producing shows a little differently these days, thanks to the new FTC guidelines governing the use and display of testimonials. In October, the FTC published its “final guides” governing endorsements and testimonials, thus affecting all advertisements that include such elements.
Under the new rules (which became effective Dec. 1), advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the guides — which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” — the revised rules no longer contain a safe harbor.
“You can no longer show ‘before-and-after’ shots and take testimonials claiming that someone lost 55 pounds on a certain type of diet,” Renfrow explains, “and then just tack ‘results may vary’ on the end of the show.” And while DRTV producers can still select from a pool of dieters, for instance, to showcase the ones that lost the most body fat or inches, the disclaimers associated with those results must also identify typical results.
The new FTC requirements can dilute the effectiveness of the testimonials, particularly when a 55-pound weight loss has to be followed up with a statement like “the typical weight loss result from this product is two pounds.” Scripts and voiceovers are also affected, says Renfrow, since the verbiage must be conveyed via voice or on screen. The rules are creating more work for producers, but Renfrow isn’t convinced that they’re doing much to educate consumers.
Everyone has experienced, at least once, the aggravation that comes when you pick your car up from the mechanic and glance down at the bill to find a much larger price tag than anticipated. Next thing you know, you are being told that the initial problem you brought the car in for was just the tip of the iceberg. So immediately you wonder, “How do I know all of this work was necessary?”
And that’s how the idea for CarMD came about. Starting with a vision as far back as 1997 — and patenting the name “CarMD” tester in 2003 — the Fountain Valley, Calif.-based company produces a product for automated diagnostics on your vehicle. “Most people don’t know their car has a computer, much less that they need to tap into it or why they need to tap into it,” says Art Jacobsen, director of business development for CarMD. Therefore, Jacobsen’s No. 1 mission, along with the rest of the team, is to educate consumers on the fact that there is a computer in every car, and consumers need to know how to access this information before going in for a repair, or before buying or selling a used car.
The current CarMD diagnostics product — which is small enough to carry in one hand — was launched in 2006. The steps to using the device are simple: put the tester into the ignition of your car, wait four beeps, remove and plug it into your computer. Then, the information from the device is downloaded to a home computer and into your personalized CarMD account. What is happening on the back end is that your car’s information gets connected with the CarMD proprietary database, which has been built during the past 12 years with the help of ASC mechanics. The database keeps information on vehicle models, makes, years and how to fix them, using the certified mechanics that work on these cars everyday. CarMD will report to the customer what is wrong with the car, what needs to be done to fix it, and how much it should cost. If CarMD can’t tell customers immediately what is wrong with their cars, it will get the information to them within 72 hours.
“While there are other scan tools out there, some cheaper, you won’t have the end-to-end solution that we offer,” says Jacobsen of CarMD.
From Home Shopping to DRTV
Although CarMD has been selling its product since 2006, it underwent a major re-launch in 2009, which was spearheaded by its fourth-quarter long-form DRTV show. CarMD had already been selling through HSN since early 2007 and continues to sell well on the network. Recently, during an airing, it sold 6,400 units in four, seven-minute airings. Jacobsen credits its success on HSN to the fact that the product is highly demonstrable. Currently, CarMD has the longest running electronics offer on HSN that has not been tweaked.
“We wanted to use TV as the medium to educate people so that they know they have a computerized system in their cars; here is how you access this information and why you need to access this information,” says Jacobsen. “Once people get it, they use the tool and they like it. Then they tell their friends, and it becomes viral. We just need to get the message out so they understand it.” The ultimate goal is to give the consumer the tools to make smart decisions.
Using the momentum from HSN, CarMD saw an opening to lunge into DRTV. The first long-form ad aired on Oct. 27. But getting to that point was no easy feat for Jacobsen — a chemical engineer by training — who had to learn the ins and outs of DRTV from writing creative to booking host talent. Jacobsen was tasked to research past successful long-form shows, find producers, learn the media buying industry — and all from scratch.
The International Home + Housewares Show reminds the direct response industry every year that there’s a lot more to March besides the madness of college basketball and leprechauns. While some product segments have lagged in the sagging economy, housewares have remained remarkably strong. In its annual categorical review, Response took some time to find out what’s hot, why and how you can strategically get in on the action.
This year’s theme at the Housewares Show is innovation, which is what drives thousands of inventors, retailers, distributors, spectators and more to McCormick Place, Chicago’s premiere convention facility. It’s the chance for the industry to do business, educate and celebrate. And, this year, it seems a celebration is in order.
According to the International Housewares Association’s (IHA) State of the Industry Report, U.S. consumers spent nearly $75 billion on housewares products in 2008. And while U.S. housewares expenditures decreased by three percent from 2007, data gathered from 2009 and early 2010 seems optimistic.
“Consumers are very concerned about simplifying their lives, organizing their homes and eating healthier,” says Perry Reynolds, vice president of marketing and trade for the IHA.
In talking with retailers, Reynolds has found that their business is not only holding up, but seems to be doing better than a year ago. “It’s creating energy in our category. If you look at our business historically, we’re among the first to recover,” he says.
“One of the things happening as the economy has cooled is that consumers stay home. There are a number of indicators that many activities that used to be done outside of the home are now done in the home,” continues Reynolds. For example, there are strong numbers correlating to more coffee being consumed in-home instead of out.
“Consumers are baking at home and more meals are prepared and eaten at home now than two years ago,” says Reynolds. In fact, the top three housewares categories for 2008 were cook and bakeware, kitchen tools and accessories, and tabletop. (see bar chart below)
"We thought that we could tell a story without spotlighting item and price and asking customers to buy," says Alan Gladstone, founder and CEO of Costa Mesa, Calif.-based Anna's Linens, a privately-owned nationwide specialty retail chain in the domestics and home furnishings market, about a TV ad campaign from the not-too-distant past. "The ads were more about branding, and while they were good for my ego, they were not good for the cash registers. Recently, we returned to our bread and butter. We did a commercial highlighting 400-thread count, all-cotton sheets as the 'deal of the century' — $24.99. We sold 75,000 units across 250 stores — it was the biggest sheet event we'd ever had."
Then, as Gladstone is wont to do, he credits the company’s direct response media mix of TV and print with the campaign’s success. “The TV media buy was unbelievable, but we never would have had that kind of response with just print or just TV,” he contends. “Both worked — we measure response, and based on what we saw, whenever the shopper got the circular or saw the commercial, they didn’t wait to come in. We could have sold three times as many if we had the stock.”
Anna’s Linens has found such success common in recent years. Founded in 1987, with the first store opening in Baldwin Park, Calif., in early 1988, the housewares retailer has seen consistently strong growth since the turn of the century. The company survived a restructuring bankruptcy in the early 1990s, but still had only 57 California-based stores in 2000. Today, that number tops 250 in 18 states.
Through it all, Anna’s Linens has always been a family affair. Gladstone named the store after his mother (and her picture appears in each store to this day, even though she passed away in 2003), and his children are long-time key executives in the company. Son Scott Gladstone is the retailer’s chief operations officer and daughter Carie Doll is its chief merchandising officer.
While the company began marketing using print circulars — for 18 years, direct print accounted for 100 percent of Anna’s Linens’ marketing spend — it added TV in 2006 and began beefing up its Web site, www.annaslinens.com, around the same time. Adding TV and Web to its marketing mix helped boost Anna’s Linens direct campaigns to a new level.
“We needed to expand the awareness of Anna’s,” Gladstone says. “TV has broadened our reach. We track every sale by zip code, and since we went to TV, our reach is wider. At the same time, the Internet is our fastest growth vehicle. It’s seen ridiculous increase levels, but I still think it’s underutilized. We’re funding it, but I am still surprised at how many states we sell via the Web that have no Anna’s locations.”
However, direct response isn’t only working for Anna’s Linens across TV, print and online media. It’s also providing new products for the retailer to sell, as the company’s stores now stock and highlight a bevy of As Seen on TV products, a sector that Gladstone calls “our biggest growth area in stores last year.”
SANTA ANA, Calif. — Rock star. Humanitarian. Businessman. Actor. Inspirational speaker. Five different people? No — just one, and he’s keynoting Response Expo 2010.
Sir Bob Geldof — founder of the Band Aid Charitable Trust, organizer of the renowned 1985 LiveAid and 2005 Live8 concerts and a nearly annual nominee for the Nobel Peace Prize — will welcome Response Expo attendees to San Diego at 5:30 p.m. on Tuesday, May 11, with what promises to be a powerful and inspirational message, presented by Euro RSCG Edge. The event runs through May 13 at the Hilton San Diego Bayfront.
“Sir Bob Geldof’s background and renowned speaking skills makes him a ‘can’t miss’ keynote for our attendees,” says John Yarrington, publisher of Response and event director of Response Expo. “His unique and insightful presentations have wowed crowds across the world, from the famous TED conference to Britain’s renowned YIBC event — and he’s sure to do the same in San Diego this May.”
Thomas Haire, editor-in-chief of Response Magazine and content director of Response Expo, adds, “Sir Bob Geldof’s resume as a humanitarian and businessman is second to none. And, in recent years, he’s gained further notoriety for his inspirational, entertaining and humorous public speaking appearances. We are thrilled to bring the direct response marketing business its biggest and most important keynote speaker ever.”
The 56-year-old Irishman first hit the public consciousness in the late 1970s as leader of The Boomtown Rats, a band that played an integral role in the punk/new wave explosion in the British Isles. The band’s timeless hit, “I Don’t Like Mondays,” is still a staple on rock radio today. He gained further fame after starring in the film based on the classic Pink Floyd album “The Wall.”
But it was in 1984, when Geldof turned his attention to the dreadful famine problems of Ethiopia, that he found his life’s true calling. Organizing Band Aid with fellow musician Midge Ure, Geldof gathered a virtual who’s who of British rock royalty to record one of the most inspiring and classic holiday songs ever, “Do They Know It’s Christmas?” The song’s initial proceeds — more than 8 million British pounds — went to a new charity, which became the Band Aid Charitable Trust.
Following the success of “Do They Know It’s Christmas?” Geldof turned his sights on organizing a concert to benefit the struggling African nation. On July 13, 1985, the LiveAid concert took place in London and Philadelphia, featuring the top musical acts in the world broadcast on MTV. The show raised more than 100 million British pounds.
Twenty years later, Geldof organized the Live8 concerts, which happened in conjunction with that year’s G8 Summit of world leaders to bring attention to the continuing poverty of African nations. The shows in 10 different cities around the world on July 2, 2005 (and an 11th just four days later in Edinburgh, Scotland) were a massive success, as was the DVD set of the shows, released the following November.
His initial efforts on behalf of Africa resulted in gaining knighthood from Queen Elizabeth II in 1986. And his efforts continue to this day, including a BBC1 television series — “Geldof in Africa” — that was a hit earlier this decade, and a 2008 trip to Africa with then U.S. President George W. Bush.
Aside from his humanitarian efforts, Geldof has continued his music career as a solo artist throughout the past three decades. He’s also been involved in creating a series of successful businesses, including TV production houses Planet 24 and Ten Alps Communications and travel Web site Deckchair.com.
Among his many honors, Geldof was awarded the Nobel Man of Peace Award, which was presented to him by Mikhail Gorbachev in Rome in 2005 and was recognized as a “European Hero” by Time Magazine in 2005.
Super Bowl Ads Drive Little Response to the Web
By Jacqueline Renfrow (firstname.lastname@example.org)
BOSTON — According to a study by Chadwick Martin Bailey, which followed the actions of consumers in the 24 hours following the NFL’s Super Bowl XLIV on Feb. 7, few went online despite many advertisers’ efforts to drive them to the Web.
The study, which looked at the behaviors of 1,500 consumers, found that although advertisers were hoping that viewers would go online and chat, Tweet and become a Facebook fan, if not visit the brand’s Web site, the numbers were not overwhelmingly positive.
The big game had a record viewership of 49 percent of people watching at home with no guests to distract them. When it came to sharing the ads with friend online during or after the game, 7 percent of respondents took this action, only 2 percent Tweeted about their favorite ad and a mere 1 percent became a fan of the brand on Facebook. The study also found that 12 percent took action by visiting the advertiser’s Web site and 67 percent took no action at all. Overall, 47 percent of U.S. adults went online during the game for scores or research.
“There was a lot of hype around the role social media would play leading up to this year’s Super Bowl advertising,” says Jeff McKenna, senior consultant at Chadwick Martin Bailey. “The reality is that, by and large, viewers did not immediately engage with brands the way many advertisers hoped. While we did find smaller groups actively interacting with brands online, the immediate mass market bang for the buck did not seem to be there.”