‘Tis the Season … or Is It?13 Nov, 2009 By: Thomas Haire Response
Members of Response’s Editorial Advisory Board tackle the question of when to begin a DRTV push for seasonal products.
Closing in on the 2009 holiday season, most analysts are projecting what may be the worst or second-worst sales figures in more than 40 years of U.S. government tracking. The Wall Street Journal recently reported on analyses from Deloitte LLP and research firm Retail Forward that both projected total holiday sales growth from November through January 2010 as flat.
This would be apparently good news, considering that the 2008 holiday season showed a 2.4-percent decrease, according to Deloitte (excluding motor vehicle and gasoline sales), and a 4.5-percent loss in Retail Forward’s figures, which did not include pharmaceutical store sales, auto and gas. The National Retail Federation (NRF) is forecasting a 1-percent decline for the 2009 holiday season — again not nearly as troubling as it’s estimate of 2008’s losses of 3.4 percent.
Such are the changes in the market that what would have been considered sobering news just two years ago is now considered a positive sign. However, the tighter holiday market has put pressure on all marketers to seek immediate measurability of their efforts and to ensure they maintain their slice of a shrinking pie.
The story is no different, whether for marketers now drawn to direct response marketing for its capabilities in that area or for traditional direct response marketers. The key today is making sure you get out early — but not too early — with your campaign to maximize its possibilities during the season.
Finding this window — the difference between the seasonality of your campaign and the seasonality that the product is meant to capitalize on — has always been difficult, whether you’re considering the holiday season, the season of New Year’s resolutions, hot summer products and so on.
To address the best ways to bridge the seasonality gap, Response has once again turned to its Editorial Advisory Board (EAB) for this, the final quarterly edition of the 2009 Editorial Advisors Forum.
With holiday sales expected to remain flat or drop once again in 2009, has that made the timing on such seasonal campaigns even more crucial? If so, how?
Brian Fays, MTV Networks: Conventional wisdom would suggest accelerating campaigns in order to tantalize the consumer during seasonal pushes. However, the consumer is more educated and cautious than ever. Thus, if they are resolute in keeping their hard earned dollars in their pockets during the holiday season, the timing of any campaign will not change their mindsets.
Tim Hawthorne, Hawthorne Direct: Our clients are moving into the holiday season with optimism and the holiday spirit of hope. Timing is crucial this year and all years. New holiday offers have been shot, edited and ready to roll out immediately after Thanksgiving.
Fern Lee, Factor Nutrition Labs: During critical economic times, it is a perception-vs.-reality mindset. The marketer must advertise more! Show strength!
Mike Medico, E&M Advertising: All past timing strategies have been made irrelevant due to the economy and the fact that media rates, especially on national cable, are increasing.
Ken Murray, J.G. Wentworth: I don’t think timing is as important as overall effectiveness, which is based on being relevant with your audience in terms of brand awareness, perception and trust — as well as having products and services that consumers need. If the advertiser can demonstrate particular value during a holiday period and marry the notion of that value proposition with the tradition of gift giving, for example, then there’s huge potential for leveraging the “season.” In that case, campaign timing is critical, as the advertiser needs to get the message in front of the consumer well before the buying season starts, scant as it may be.
Richard Stacey, Northern Response Intl. Ltd.: Timing can be important so you may want to extend your media schedule. This can be done by starting a bit earlier with your holiday ramp up on TV to create awareness and drive sales before consumer budgets get pulled in too many directions, and before your product and competitive products become too widely available in other channels of distribution.
With the holidays fast approaching, what DRTV vertical markets traditionally do best during this time?
David Savage, R2C Group: Housewares, electronics, beauty, collectibles and entertainment-related products — such as DVD and CD collections — typically do well during the 4Q period, especially in the weeks immediately leading up to the holidays.
Fays: Products with efficient price points that could be used as stocking stuffers or office Secret Santa type gifts are the main draws this holiday season. ’Tis the season not to break the bank on expensive gifts that may just collect dust in the long run.
Hawthorne: The holidays always see an uptick in gimmick gifts, beauty, kitchen and housewares, and entertainment. Self-improvement, diet and fitness are waiting in the wings for January’s rush of holiday merrymakers’ guilt-driven purchasing.
Lee: As seen on TV gadgets and widgets, kitchen/household products, inexpensive items — these are “we” months, rather than “I” months.
Medico: Personal health and beauty items have done well, as have some novelty products and appliance-type offers.
Stacey: Beauty and housewares products can do well because everyone wants to look their best for the holidays, and great TV-driven housewares sell well — both as gifts and as items that can make those holiday kitchen preparations easier and faster. Holiday time is also a good time to start driving awareness for fitness items, which often sell well in retail during the New Year’s resolution season.
When planning a campaign for a product directed toward holiday sales, what differences in timing exist for a DRTV campaign compared to a traditional branded retail campaign?
Fays: The branded retail campaigns must start laying the groundwork more in advance versus more traditional DR campaigns in order to captivate the consumer. DR holiday products are less about overall branding and more about a fun, unique gift, coupled with an efficient price.
Hawthorne: Few long-form DRTV products are designed strictly for seasonal holiday sales — the format lends itself better to three- or four-season products. Short-form products, on the other hand, can work strictly for the holidays, but most direct marketers prefer a longer seasonality. Most often, purveyors of successful DRTV products, both long and short form, will create a specific offer suited for the holidays: “buy a second product at half price for the perfect gift.” The timing for these one-off holiday offers, in our experience, is very similar to retailers: just before or after Thanksgiving. But we’re seeing a growing number of DRTV marketers and retailers now jumping the gun with post-Halloween starts.
Lee: It all depends on whether the DRTV campaign is long form or short form. In long form, you are going to be able to take advantage of low fourth-quarter rates, while in short form, you need to pay up — especially in late October and early November with political advertising in many markets.
Medico: The main issue relating to the timing of direct response campaigns centers on the delivery of the product to the consumer. Under normal shipping parameters, it would be important to leave enough time for the orders to ship and be received, given the increased volume during the holidays.
Savage: To optimize holiday sales, there are a few media-related strategies that should be considered:
- Book out schedules as far in advance as possible, which gives you the best chance of getting inventory, allowing time to adjust schedules, or finding alternatives if your preferred networks/time periods become unavailable
- Be flexible in regard to network selections and dayparts, as 4Q is very competitive
- Have plans in place to take advantage of fire sales — send tapes out to stations in advance so you have a quick response time
Stacey: In many cases, there is very little difference between the two campaigns, as both the branded retail campaign and the DRTV campaign are geared to drive brand awareness and get the sale during the holiday season either directly from TV, online or from a retail store. In the case of DRTV, one has to leave time for shipping as the holidays approach so that there is enough time for consumers to receive their goods in time for specific dates.
If you are planning a DRTV-to-retail campaign timed to max out during holiday season, how far out does that campaign have to begin? What’s the best timing for the transition from mainly DRTV sales to retail sales occur?
Fays: Given the volatility in the economy these days, approximately two weeks before Thanksgiving is when the shift from retail to DR should take place — based on the consumer information we have conducted in focus groups here at Viacom.
Hawthorne: In the past, it was common for DRTV campaigns to lead retail distribution by three-to-nine months. We’re now seeing more retail introductions simultaneous to a DRTV launch. Of course this strategy carries significant risk if the DRTV advertising produces very low MERs (media efficiency ratios). The preferred strategy is to test DRTV for two-to-four weeks, gauge the product’s success but be ready with inventory and retailers at hand to roll the product into stores immediately after the test.
Lee: For a DRTV-to-retail campaign, you need a minimum of 6 months of DRTV to gather enough media spend and eyeballs to promote the product on the retail shelves.
Medico: We would start after Labor Day with the bulk of the spending in October and November. For our clients, the timing generally occurs when the DR allowable cannot be sustained due to wide distribution at retail.
Savage: The strategies vary with marketers’ objectives and budgets. Marketers with larger budgets and greater retail distribution get started earlier (November), while others who have more limited budgets, are heavying up during the Thanksgiving and post-Thanksgiving time periods.
Stacey: Planning a DRTV-to-retail campaign is often a three-phase approach. It can take around 90 days to get an item onto retail shelves. The DRTV campaign often needs to have created at least some demand so that retail buyers take the item for their stores, and then continue to build that demand while the retail orders are being processed for shipment to the stores.
- Phase 1 is for DRTV to drive awareness to get the retailers to say, “I want that in my store” — no less than 90 days out
- Phase 2 is keeping the DRTV campaign going to build demand and drive consumers into the stores
- Phase 3 maintain media support and retail store sell-through
Do these same timeframes hold when planning a product debut to maximize sales in different key periods, such as capitalizing on New Year’s resolutions or getting fit for summer? When should campaigns hit the air to capitalize on these and other important timeframes for the products promoted?
Fays: It’s less about timeframes regarding season and more about the overall health of the economy and consumer confidence. Bottom line, everything we do to predict and forecast the overall health of the DR business correlates directly back to the health or lack of health of the economy.
Hawthorne: Yes, there is similar timing for different product categories and seasonal periods. Self-improvement, diet, fitness should be tested in September to November to gauge the intensity of roll out in January. Home improvement/outdoors should be tested in January and February in the South for a nationwide rollout in March and April.
Lee: The consumer has become much more fickle with products. While in the old days a fitness campaign was tested in December with rollout to begin January 1, those days have changed. A good fitness show will work 12 months a year, such as Product Partners’ fitness campaigns.
Medico:I think health and fitness are more the exception than the rule in that most people use the New Year’s resolution mindset to lose weight and get into shape. In our experience, the timeframes that apply to product debuts are a function of when media availabilities are greatest and rates are the lowest. They are also dictated by the point in the marketing cycle that the direct response allowable is coming in on goal or the point where the allowable can no longer be sustained.
Savage: If the product is more New-Year’s-resolution related, testing can occur in November and December, so that results can be read and rollout can be planned for and occur immediately following the Christmas and New Year’s holidays, when rates come down and clearance is typically much easier. The first few weeks of the January broadcast month will likely be very attractive to DR marketers.
Stacey: The overall timeframes to maximize sales in different seasons can be the same. The method of driving DRTV sales and then capitalizing on that media by driving consumers to retail stores doesn’t always change due to the season. It takes time for media to build mass awareness, retail buyers to accept an item, and inventory to be shipped from Asia and finally delivered to stores. The best approach is to work backwards so that if you want your item in Wal-Mart for Christmas, it may be best to be meeting with the Wal-Mart merchandise buyers in the summer with your DRTV already airing.