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Direct Response Marketing

Field Reports

1 Jul, 2009 By: Thomas Haire, Jacqueline Renfrow Response


Response

Q&A

By Thomas Haire (thaire@questex.com)

Cannella's Milestone: a Reason to Look Back and Ahead

BURLINGTON, Wis. — Since 1985, Cannella Response Television has been one of the leaders in the traditional direct response television space. While the company is on the verge of celebrating its 25th anniversary next year, its founder, Frank Cannella, is celebrating his 30th year in the marketing business in 2009. Recently, media investors ZM Capital and Palladium Equity Partners made a significant investment in the company — allowing Cannella Response to expand its current offering of media products to major DRTV advertisers. In addition, Veronis Suhler Stevenson will provide mezzanine debt financing along with equity co-investment in the transaction. Response caught up with Cannella and Rob Medved, the company's president and CEO, to discuss the company's past — and its future.



Frank, what's the most memorable moment of your 30 years in the business?

FRANK CANNELLA: Being in the right place at the right time to pioneer the infomercial concept in 1982. My boss passed along a lead, and said it's a half-hour show that says it can grow hair for balding men. There were two problems with this. At the time, there was nothing out there that we knew could grow hair — this was 2-3 years before minoxidil came to the forefront. Secondly, FCC regulations held ads to a two-minute maximum. It was good practice for a new kid, and a brand new business. As it turned out, one thing led to another. We started placing the show, and the product did what it said it would do. Two years later, the industry challenged the FCC regulations once again, asking, "If you can run 30-second spots back-to-back, why not this format?" My roots are in that kind of entrepreneurialism.



Have the past three decades essentially unfolded how you envisioned? What have been the biggest surprises during Cannella Response's near 25 years in business?

CANNELLA: I don't know if I had a vision. My career had just started. I'd only been in the business for three years in 1982. It's been pretty neat. I started on my own in 1985, and Rob came along in 1994. I told him then that I like my independence, and that we ran lean, almost like a consultancy. I said, "The day we hit 10 employees, your name better be on the door." Now, the company's grown up to about 40 employees. Every day, I am thankful for what's come about, how we've taken the opportunity and keep building on it. Rob is a great partner.

ROB MEDVED: When I first started, computers were just coming along. Then, we received our counts on rolls of fax paper. Before that, we got them on telex machines. So with the advent of the Internet, we grew up with it. Using it as a marketing outlet? That wasn't even a seed in our head. Even the TV landscape then was just a fraction of the numerous fragmented channels of today. Cable was in its infancy, and they were giving away contracts to locals. Now, you have the telcos, MSOs, cable, satellite — more than 1,000 broadcast stations and affiliates, hundreds of cable networks. The expansion has been stunning.

What do you consider the most successful campaign you've worked on and why?

CANNELLA: In 1996, when we started doing Banjo Minnow, which was a successful campaign in its own right, that transformed us from a media broker/consultancy into a DRTV media agency. Banjo Minnow's success had a unique attachment to how the agency stepped forward. It prepared us for the huge hit Tae Bo. We handled all the Tae Bo campaigns in the 1990s and early 2000s.

MEDVED: Success is relative, and it's not always just about who made the most money. When I look back, I can cite various campaigns and why they were successful. With a show like "Amazing John Beck," the success is longevity. It was on the air for more than a decade. With P90X, you're taking a show that most marketers would say is not quick and easy, and it has a high price point. The whole show is people filming themselves, but it's working. With the Just Kidding comedy videotapes, we're pricing something at $9.95 in long-form — very rare. You talk about success from the phones ringing? We shut down inbound telemarketers' lines on Saturday mornings.

Aside from the recent investor announcement, what are the latest developments at Cannella that affect the company's outlook for the next 25-30 years?

MEDVED: Primarily, there are a couple things. We are recognized as a complete DR agency. We hold some of the largest marketers in the business as clients. This reflects on our people. Our media buyers know DR marketing inside and out. Almost our entire team has been with us since they came into the DR business. We're passionate about what we do and what we do for clients. It's reflected in our growth and sustainability. The fact that we've grown, and continue to grow, speaks well for our future.

Where would you like to see the company in 2039?

CANNELLA: Of course, still in business. And, I hope to still be invited to our Christmas parties — and healthy enough to attend — since I'll be in my 80s.

MEDVED: Obviously, we hope to be at the top of the heap.

For each of you, what is your personal plan for the next five years, whether with the company or in other areas of your life?

CANNELLA: I'm looking to start to pull back a bit from the business. I'm getting involved in a more philanthropic life, working extensively with children's charities in the Burlington area.

MEDVED: I'll continue running the company, looking to grow and expand it and adapt to the ever-changing environment. It's important to have fun along the way, and luckily, I think the entire team enjoys what we do. At the same time, I hope to continue to balance my life, work, family and community service.

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