Response Magazine's DRTV Best Practices Primer Part 2 - ERA-Sponsored Study Unlocks DR Consumer Behavior Mysteries
1 Feb, 2003 By: Rick Petry, Response Contributor ResponseNew information from Leisure Trends helps fill dearth of research in the direct response/electronic retailing space.
How much of America watches direct response television (DRTV)? Who are they? Do people watch infomercials differently than home shopping channels? These are questions frequently asked by both direct marketing professionals and those looking to get into the game, but too often the answers are anecdotal and unsupported by facts. The reality is there has been scant formal research conducted that gets at these answers - even though DRTV is a multi-billion dollar industry.
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To get to the bottom of these lingering questions, the Electronic Retailing Association (ERA) commissioned the 2002 Electronic Retailing Tracking Study. As a service to its membership and as a means of fueling interest in the industry, ERA retained Leisure Trends Group, a Boulder, Colo.-based independent research firm. ERA elected to focus initially on the United States, the largest market for DRTV worldwide, with an eye toward other markets it hopes to research in the future.
The results shed definitive light on the ways that consumers interact with direct response advertising: infomercials, 60-second and two-minute commercials (referred to here as spots), and live shopping programs. For the purposes of this article, the term "DRTV" will include all three of these categories. The study's findings help unlock some of the mysteries about who is responding, how they are doing it and what impact their behavior may have on a direct marketer's go-to-market strategy.
Two-Thirds of America Watches DRTV
Out of the total adult population of the United States, 63 percent watch some form of DRTV advertising. While this is strong participation, overall DRTV viewership has declined by 11 percent since a similar 1996 study. However, given the increasing fragmentation of television choices, coupled with widespread household adoption of the Internet, this trend is not surprising. Despite this, viewers are likely to watch more than one type of DRTV.
A Desirable Audience
The study also reveals several insights about people who buy from DRTV. While DRTV viewership skews female, women do not hold as dominant a position as some industry experts may believe. Men play a more equal role than commonly believed. This gender balance may be a reflection of the broad spectrum of products and services offered and the audiences they attract. People who watch and buy from DRTV are more likely to be employed and more affluent than people who don't watch DRTV. Buyers are also more likely to be married with children compared to the other groups.
One interesting revelation is the potential of DRTV to reach a younger audience. The average age of viewers is actually younger than buyers. This means younger people are attracted but don't take action - a real missed opportunity. Among the youngest viewer group (ages 16-24), the time spent watching infomercials has actually increased from a year ago. This is the same, highly desirable, 70 million strong population group that traditional advertisers spend billions trying to attract. This industry should explicitly address them.
Differentiating 3 Sales Approaches
The study reveals through viewer behavior and mindset analysis that infomercials, spots and live shopping shows display different sales approaches. In order to increase your DRTV efficacy it is important to know your marketing tool.
Consultative Door-to-Door (Infomercials). Infomercials spend time with viewers - introducing, explaining and demonstrating products or services from beginning to end. Viewers who buy from infomercials do so because they believe the product will help them. Infomercials have a high sales conversion of 29 percent, and nearly 77 percent of infomercial viewers purchased by their second viewing. The higher conversion and lower frequency are no surprise given the longer time viewers spend with infomercials, delivering more informed buyers.
The audience for infomercials spends an average of slightly more than 15 minutes watching these programs. Since the most common running time for paid programs is 28 minutes, 30 seconds, this would seem to validate the need for repetition of product information that is a hallmark of the genre. Additionally, 54 percent of viewers begin watching the show during the middle, with nearly one-quarter of viewers watching the entire program. This has obvious implications for the way that paid programming content and messaging is structured. For example, programs that have an organic beginning, middle and end need to ensure that audiences are getting all the information they need in order to make a purchase decision without having to see the totality of the show.
Impulse Door-to-Door (Spots). Short-form DRTV interrupts viewers' TV experience exactly like traditional commercials except with a short one-to-two minute sales pitch. These random encounters are not unlike a door-to-door salesperson, knocking at the door at an unexpected time. The spot takes the consumer through the rational and emotional attributes of a given product or service and closes the sale. Spots, which have less time to extol a product's attributes, convert viewers into buyers who were already consciously or unconsciously "in the market," advising them that now is the time to buy. Spots also rely on frequency, as indicated by 80 percent of spot respondents who needed three exposures before taking action to buy. Nonetheless, spots, which appear throughout all programming day-parts, attract the largest DRTV viewer population at 92 million. With its purchase incidence of 19 percent translating into 18 million buyers, it is a highly effective medium.
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Outlet Mall (Live Shopping Shows). People who regularly watch or happen upon shopping channels are much like a consumer who visits the mall either intending to purchase a specific item or to browse. They arrive with an open mind and potentially open wallet. A minority of these viewers regularly tune into to specific shopping programming, but this loyal minority has a higher lifetime value as they regularly purchase.
Among live shoppers, getting a "good deal" is the primary purchase influencer, a fact that is reflected in marketing tactics that emphasize such things as special daily values or slashed prices and even the odd digits used in pricing (e.g., $27.71 vs. $29.95). At an average of 17 minutes, this group of buyers spends the most time seeking out bargains, and it requires an average of nearly seven different views - think of it as window shopping - before they pick up the phone to buy. Still, the percentage of viewers who are likely to make a purchase is similarly high to infomercials - 28 percent. Both formats take the time to sell.
Finally, the study confirms that DRTV drives consumers to retail and the Web. Viewers of each type of DRTV indicated they purchased a product that they first received exposure to via DRTV through other sales channels. This incidence was highest among infomercial viewers (39 percent), followed by live shopping (34 percent) and finally spots (32 percent).
In DRTV We Trust?
The perception expressed by viewers that DRTV offers products of "average" quality can actually be viewed as encouraging news. After all, the level of media scrutiny focused on the few negative issues associated with the genre, coupled with the way it is lampooned by popular culture, does not engender industry credibility.
Nonetheless, participants indicated that they trust infomercials more than they do Congress, used car salesmen and corporate executives. By providing industry leadership through its commitment to research, ERA intends to demonstrate that DRTV, as part of the larger quilt of electronic retailing, is a vital and mainstream marketing channel relevant to consumers of every stripe.
The full Electronic Retail Tracking Study is available to ERA members at no charge by contacting James Stouffer via E-mail at:
jstouffer@retailing.org.
