This Year's Model: Putting DRTV 2010 Into Focus7 May, 2010 By: Jacqueline Renfrow Response
But what about mobile, the channel that has been buzzing around in the ears of marketers for several years now? Fays says mobile has been a lot of talk that will not really take off until there is a tightening of inventory. “When there is still a good amount of short-form advertising to buy, there is no way to be innovative,” says Fays. “When there is a scarcity of inventory, then clients will get forced to spend money online and in mobile.”
Garnett refers to other channels as adjuncts to DRTV. “Those that have not done DRTV have idea how big an effect it can have,” he says. “When you have DRTV, you have complete control: increase ad spending and increase sales at retail.”
In comparison, Garnett believes that online video, while it can have an effect, is not meant for target marketing. With 120,000 new hours of video per week on YouTube, it’s hard to get noticed. He even mentions that most viral video success often originates on television.
In addition, Garnett says mobile is similar to online in that there is so much out there, it’s hard to cut through the clutter. While the idea of using mobile for coupon distribution is a good one, Garnett worries that consumers do not want their location to be tracked by phones. “A lot of these technology companies need a reason to exist and so tell you why their idea is the best since sliced bread,” he says. “We’ve seen hype after hype, and we need to be more cautious.”
For companies like Razor & Tie, although DRTV is strong, the Web is still an important channel. “There has been a large migration to order direct from the Internet,” says Chenfeld. “There are variations, depending on the demographic, but online is probably 60 or 70 percent of orders. I’m rarely relying solely on a DRTV campaign to do the entire revenue generation for an offer or product.”
Chenfeld also believes television is still such a strong channel because those watching it are inclined to respond to an offer. “As the broader media coverage of TV continues to be negative, it puts pressure on marketers to take money out of TV,” he says. “They take money out prematurely, lessening the demand and not allowing the prices to go up as fast as they could. As a result, there’s more time for people like me at lower prices.”
Paul Greenberg, Los Angeles-based chief creative officer at Thane Direct Inc., also shines a light on DRTV’s strengths. “There are companies that generate a huge slice of their sales on the Web, direct mail and retail,” says Greenberg. “Our strategy will continue to be that DRTV is the driving force with Web, print media and retail supporting that drive.” For some products sold through long-form commercials by Thane, the Web can account for up to 50 percent or more of sales.
And DRTV experts want marketers to heed the warning that new media often promises but does not deliver. For example, the media hype tells consumers that television is moving to the Internet and that traditional television is dying.
“I don’t want to come off as a Luddite, saying everything wills stay exactly the same,” says Chenfeld. “But people are writing off TV, radio, CDs, where there is still a healthy demand. There are more and more options, you can now fine-tune your media to buy more than you could five or 10 years ago because of all the cable channels and so many options. You can easily target to any demographic.”
Hot Products of 2010
In 2009, the long-form industry was a tough one, as higher ticket items were not popular among consumers. But what products will sell well this year? Fays notes that skincare is still a hot item, both for long and short form. For networks such as MTV, MTV2 and VH1, demonstrations of skincare lines do really well. Although smaller-priced exercise products did all right in 2009, consumers seem to be scaling back on the big-budget items. Categories that are winding down are mortgages, insurance and money for gold items.
Garnett sees a great opening for housewares in the DRTV market. Many housewares have abandoned DRTV for the moment, and, as the market begins to normalize, it’s a great time to introduce new products into this vertical — while the airwaves are still quiet.
Time-Shifted TV and DVRs
Fays notes that even with the growing popularity of time-shifted DVR television, demand for DRTV is not lessening. Clients seem to understand that there will be a certain amount of time shifting, but it doesn’t factor heavily into negotiations.
Although Chenfeld admits that time-shifted television has affected the number of consumers watching commercials, the audience is bigger than ever before, so the amount of people actually seeing a DRTV spot is still significant. Plus, he says that people who are responsive to direct response are less likely to be impacted by some shifting. “We’re optimistic and growing quickly,” says Chenfeld. “It has been the best first quarter, maybe ever.”
It is not time-shifting that worries Fays; it’s the shift of traditional advertisers into DR. He believes these advertisers should not get traditional DR pricing because it’s not good for the industry overall. If traditional advertisers start using DR at lower prices, rates will increase for everyone and block out prospective DR marketers.
Thane Direct, with offices in eight countries and shows airing in 150 markets globally, has felt the tough economic climate in the company’s three core territories: the United States, Canada and the United Kingdom. However, looking at other international territories, DRTV has not been in a slump at all.
Greenberg has seen many strong products that are carrying over from last year, including the H2O Mop series, which has sold 2.5 million units. Also, the Flavorwave Turbo Oven, with Mr. T starring in the commercials, has outsold all previous models combined, even though it’s the third version in the product line. He also names the AB-DOer Twist, which is just emerging — but the original AB-DOer sold millions of products in 83 countries.
Greenberg says Thane’s success often comes from a product that does not sell extremely well in the United States or Europe, but takes off in South America or somewhere else. “Because we own media and direct channels in so many countries, we’re able to experiment and try, and if it doesn’t work in the U.S., we’ll find where it does work,” says Greenberg. Currently, Thane has seven shows airing in the U.S. and 50 internationally.
“We’re being aggressive, and we think we’ve found a formula for success. When we pick a product, we get behind it fully and invest the complete resources needed to give it every chance of success,” says Greenberg.
One of the challenges to selling internationally has been the instability of manufacturing costs. Greenberg says having to anticipate if the price of steel or rubber, or something else used in making a product, was going to go up, the DRTV price would have to change accordingly.
Also, when considering a product for international sales, a marketer needs to remember that the commercial will be dubbed into another language, affecting what sells well. “Shows that work best are very visual in nature and the process of the product working in many ways, that’s what you want,” he says. “A good test for me to see if a product will work is to turn the sound off altogether. Any good infomercial can be watched without sound, and you are compelled to keep watching.”
In addition, Greenberg says DRTV has come a long way internationally because of advances in production technology. In the U.S., production quality has increased dramatically during the past five or six years, in order to compete with what’s on cable television. So when these shows are exported internationally, infomercials often look far superior to local TV.