Bissell, Clorox and Kodak may not be names you would necessarily free associate with the PedEgg, Video Professor and Bendaroos, but all of these brands and products actually have something in common. Each of the blue chip brands listed, like their As Seen On TV counterparts, have used direct response television (DRTV) to promote themselves, even though the household brands are broadly distributed at traditional bricks-and-mortar retail. The reasons are fundamental: DRTV gives marketers the luxury of more time to educate and persuade consumers. When combined with the formidable savings on media that DRTV airtime affords, this channel of direct marketing packs a potent one-two punch that can powerfully augment any marketers’ advertising program. However, many traditional brand advertisers may still fear that this tactic might denigrate their brand. Or they may be dissuaded by their traditional advertising agency because it doesn’t understand the mechanics of DRTV success or because it values winning awards over generating revenues. Yet marketers from every category–from packaged goods, to fitness, even automobiles–can attest to the power of DRTV and how, when properly deployed, it can pull sales through at traditional retail storefronts.
 Time is Money
With image-based spot advertising now largely relegated to 15 to 30 seconds in length, it isn’t a whole lot of time to make a lasting impression, particularly in a world where the average consumer is exposed to hundreds, if not thousands, of advertising messages per day. In short-form DRTV, the advertiser gets the benefit of 60 to 120 seconds to differentiate the benefits and features of their product. In other words, two to eight times the length of impression-based TV advertising to educate consumers and create a lasting desire for their products. And with a paid program, that window is lengthened to an entire 28:30 minute format.
But there is another huge advantage to direct marketers: the cost of airtime. Unlike general advertisers, who are given an audience guarantee based on Nielsen ratings, DRTV runs in broad dayparts versus specific shows and is subject to immediate preemption with no guaranteed delivery of eyeballs. In return for their flexibility and willingness to release the network of any audience guarantee liability, direct marketers pay approximately 30 to 50 percent less than their general counterparts, but get the benefit of twice the amount of time for their media-buying dollar. In the case of paid programming avails, infomercial advertisers pay a fraction of what they would pay for the equivalent of 57 back-to-back 30-second ads.
 While cost per lead (CPL), cost per order (CPO) as well as media efficiency ratios (MER) (see Exhibit A) are the typical benchmarks that direct programs use to measure effectiveness, progressive direct agencies are now able to overlay traditional brand measurement metrics. Hence benchmarks such as gross rating points (GRPs) against a particular audience and the relative cost per point can be derived to give brand advertisers an opportunity to measure their direct ads’ effectiveness using yardsticks they are accustomed to. Long-form DRTV requires a more absolute leap of faith because Nielsen does not typically measure paid programming blocks of airtime. When one examines his or her cost compared to traditional airtime; however, that leap is rendered a rational step.
Buyer on Aisle Seven
When you examine the current retail landscape, dominated by big-box and mass-discount retailers and the club model, it is a terrain where consumers are largely left to their own devices to access their wants and needs and find products that will serve them. That may not necessarily be the fault of the retailer. After all, consumers want cheap prices and the Internet has conditioned them to be their own product sleuths. DRTV is akin to the consultative retail sell of old in that it acts as a shortcut that arms buyers with information, so they are empowered to make an informed purchase decision. As Arthur Wing, president of Little Giant Ladder Systems, comments, “To me, the infomercial is a 28:30 minute canvas that allows me to do a demonstration on my terms. We took a presentation we had perfected in person for 31 years, made it virtual and reached an enormous audience.” Wing’s product needed to educate the consumer–it was a paradigm shift for the ladder category that would have been lost among thousands of SKUs at the likes of Home Depot, without that consumer knowledge, especially since it cost several times what conventional ladders cost. In the process of familiarizing consumers with the Little Giant Ladder via DRTV, Wing’s company created a new product category and grew from annual sales of $20 million to a peak of almost $200 million.
Yet, some mass retailers may have the impression that direct response creates a competitive channel that diverts sales away from their stores, a contention that Scott Boilen, CEO of Allstar Products Group, marketer of the ubiquitous Snuggie, contends is not true. “We’ve seen many items promoted via direct sell between five to 20 times more at traditional retail than what we sell direct to the consumer. Whatever sales we derive on a direct basis merely enable us to pour more money into advertising and reach a broader audience that overwhelmingly chooses to buy at mass retail.” Like the Little Giant Ladder, the Snuggie defined its category much like Kleenex and tissue are synonymous, an incredibly important ancillary benefit in an era where many products are viewed as commodities, easily knocked off, or even forced to compete with private label or direct importation by these very same mass retailers. “The benefits of longer lengths and the ability to launch DRTV campaigns that become pervasive inoculates our products from brand switching,” adds Boilen.
 The Same, But Different
When one examines the Rogers innovation adoption curve (see Exhibit B), which classifies the buyers of products into categories along a classic bell curve, it is useful to overlay the concept of DRTV as a mean of going to market. The direct method of educating consumers is best employed during the Innovators, Early Adopters and Early Majority phases of a product’s life cycle. Direct response has the best opportunity for success during these stages because an item’s unique selling proposition is still fresh and exciting to the consumer, and, ideally, not yet distributed at retail. This is why DRTV is perfect for the introduction of new technologies or consumer service models and has been employed by companies from NetFlix to TiVo. During this period, competition is frequently far less acute than it will be later, should the product gain broad acceptance.
But there are other enormous benefits to launching direct prior to going to retail. Successful direct programs can create demand from retailers for a product and give the manufacturer leverage when negotiating placement, promotion and margins. With a handful of dominant retailers calling most of the shots nationally, this is vital. Hence as a product reaches the top of the Rogers curve, some marketers will introduce their product at specialty retailers where they have a better chance of avoiding heavy discounts before moving on to mass, where such price reductions are perhaps inevitable. “We could have made concessions on prices that would have given us enormous orders,” Little Giant’s Wing conveys. “But instead we were steadfast about maintaining our minimum advertised price (MAP). You have to have that backbone to sustain your direct program and keep the whole sales machine moving and growing.”
 Another tactic is to create different offer configurations for direct versus key retailers, who each want their own sweetened version of a product so that consumers can’t readily price shop them on an apples-to-apples basis. By keeping the TV offer distinct, marketers can extend the life of their direct program as they expand their retail presence. Having said that, as a product moves into the late majority phase along the Rogers curve, it is common for the DRTV campaign to transition from a profit center into retail support advertising. That isn’t to say that sales from the DRTV won’t continue to offset advertising cost, it is just that the more broadly a product is distributed at retail, the less likely consumers will be to order it off of television. Given the ability to touch it and buy it on-sight versus waiting and possibly paying shipping costs, the majority of consumers will opt for the former. At this stage, short-form DRTV spots often augment long-form programs, because awareness of a product’s benefits and features has been seeded by months or years of an infomercial airing. Short form allows the marketer to infiltrate more dayparts and perpetuate consumer impressions that will translate into sell-through at retail.
Give the People What They Want
At the same time, regardless of channel, clarity of message and availability of product that aligns with consumer demand are paramount. As Carey Grange, executive vice president of direct to consumer for premium skincare marketer Murad, says, “We expect that less than 1 percent of infomercial viewers will actually make a purchase, so it’s critical that we continually refine a touch-point strategy that creates the most likely path to purchase for each new lead generated by the TV media. With that in mind, we make sure that all our other sales doors, including online and bricks and mortar, are merchandised to match the message of our TV creative.”
 As mainline product marketers such as packaged goods manufacturers have seen DRTV-built brands take over shelf space at retail, they too have gotten in the game. “The reality is there is less concern than ever from retailers over competition from manufacturers’ direct business, in part due to retailers’ growing power via consolidation, and their expansion of private label,” comments Ben Smith of the blog “Retail Leverage,” adding, “I don’t think the retail buyer spends much time worrying about you selling your product direct, as long as your product sells well in their stores.” The proof is apparent as DRTV products have migrated out of the As Seen On TV bin to virtually every corner of big-box retail, a testament to consumer demand whetted by another sort of box: the one in their family room.
Peter Koeppel is president of Koeppel Direct, a full-service media-buying agency based in Dallas. Contact Koeppel at (972) 732-6110 or online at pkoeppel@koeppelinc.com or follow him on twitter.com/DRTVBUYER.
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