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"Koeppel Direct's media buying expertise has played an integral role in making my company successful. Koeppel generated so much business for our company, occasionally we have to limit their media buys, in order to handle all of the new business." | |
| - R. Gregg Marketer of Senior Products |
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MEDIA BUYING DIRECT RESPONSE TELEVISION (DRTV) ARTICLE ...... |
It slices! It dices! It boosts ROI!
Why direct response television ads remain viable in the age of digital-video recorders
By: Anne Stuart
Published: 10/07 USPS Deliver
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In today's era of digital video recorders (DVRs), it might seem that traditional
direct-response television ads - those upbeat "call-now" commercials lasting anywhere from 30 seconds to 30
minutes - should be facing the same fate as the dinosaurs. After all, since DVRs can capture programs for later
viewing, audiences seem likely to skip past the ads once they finally sit down to watch.
But industry research indicates that direct response television (DRTV) is alive and flourishing. Spending for
DRTV ads grew by an average of 6.5 percent annually from 2001 to 2006 and is expected to keep growing by 5
percent annually through 2011, according to the Direct Marketing Association. And the DRTV industry "will expand
at twice the rate of the direct-response radio, magazine and newspaper markets" over the next few years,
according to a July 2007 research paper prepared for the Electronic Retailing Association by the Winterberry
Group LLC, a New York City-based marketing-strategy consultancy.
Meanwhile, the genre-which, as the Winterberry report tactfully notes, was "once the exclusive province of a
devoted, almost quirky brand of marketer" - now encompasses a much broader range of products, services,
approaches and format. "The world of Madison Avenue and the world of direct response are starting to merge,"
says Kelly Burke, CEO of Innovative Direct Response LLC, an Irvine, Calif.-based DRTV production company.
While there's still no shortage of DRTV ads for low-cost miracle gadgets, "it's no longer just the slicers and dicers,"
says Burke. "Now it's mortgage companies and insurance companies and Fortune 500 companies, too." Among the industries
now advertising via DRTV are credit-card issuers, financial-services specialists and telecomm providers, according to
the Winterberry report.
Of course, product manufacturers still dominate DRTV and, when blending it with other media, still enjoy brisk results.
Recently, for instance, Vertical Branding, which develops and distributes a wall hook that can hold up to 150 lbs.,
launched a DRTV and Internet campaign with short videos demonstrating how easily homeowners could install the "Hercules
Hook." Traditionally poor in-store sales for the hook shot up almost soon after the campaign started, as did Web and
telephone orders. "If you don't have multiple channels of distribution, you're going to be in trouble," warns Nancy
Duitch, CEO of Vertical Branding.
DRTV ads once relied almost exclusively on viewers' picking up the phone. Now many also steer consumers to Web
sites. "If you give the customer a choice of an 800 number or a Web site, about 30 percent, on average, now go to the
Web site," says Peter Koeppel, president of Dallas-based Koeppel Direct Inc., a direct-response media-buying agency. "Just
a couple of years ago, it was 5 or 10 percent." To goose ROI even more, most DRTV campaigns are also now mixed with
banner ads, search campaigns and a Web site. They also include a direct-mail component, as marketers typically follow
up with brochures, videos, DVDs, catalogs, coupons and other materials.
For many companies the appeal of DRTV rests in its speed and malleability. "You see results very quickly" as customers
respond or fail to do so, Burke says. Because ads use highly specific phone numbers or URLs, marketers can determine
almost instantly what works and what doesn't and can adjust campaigns accordingly. Meanwhile, growing specialization
among cable networks makes it easier to target viewers. "If you're marketing household products, you have the Food
Network or HGTV," says Koeppel. "You can be pretty precise in targeting your message to reach certain
demographics."
Those in the DRTV industry say the fast-forward factor isn't as big an issue as people had originally feared, largely
because direct-response ads tend to run on cable and satellite stations that people don't record as much. "We don't
advertise on regular-program stations," says Duitch. "We do one and two-minute commercials on CNN and the Weather
Channel and other stations that people just watch."
What's more, certain viewers for instance, those considering investing hundreds of dollars in home gym equipment or
adjustable beds are still likely to sit through half-hour infomercials, according to TiVo Inc.'s StopWatch data service,
which measures program and commercial viewership in DVR-using households nationwide.
Finally, today's DRTV ads are designed to build ongoing relationships through, for instance, automatic shipments of
recurring orders and follow-up mailings with special offers and new product samples. Burke puts it this way: "It's not
just about the initial sale; it's about everything that happens after that person contacts the seller."
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