 |
 |
|
"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 |
|
MEDIA BUYING DIRECT RESPONSE TELEVISION (DRTV) ARTICLE ...... |
The 10 Most Important Marketing Mistakes To Avoid When Testing Or Utilizing DRTV
By: Peter Koeppel
Published: 02/06 - Advance News Magazine |
| |
If you've ever dreamed of marketing the next big product sold on TV through an
infomercial, here are some mistakes you need to avoid to increase your chances of success. Direct
response television (DRTV) can be an excellent platform for marketing innovative products directly to
consumers. However, it's important to understand the many components of a DRTV campaign before
venturing into this method of advertising.
1) NOT WORKING WITH EXPERIENCED DRTV VENDORS
Working with vendors that are experienced in all areas of the DRTV marketing process will greatly enhance
your chances of success. It's essential to work with an experienced DRTV production company, media buying
firm, telemarketing firm, card processor and fulfillment company. Only a small percentage of DRTV
products are a hit, but every so often an inventor or direct marketing company will come up with a
DRTV product that is a home run. More often than not, these marketers will have aligned themselves
with seasoned DRTV experts.
Make sure the vendors you select have worked on a wide range of DRTV campaigns. Ask them for case
histories so you can evaluate their performance and capabilities. Review the TV production
company's commercial reel, so you can gain a better understanding of the quality of their work.
An agency that produces branding and image advertising rarely has the capability to produce an
effective DRTV campaign. DRTV commercials are designed to sell and brand/image advertising is
designed to build awareness.
Experienced DRTV media buyers know the right networks -stations -dayparts to purchase to make your
product a winner on TV. Through careful research, an experienced direct response media buying firm
understands how to reach your target audience most efficiently and should have the leverage to access
low media rates for the test and rollout of your product/service. They should also have direct
response media buying software that links up with the telemarketing firms and allows them to
track and evaluate media performance by network/station and daypart (time of day).
An experienced direct response television telemarketing firm has the capability to effectively sell,
can handle large call spikes, provides real-time access to results and records all calls so you can
listen to them and evaluate performance. This information will allow you to adjust campaign elements
such as the price, offer and operator script, based on results and consumer feedback.
Your fulfillment partner should have the ability to fulfill orders on a timely basis both from the
telemarketing firm and through the web. But there's a great deal more that you should expect from
your fulfillment company besides fulfilling orders. They should have a call center to answer customer
service calls, provide warehousing, inventory control, tracking, etc.
Not every bank can process credit card orders from a DRTV campaign. The merchant processor needs to be
able to handle a large number of orders and they should be connected with your fulfillment house, so
that they can fulfill your orders. There are merchant processors who work specifically with the DRTV
industry and it's recommended you hire one of those processors.
2) NOT HAVING ENOUGH MARKUP
In order to cover the cost of a DRTV campaign, including the media, telemarketing, card processing
costs, etc., it's generally necessary to have a 5:1 or better product to cost of goods markup. Not
having a sufficient markup will increase the odds against your show being successful.
3) UNDERSTANDING THE BREAKEVEN MER AND CPO
Prior to launching your media test, it's vital to understand what type of return on investment (ROI)
you'll need in order to attain breakeven performance. Your DRTV media buying agency should provide
you with the worksheets that allow you to calculate the breakeven Media Efficiency Ratio (MER) and
Cost Per Order (CPO). Once you determine these measurements for your campaign, you will be able to
better evaluate the success of your DRTV program. Be sure to work with a direct response media
buyer who is familiar with these metrics.
4) TRYING TO MARKET A PRODUCT THAT DOESN'T HAVE MASS APPEAL
The most successful products sold through direct response TV are products that have mass appeal. TV
targets a fairly broad audience, so products that appeal to broader demographic groups such as adults
25-54, have a greater chance of becoming a hit than a product that for example just targets men
18-34.
It's also important to keep in mind that certain categories of products have traditionally worked
best in direct response television. These include health and beauty, fitness, household, hardware,
lead generation, consumer electronics and business opportunity products. If a product doesn't fit
into one of these categories, the chances of it becoming a mega hit DRTV product will be
lessened.
5) NOT UTILIZING UPSELLS AND CONTINUITY PROGRAMS
Incorporating upsells and a continuity program into your DRTV campaign can help to generate additional
revenue, which can make your campaign profitable. An example of an upsell would be selling someone a
second bottle of a supplement at a discount or a related item when they call in to order.
A continuity program involves automatically shipping the product each month to the consumer, with
their permission, so you establish an ongoing stream of revenue. If your DRTV program has a
continuity component, then your campaign can often be less profitable on the front end, because you
are insured of an ongoing income stream once the consumer is enrolled into the continuity plan. As
a general guide, you can expect 30-40% of consumers to enroll in a continuity program and they stay
in the program an average of 3-6 months, which can vary depending on the product.
6) NOT DEVELOPING A COMPETITIVE PRICING STRATEGY AND A COMPELLING OFFER
Make sure your product has a competitive price and that the offer will capture the target audience's
attention. If your product is priced at $29.95 or under it can generally be sold through a short
form commercial (:120, :60). Products priced over $29.95 are usually sold most effectively through
an infomercial (28:30). Lead generation campaigns can be marketed through both short form and long
form direct response TV campaigns. Develop and test several offers, in order to determine the offer
that will generate the best results. The offer consists of the product, pricing, number of payments,
etc. By offering the consumer an incentive to call now, through a discount or a free, related item
can be an effective method of generating more calls and additional revenue.
7) AVOID PRODUCTS THAT DON'T SOLVE A PROBLEM AND AREN'T DEMONSTRABLE
Products that allow consumers to quickly solve a problem work best on TV. Television provides the
marketer with an ideal environment to demonstrate how a product works and how it can benefit the
consumer. Products that are highly demonstrable work particularly well in DRTV advertising, since
the format provides the marketer with ample time to show the consumer why their product is worth
purchasing.
We buy media and do the campaign management for the leading ladder infomercial product. The ladder
turns into 25 different ladders. Their infomercial does a terrific job of demonstrating all the
ways you can use it around the home and how it can make your life easier, so it's a perfect product
for an infomercial format.
8) NOT UNDERSTANDING A DRTV MEDIA TEST
A direct response TV media test is designed to provide the marketer with a read on the viability of
successfully selling their product on TV. The media test usually runs over one to two weeks and
$10-$20,000 is typically budgeted. A short form media test is often run on national cable and
satellite networks, since they deliver the best CPM's (Cost Per Thousand Viewers reached).
An infomercial media test typically consists of airings on smaller national cable and satellite
networks and local broadcast stations. The larger national cable networks are usually too expensive
for a media test. There are 1700 local broadcast stations, so there are some excellent infomercial
media deals in local markets.
The media buying agency will provide you with daily and weekly reports that will show how each
network/station performed during the test. By analyzing these results, the media buyer will be able
to buy more of what's working and to drop the networks/ stations/dayparts that are not working, in
order to optimize performance.
During the rollout phase of the campaign, the idea is to build up the media budgets, while
maintaining a profitable ROI. For example, if you are spending $100,000/week in media and
bringing in $200,000 in revenue, you are going to make more profit than buying $10,000/week in
media and bringing in $20,000 in revenue.
9) NOT UTILIZING THE WEB
The web has now become a key component of DRTV campaigns. Between 15-50% of direct response TV
purchases are now occurring on the web due to 60% of people who are surfing the Internet are
watching TV at the same time, so it's easy for them to log onto your website. Approximately 50%
of the homes now have a high-speed broadband connection, so they can easily view videos on the
web. It's a good idea to run your commercial on your website. This allows consumers to watch it
again if they missed part of it when they saw it on TV. The website also serves as a tool to
further educate the consumer about your product and it's benefits. It's also essential to have
website that is designed by an experienced professional, in order to help maximize your web
orders.
10) NOT TAKING A DRTV PRODUCT TO RETAIL
Only a small percentage of the direct response TV audience will actually purchase your product off
TV. A DRTV campaign can help drive retail sales and build awareness for your product among consumers.
With a hit DRTV product, retailers will be anxious to stock your product, due to strong consumer
demand.
Typically, successful DRTV products are taken to retail 6-12 months after the commencement of the TV
campaign or when TV sales begin to drop off. Retail sales for a DRTV product can often amount to
5-10 times the TV sales, so retail definitely should be considered as part of your DRTV campaign
planning process. It's important to note that your DRTV sales may begin to drop off once you take
a product to mass retail, so the timing of the transition to retail is critical during this stage
of the campaign. Often DRTV marketers take their product to smaller retailers before taking it to
Wal-Mart, since Wal-Mart will want the lowest price, which will impact profitability.
A great deal of research, planning, and hard work go into developing a winning DRTV campaign.
Understanding all aspects of the process is critical to your success. By avoiding these ten common
DRTV marketing mistakes, you can greatly increase your chances of developing the next hit on TV.
This article is featured in;
ADVANCE News Magazine
Broker Agent News
|
| |
|
|
|
