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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 ...... |
Testing, Tweaking, Retesting, Tweaking ...
By: Peter Koeppel
Published: 09/03 |
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Since media rates have risen over the years, it has become more difficult
for shows to pay out. The reality is that very few shows are an instant hit. Even the most
successful direct response marketers often have to go through several rounds of testing and
tweaking, in order to produce a successful DRTV campaign. This necessitates direct marketers
developing more creative approaches to fixing shows, so as to achieve a profitable level
of performance.
If a show doesn't pay out during a test, then the results need to be analyzed to determine what
contributed to the poor performance. A wide range of issues need to be addressed at this
stage.
Does the product effectively fulfill a consumer need? Was the price too high? Was the offer not
compelling enough to get people to call? Was the right media bought? Was the call volume
high enough? Was the telemarketing closure rate too low? Was there adequate incremental
revenue from up-sells? Was the show effective at communicating the product benefits? Can
the marketer afford to make less money upfront by enhancing the back-end revenue?
A Case Study in How Tweaking, Re-testing Can Pay Off
It may be helpful to illustrate, through a case study, how a client was able to improve the
performance of a DRTV campaign by aggressively reworking various elements of the show. This
client grew interested in marketing a nutritional supplement, because it had performed very
well on one of the home shopping networks. He wanted to translate this success into an
infomercial campaign. Here's what happened:
1. Initial Infomercial Test Failed. The client first produced an infomercial that tested at
a . 3 media ratio ( revenue/media cost = media ratio) . A 1.0 is a break-even media ratio, so this
show was deemed a failure. In analyzing the show, it was determined that the spokesperson who
had worked so well during the live shopping show, didn't come across as effectively in the
infomercial. In addition, the show came across as boring, since it consisted of too many
long testimonial segments.
2. Switch to Short-Form Campaign Improved Results. The decision was then made to scrap
the infomercial, drop the price point and attempt to sell the supplement through a two-minute
commercial. The client chose a new DRTV production company to produce the commercial. The spot
focused more on the most important product benefits, the spokesperson was eliminated, testimonials
were shortened, telemarketing was switched to a more sales-oriented group, which resulted in
dramatically improved participation in the continuity program, ensuring more back-end revenue.
As a result, the media ratio improved to a 1.0.
3. Free Offer. The client then decided to include a free offer to increase call volume, in an
attempt to increase the upfront revenue/ media ratio. The campaign switched to a one-minute
spot, the media buy was then refined, focusing media spending on the networks that performed
most effectively. These changes bumped the upfront media ratio over a 2.0. However, the
customer order cancellation rate then increased dramatically, which adversely impacted
profitability.
This final occurrence led to the recognition that the free offer needed to be extended, in order
to give the user adequate time to realize the benefits of the supplement. From glowing
consumer testimonials, the client knew this was a very effective product and that once
consumers experienced the difference it could make in their lives, they would likely stay
on the product. So now the plan is to go back on the air with a one-minute campaign including
the extended free offer.
Major Changes Can Be Costly
Going through the process outlined in this case history can be costly, since the client had to
produce an infomercial, as well as two and one-minute spots. The larger direct response
marketers can more easily afford to make these types of changes, versus the entrepreneur or
inventor with limited funds.
However, this example helps demonstrate how a show initially considered to be a failure, now
has a chance of succeeding through actively reworking key campaign elements. It should be pointed
out that the level of improvement demonstrated in this case history is not typical. However,
dramatic changes can be achieved through careful management of your campaign.
In today's challenging media environment, it s more important than ever to be able to analyze and
adapt your campaign, based on consumer response. Of course it's also important to know when to
walk away from a product, so you don't end up continuing to fund a campaign that has little chance
of succeeding.
Peter Koeppel is a Wharton MBA and president of Koeppel Direct, a direct response media-buying
firm founded in 1995. He can be reached at ( 972) 732-6110 or via E-mail at
pkoeppel@koeppelinc.com.
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