March 2010 – Channel Crossing: Radio

Which Should Come First: Radio or DRTV?

Should you test radio before you launch a DRTV campaign? Yes! Should you try radio after you’ve built success on television? Absolutely! The fact of the matter is that radio and television work very synergistically, regardless of which medium comes out first. We have had a number of clients test radio first, hone the message, understand the drivers and build up some traction before jumping into DRTV–and we’ve similarly taken successful television campaigns and converted them into DR radio stars. Here are the lessons learned from either progression.

Radio Takes the Lead
In the increasingly competitive and risky world of DRTV, there is a lot to be said for the ability to test multiple creative messages and offers, clearly identify your most responsive audience and train your inbound team prior to launching a DRTV campaign. That is one of the greatest values that DR radio has to offer–it allows the marketer a “laboratory” where he or she can test numerous variables that have a direct correlation to their ultimate TV campaign–for a fraction of the price associated with a typical infomercial campaign.

This “real world” approach–where you accumulate both experience and empirical data, not to mention cash flow–is far more useful and accurate than focus groups or other pre-launch surveys. Granted, not every product is appropriate for a “radio first” strategy, but we have seen it pay huge dividends for players in the lead-generation space.

Two lead-generation clients–both of whom had started out in direct mail before considering a move into electronic media–approached us to conduct national tests. We started with relatively modest budgets and focused primarily on creative testing. The ability to test numerous creative messages simultaneously is one of radio’s greatest strengths and, as is often the case, we found that some spots worked extremely well, while others fell flat. This variance is key–too many marketers try radio with a “one-and-done” approach whereby either the first spot succeeds or the medium is a bust, when nothing could be farther from the truth. You need to test multiple radio spots or else you risk pulling the campaign prematurely.

As part of the normal testing protocol, we expanded the placement of the winners, pulled the losers and immediately saw cost-per-lead (CPL) results that met or exceeded each client’s expectations. We also tested numerous offers, inbound scripts and other key variables to not only improve the CPL, but ultimately lower the cost per order (CPO) well under the client’s target.

The key to the story is not what we did, per se, but that a radio-first approach allowed both clients to try a number of key elements of the campaign in practice before spending the tens of thousands of dollars necessary for a television campaign. DRTV was always their goal, but radio served a very strategic role in conditioning the campaign before being thrown into the television ring. The end result: both campaigns went on to be massively successful on television using the exact scripts, offers and other elements that we had proven to be successful on radio. Ultimately, the volume of results from television was significantly larger than our radio tallies. However, that success may have never come to pass if it had not been for radio contribution pre-TV.

Radio Follows Suit
One of our current success stories on radio faced the daunting challenge of living up to the expectations and performance levels established on television. Suffice it to say that this campaign was a mega hit on TV and frankly, some members of the client’s team felt that radio was a waste of time. Not only did they expect radio’s results to be way off the mark monetarily, but honestly, they just did not see how we were going to be able to reproduce their “recipe for success” from television.

The fact is that we didn’t reproduce their “recipe.” Instead, we came up with one of our own, totally unique to radio and its particular capabilities and characteristics. The end result was a radio-specific approach with results as profitable (or in some cases, more profitable) than those coming from DRTV.

The point of the example is to show that in order to allow radio to be successful, you cannot expect it to march in beat with the exact methodology or messaging that may have proven successful on television. Contrary to what some believe, radio is not “television without the pictures.” It is a unique medium that has its own means of conveying a value proposition and moving the audience toward response.

In this example, the audience was certainly familiar with the product from television, but the only way they related to it was through the carefully crafted–and in their minds, potentially artificial–medium of the infomercial. The testimonialists weren’t people they knew or related to on a personal level, so how was that suspicious listener to know whether or not the product really worked, rather than simply being skillfully packaged?

Enter the on-air radio personality and their credibility with that audience. Now, instead of an anonymous testimonial, you have someone the audience knows, relates to and trusts saying, “I’ve seen it on TV, too, but now I’m going to see if this thing is real or not.” Once that on-air radio personality validated that the product did perform as well as the examples shown on television, the audience’s trust was won over and the response was overwhelming.

Radio definitely benefits from the awareness and messaging that may precede it on television, but in order to be successful as a stand-alone medium, it needs to express that value proposition in its own unique way. Too many marketers come to radio with a “just do it like we did it” mentality, and then when radio fails, they blame the medium instead of the methodology. Again, not every product that works on TV is going to work on radio, but for those who do have the potential for cross-over, the approach should be one of “here’s what worked for us–please take from it what you will and do whatever you need to make radio its own profit center.”

Buck Robinson is president and CEO of Glen Allen, Va.-based Robinson Radio Inc. He can be reached at (804) 726-6400, or via e-mail at buck@robinsonradio.com.

March 2010 – Channel Crossing: Mobile

The Battle to Shape the Future of Mobile Computing

Apple and Google are engaged in an epic battle to profit from mobile computing, as mobile phones become the computers of the future, according to a recent article in BusinessWeek. These two companies are similar in many ways. Both are admired by consumers, they each have over $20 billion available for research, product development and acquisitions, visionary founders, competing smartphones, web browsers, music and tablet computers, which positions them as major rivals moving forward.

Google became a direct competitor to Apple’s iPhone with the recent introduction of its Nexus One smartphone that utilizes Google’s Android operating system. Apple recently purchased Quattro, which specializes in mobile advertising that targets consumers based on their behavior, after being outbid by Google for mobile ad company AdMob. With the acquisition of Quattro, Apple is aiming to make the current form of mobile search obsolete by developing new types of mobile ads.

MOBILE MARKETSHARE
Steve Jobs is trying to revolutionize mobile advertising the same way he changed music players and phones. One way he could accomplish this is by using Apple’s geo-location technology to deliver ads that are relevant to your location. Apple also has access to valuable consumer information, including which apps, videos and songs mobile users downloaded and detailed customer data such as credit card numbers and home addresses that will allow them to combine advertising and e-commerce in new ways, per BW.

It’s predicted that within five years, more people will access the Internet through mobile devices than through desktop PCs. Mobile advertising today is only $2 billion compared to the $60 billion online ad market. Mobile search is still in its infancy, but it will account for 23 percent of all searches in 2016, up from 5 percent today. So there’s potential for Google and Apple to tap into billions of dollars in revenue through the sales of mobile phones, software, ads, apps and services as the mobile market grows.

The key to success is through Google or Apple figuring out a way to make mobile more profitable by winning the mobile ad battle and sharing the revenue with app developers. “The mobile platform that creates the most ways to make money wins,” noted David Hyman, CEO of MOG, in BusinessWeek. Apple has a big lead over Google with 125,000 apps developed for Apple devices vs. only 18,000 for Android devices.

Google CEO Eric Schmidt believes that mobile ads will become more important than PC advertising because of the personalization and localization, according to BW. Schmidt speculates that mobile phones might one day be free with advertising paying the way. “If Google could do that, they would be untouchable. Apple wouldn’t be able to come up with an answer for that,” commented technology consultant John Metcalfe to BW.

The rivalry between Google and Apple should be fascinating to watch as these two technology titans battle to dominate the mobile computing space in the years to come.

Peter Koeppel is a Wharton MBA and president of Koeppel Direct, a full-service media buying agency based in Dallas. He can be reached at (972) 732-6110, or via e-mail at pkoeppel@koeppelinc.com.

March 2010 – Channel Crossing: DRTV

DRTV: Down, But Not Out

Some television networks, and even some agencies, are questioning whether DRTV has a future. A panel at ERA’s Great Ideas Summit even asks the question: Will DRTV go the way of the newspaper industry? It is easy in difficult times to see nothing but gloom and doom. And there is no denying the fact that these are difficult times for media and marketers of all stripes.

But let’s step back, take a deep breath and exhale slowly. DRTV isn’t going anywhere.

THE DRIVING FACTORS
Networks and stations are concerned about DRTV media rates that have been on a steady decline for several years. A time period that might have sold for $5,000 five years ago might be sold for less than half that rate today. There are various reasons for this decline including: the dilution of the audience through the increase of new networks and expansion of digital cable; increased daily Internet usage (Twitter, Facebook and YouTube); the opening up of more paid programming time to DRTV advertisers as traditional ad spending continues to decline; and, of course, we can’t overlook the poor overall economy.

As a result of all this, we hear rumblings from networks that they will have to insert station programming back into what is now being sold as paid. But, the reality is that the networks will not generate any more revenue from regular programming–and, in fact, probably will generate less–than they do from DRTV. Ultimately, station programming would still be competing for the same viewership as paid programming, and subject to the same degree of audience segmentation.

At the end of the day, networks know that DRTV provides a steady revenue stream, even if it is smaller than it once was. This would explain why networks are actually increasing–not reducing–their paid programming inventory. With ministerial and humanitarian programs also being hit hard by the poor economy, these organizations are not paying large premiums to the networks for long-term commitments as they did in the past, which is also creating a greater network need for DR dollars.

From the client perspective, there remains plenty of interest in getting DRTV schedules on the air. The clients still count on the media, as long as the rates are in line with response. Smart marketers will continue to produce hit shows that can spend $1 million a week on television. In other words, there is an ample supply of DRTV product/content and money ready to be spent. And there’s still a very healthy market for a hit DR show.

Peggy Gobel is vice president, director of cable media at Cannella Response Television. She can be reached at (262) 763-4810, ext. 31, or via e-mail at pgobel@drtv.com.

March 2010 – Channel Crossing: Legal

Weight-Loss Battles Heat Up

The New Year ushers in the height of the diet season during which marketers of weight-loss programs and products vie aggressively for their share of the marketing pie. This diet season, however, has brought increased challenges for marketers of weight-loss products.

First, the Federal Trade Commission’s (FTC) newly issued testimonial and endorsement guidelines, which took effect in December 2009, have required most marketers of weight-loss products to reevaluate and edit their existing shows for compliance with the new guidelines. Absent clear direction from the Commission, marketers struggled to find creative ways to adapt existing shows to the new guidelines and to then secure clearance from the networks, some of whom have taken a somewhat conservative view of the guidelines’ requirements.

Online marketers of weight loss, business opportunity and other perceived high-risk products and services loss were greeted following the New Year with news that their merchant accounts were being shut down by MasterCard. Many of the impacted sites involved the marketing of products via free trials or other forms of negative option marketing, which are currently subject to intense scrutiny not only by the credit card companies but by the state attorneys general, the FTC and the class action bar. While the state of negative option marketing and card-on-file transactions are outside the scope of this article, it is safe to say that the landscape for these transactions is rapidly evolving and the future of post transaction marketing–at least in the online environment–remains uncertain.

While marketer attention has thus understandably been focused on regulatory and merchant account issues, a recent lawsuit filed by Weight Watchers against Jenny Craig serves as a striking reminder that your own competitors can be a powerful source of potential challenge, as well.

WEIGHT WATCHERS V. JENNY CRAIG
In mid-January, Weight Watchers filed a lawsuit under Section 43a of the Lanham Act against Jenny Craig. The Lanham Act is the section of the trademark law that allows competitors to sue one another over false and misleading advertisements. Remedies under the Lanham Act include injunctive relief and monetary damages, which can include treble damages where the deception is willful. At issue in this lawsuit are claims by Jenny Craig, in print, broadcast and online advertising that clinical studies prove that Jenny Craig’s clients lost over twice as much weight as those on the largest weight-loss program.

Although Weight Watchers is not explicitly named in the advertisements, the reference to the largest weight-loss program is a clear reference to Weight Watchers and there is ample case law supporting the proposition that a competitor does not need to be specifically named in order to bring a claim for false advertising against a competitor.

According to the Weight Watchers complaint, in order to support this claim, Jenny Craig relied on the results of two separate and independent tests–one conducted by Weight Watchers over 10 years ago and another conducted by Jenny Craig. The Weight Watchers study, which was conducted 10 years ago, was a randomized two-year trial that was actually designed to compare the weight-loss and health benefits achieved and maintained through self-help weight loss with a structured program. According to the complaint, the Jenny Craig study was designed to test in a randomized controlled trial whether participation in the Jenny Craig Centre-based program and/or the Jenny Direct program is associated with greater weight loss at six, 12 and 18 months and whether weight loss is maintained over a 24-month period compared to self-help conditions. Thus, neither study was designed to directly measure weight loss achieved on one program as compared to the other.

Weight Watchers has alleged in its complaint that the studies upon which Jenny Craig is relying cannot support the advertising claims at issue. First, according to Weight Watchers, although Jenny Craig’s advertisement compares Jenny Craig’s current weight-loss program to Weight Watchers’ current weight-loss program, the Weight Watchers clinical study was conducted on a program that was in existence over 10 years ago and is at least four generations removed from the current Weight Watchers program. Because the Weight Watchers program has undergone significant changes and modification during this 10-year period, Jenny Craig cannot compare the results of its weight-loss program to the results achieved on a Weight Watchers program that is no longer in effect.

Secondly, and perhaps most significantly, Weight Watchers has alleged that in order to support a comparative claim between Weight Watchers and Jenny Craig, Jenny Craig must conduct a randomized head-to-head test between the current Weight Watchers and current Jenny Craig programs. In essence, Weight Watchers is alleging that the only type of testing that can support a direct comparative claim between the two programs is a direct head-to-head test between the two. If Weight Watchers prevails on this point, this would certainly place at greater risk many current weight-loss advertisements that contain broad and often unqualified superiority claims without any corresponding head-to-head testing.

THE RAMIFICATIONS
This current battle between Weight Watchers and Jenny Craig is the latest in the series of brand wars that dominated the traditional advertising marketplace during the past year. A comparative advertising lawsuit under the Lanham Act can be a very powerful tool through which competitors can attack each other’s advertising. While direct response marketers have not resorted to Lanham Act litigation with the same fervor as traditional marketers, as the economic climate continues to place pressure on marketers and as branded products become more commonplace in direct response, it is possible that the brand wars trend will find its way into the direct response community as well. At the very least, this case between Weight Watchers and Jenny Craig is one that should be closely monitored by the direct response community, as it will certainly establish some important precedent regarding the type of substantiation required for these types of comparative claims.

Linda A. Goldstein is a partner and chair of the advertising, marketing and media division at Manatt Phelps & Phillips LLP in New York. She can be reached at (212) 790-4544.

March 2010 – Feature: The Mobile Frontier

An Examination Of Recent Legal Developments In Mobile Advertising Along With Practical Considerations For Direct Response Retailing Over The Mobile Channel

By Karen L. Neuman

The accelerated growth of mobile commerce, combined with the acuity of location-based applications makes it possible for direct response retailers to use the mobile channel for locally targeted mass marketing. One estimate, according to Mobile Marketer, puts worldwide mobile phone connections at 4 billion; while another by Neustar and SMS Mobile Marketing predicts that mobile revenue in the United States will reach $3.3 billion by 2013. SMS text messages dominates mobile advertising in markets like the U.S.

Regulators and courts are trying to keep pace, attempting to balance business interests in accessing consumer data and tracking habits for operational and transactional efficiencies against consumers’ interest in protecting privacy and controlling the collection, storage and use of their information.

This article highlights some recent legal developments that could be important as you consider adding the mobile channel to your ad campaigns, and offers some practical tips that can be taken to address potential risks.

FTC PRIVACY ROUNDTABLE DISCUSSIONS
The Federal Trade Commission (FTC) has broad jurisdiction to protect consumers from unfair and deceptive practices and promote fair competition. It has used these powers to protect against fraudulent or deceptive advertising. A familiar example for the direct response industry are the October 5, 2009 amendments to the agency’s long standing guides concerning the use of endorsements and testimonials in advertising. The FTC has also exercised its authority to engage the industry and the public in formulating an appropriate framework for protecting privacy and ensuring data security in online behavioral advertising and the mobile marketplace.

The linchpins of the current approach to privacy in the United States are privacy policies, industry self-regulation and nonbinding fair information principles (FIPs). The FTC is now examining, through a series of “privacy roundtable discussions,” whether this approach is sufficient given perceived new risks to privacy posed by the proliferation of more invasive data collection and tracking technologies.

The FTC seems to be particularly interested in: 1) the convergence of offline data collection technologies–such as biometrics and loyalty card analytics–with online data to create a ubiquitous data environment; 2) technologies such as “flash” or other “super” cookies that override consumer privacy preferences; 3) the sharing of social networking data with third parties, including mobile applications for advertising; and 4) how far down the chain consumer preferences should be honored as between first and third parties.

The roundtables are not formal rulemaking proceedings. They do suggest, however, that the FTC is questioning whether the current approach to privacy and data protection goes far enough. It is unclear if there will be immediate regulation. One probable outcome is increased enforcement under the Federal Trade Commission Act. Other plausible scenarios include revisions to the FTC’s FIPs and heightened degrees of protection for sensitive data, such as individual financial or health information. In addition, the record developed from the roundtables could form the basis for an FTC report to Congress in which greater rulemaking authority is sought. This could, in turn, result in proceedings to codify existing guidelines and some of the proposals discussed at the roundtables. These could include regulations aimed at bad actors with safe harbors for other entities that meet specified requirements.

Given this fluid regulatory environment, there are some practical steps that can be taken when planning a mobile ad campaign.

• Comply with industry best practices and be familiar with the FTC’s Online Behavioral Advertising Guidelines.
• Disclose the extent of tracking, retention and uses of data, including your policies for sharing with third parties, and provide opportunity for meaningful notice and consent. Tailor disclosures to mobile device screen size and resolution.
• Undertake a review of your terms of service, privacy policies and data security policies, updating them as necessary to address new technologies or to reflect actual or anticipated changes in the law.
• Refrain from using flash cookies, other super cookies or technologies that override consumer privacy preferences. Refraining from using these tools is a good way to differentiate your company from others. Otherwise, fully disclose their use with clear opt-out directions.
• Collect only as much information as necessary for the specific transaction and retain it only as long as necessary.

SMS TEXT ADVERTISING
SMS text advertising involves sending no more than 160-character messages directly to customers’ mobile phones to deliver information about a brand or product, direct them to websites or call centers, or otherwise engage them with mobile coupons, contests and sweepstakes entries or products like DVDs. SMS enables marketers to target and reach an audience that has elected to receive messages and is seen as more likely to respond with greater immediacy than they would with other media.

The features that make SMS appealing to advertisers also raise red flags for regulators and consumer groups. They include the uniquely personal, location-based nature of mobile phones and the corresponding ability to mine, acquire, retain and share individual data for profiling and targeting. SMS technology increases the potential for the receipt of unsolicited text messages or mobile spam in violation of federal and state consumer protection laws. In addition, multiple parties are typically involved at various stages of creating and sending SMS text ads, increasing the possibility that a customer’s consent to receive content from one party will be improperly shared with third parties. This in turn heightens the risk that a customer’s stated preferences will be ignored and their information misused.

A federal appeals court in California recently addressed these concerns in Satterfield v. Simon & Schuster. In that case, the plaintiff brought suit under the federal Telephone Consumer Protection Act (TCPA) for an unsolicited text ad received by her son after she downloaded a free ringtone for his cell phone. The ringtone was downloaded from a website operated by Nextones. The text ad was sent as part of a book promotion launched by publisher Simon & Schuster. The publisher outsourced the campaign to a marketing firm that obtained lists of cell phone numbers, including the plaintiff’s, purchased by another entity from various websites, including Nextones. During the course of the ad campaign, five companies accessed or acquired the plaintiff’s phone number before the text ad was ultimately received some two years after the ringtone was downloaded.

First, the court had to consider whether the TCPA applied. The court concluded that it did, finding that 1) SMS messages are calls within the meaning of the statute, and 2) equipment with the capacity to store, generate randomly or sequentially dialed numbers and call those numbers is automatic dialing equipment within the meaning of the statute. It returned the case to the lower court to determine whether the equipment used to generate the SMS message met those criteria.

The court went on to examine whether the consent given for the ringtone applied to each of the entities in the campaign chain. The court concluded it did not. The third parties involved in the campaign were not “brands” or “affiliates” to which the original ringtone consent applied because they shared no corporate structure or corporate relationship with Nextones. The fact that Nextones licensed its subscriber list for use in this campaign was found to be an insufficient degree of affiliation for purposes of the reach of the Plaintiff’s consent.

This case offers some practical “dos and don’ts” when planning an SMS campaign in the U.S.:

• Know your privacy policies and TOS agreements and follow them.
• Know which law(s) could apply based on the equipment used to store and disseminate the campaign’s SMS.
• Specifically identify the ad campaign and the entity that will be sending the SMS text. Do not send messages to a consumer who has not given express consent to receive these messages. Confirm that third parties with whom you contract comply with required consent(s).
• Do due diligence on lists of cell numbers used for the campaign to determine the precise nature and extent of provided consents.
• Do due diligence on all companies in the campaign chain that obtain a consumer’s mobile number for compliance with the consumer’s consent, including any stated restrictions.
• Comply with industry best practices governing recommended disclosures.
• Although not an issue in the case, refrain from engaging in practices that could reach or attract children. If you do engage in those practices, make sure you comply with applicable laws and regulations.

This case and the FTC roundtables suggest that the interests of direct response retailers and those of your customers may be more closely aligned than you might assume. While it may seem burdensome to implement some of the practical steps suggested here, doing so could differentiate your company, creating a competitive advantage and building good will for your brand or product.

FCC “NET NEUTRALITY” RULEMAKING
An important proceeding that could affect how direct response retailers use the mobile Internet to reach customers is the Federal Communications Commission’s (FCC) net neutrality rulemaking proceeding.

The FCC has jurisdiction over domestic and international communications involving wireline, wireless, satellite, radio and cable. The D.C. Circuit Court of Appeals is considering a case that could clarify the FCC’s jurisdiction over the Internet and the extent of its authority to regulate mobile and other broadband Internet Service Providers.

In October 2009, the FCC initiated a proceeding to consider draft rules that would require broadband ISPs, including various providers of mobile wireless broadband, to provide Internet access for unaffiliated applications, services, content and devices on a nondiscriminatory basis and subject to “reasonable” and “transparent” network management practices.

There are two aspects of this rulemaking that direct response retailers should be aware of.

First, the FCC is considering whether it will permit ISPs, including mobile broadband providers, to employ certain practices to manage traffic over their networks. Some of these practices include using tools that enable ISPs to distinguish among different classes of traffic for prioritization and scheduling transmission, particularly for high bandwidth use applications like video, gaming, and streaming content. Other proposed network management practices include usage-based mobile data pricing or time of day pricing.

Second, the proposed transparency requirement, if adopted, will require ISPs to disclose their network management practices. It is possible, therefore, that ISPs will compete on the basis of these practices, thus enabling businesses, including direct response retailers, to “comparison shop” as they formulate their mobile advertising plans. With sufficient competition, for example, time of day pricing could be a factor in launching an SMS contest or other campaign. The potential for latency could vary from one carrier to another and should be similarly factored into when a campaign’s SMS messages are sent. Similar consideration should be given, if possible, to terms in agreements among ISPs disclosing the extent to which transmission prioritization determinations will be honored as traffic is handed off from one to another.

In the context of this rulemaking, the FCC is exploring ways to find new spectrum (the range of electromagnetic frequencies allocated for various purposes, including mobile communications), and better use existing, underutilized spectrum (through compression technologies, sharing and other arrangements) to support the rollout of 4G mobile networks. Increased spectrum availability could enhance mobile advertising by adding capacity to mobile networks. In order to add this capacity, the FCC could try to create incentives to encourage existing spectrum holders to relinquish or share their spectrum. For example, the FCC could guarantee broadcasters distribution of their content in exchange for their spectrum. It would be important to know the practical consequences of any such agreements for purposes of planning your campaigns and anticipating the potential for latency as a result of these agreements.

THE TAKEAWAY
This article examines some recent federal regulatory initiatives and legal proceedings that you should be aware of when adding the mobile channel to reach consumers. You should also be familiar with applicable data protection laws, including those intended to guard against identity theft, and pertinent state consumer protection and common law–topics that are beyond the scope of this article. There may also be instances where laws of foreign jurisdictions apply, and you should know when those laws are triggered.

A common theme that connects the proceedings discussed here is a focus on meaningful disclosures of terms and conditions that enable users to make informed decisions about participating in the mobile marketplace, whether the user is a consumer receiving content over their mobile device or a DR retailer seeking optimal circumstances for delivering mobile advertising messages to consumers. Companies that take proactive measures to address these issues will be better positioned with respect to potential enforcement or other legal proceedings. They will also put themselves at a competitive advantage in the mobile marketplace as the mobile channel expands beyond existing technologies and mobile marketing continues to mature.

Karen L. Neuman is a partner in St. Ledger-Roty Neuman & Olson LLP, a Washington, D.C. law firm specializing in technology, media and telecommunications. She can be reached at kneuman@slrno.com.

February 2010 – Column: Product Talk

In last issue’s installment of Product Talk–your virtual preview to upcoming direct response products like those premiering at ERA’s twice-annual conferences–we showcased three interesting new product ideas. We also asked you–as the leading direct response experts–to submit your assessment of the products, together with suggestions for marketing campaigns and predictions for success.

We’re pleased to report that we received detailed commentary from three of the industry’s foremost experts. Bill Sullivan is president of William Sullivan Advertising, a full-service direct response agency that specializes in per inquiry, pay for performance, and remnant spot radio and television campaigns. The agency has many years of experience marketing a wide range of products, from skincare products to nutritional supplements, weight-loss aids, hair restoration and, yes, even pianos.

Marcia Waldorf, along with her partner Jim Crawford, founded Waldorf Crawford in 1989. It’s an award-winning direct-response production and marketing company with services ranging from creative concept and scripting, to first-quality DR production for broadcast, cable, satellite TV and Internet distribution. Waldorf Crawford works closely with clients to achieve and surpass their campaign expectations and opportunities, including webisodes, e-mail programs and social networking sites.

Live Link TV Inc. was formed by Karen Hyman in September of 2005. As a full-service marketing company, Live Link TV offers opportunities, to both corporate clients and small inventors alike, to maximize profits by developing a strong shopping channel business without the upfront expense of full-time employees in this very specialized marketing arena. Live Link TV offers a proven turnkey approach to success through the world’s largest shopping channel: QVC.

I interviewed Sullivan, Waldorf and Hyman regarding each of the three products and highlight their responses for you below:

Mike Hughes is reputation correspondent at Reputation Media in Boulder, Colo. To participate in future installments of Product Talk–as a product inventor or as an expert analyst–e-mail Hughes at producttalk@gmail.com. To view the next three new product videos, go to youtube.com/producttalkshowcase.

To offer product analysis in a future column or to join our virtual tradeshow networking, visit www.YouTube.com/ProductTalkShowcase, e-mail us at ProductTalk@Gmail.com or call (925) 210-9005.

Product Video #1: Speed Typing with Almena – Retail $39.95 The Almena Method is an innovative training program that teaches computer keyboarding and touch typing in one lesson for a $39.95 download. That’s right. In one 20-minute lesson, Almena teaches the entire 26 letters of the alphabet on the computer keyboard. Anyone can learn to touch type through this amazing method. Eliminate typing errors and increase speeds to 99 words per minute and beyond. With almost 2 million users, this incredible method is rapidly becoming the primary teaching tool for learning to type, which is now a necessary life skill for almost everyone, from kids to CEOs.

Sullivan: I was impressed with it. Eliminating typing errors and increasing speed to 99 words per minute? With 2 million users? At less than $40 to download a product with this sort of innovation, I think it’s an attractive solution to a big problem: most people type way too slowly and make errors.

I would definitely try to get it into as many people’s hands as possible. I would give the customer a risk-free trial, a 100-percent guarantee allowing a return within 30 days if they’re not happy–something like that where the person has no reason not to try it.

Certainly a radio ad at 60 seconds could get that out there. I think it might be able to be transmitted on to TV with 30 seconds, which really would be an economical way to get a great deal of reach and frequency.

Waldorf: It’s faster; it’s easier; it’s better–much less time-consuming than typing lessons. After looking at the video on your website, I believe this product may be very successful a la The Rosetta Stone DR product (which is a faster, easier way to learn languages). That’s a perfect model that sells on TV and in catalogs–it’s even in airports. I think Speed Typing with Almena would be great in airport gift shops to practice on airplanes and in retail outlets like FedEx/Kinkos, Borders, Amazon, Staples and Office Depot.

At $39.95, I think it has tremendous potential for success and for reaching an expanding market. She has a long history of success with it already and now is the right time for expansion.

Hyman: When Almena told me that the whole program could take just 60 minutes to learn all 46 keys of the keyboard, I was impressed. In fact, in 15 seconds she teaches you how to access 12 keys subliminally and then there’s only 14 keys left. The bottom line is that QVC offers a vendor a highly demonstrable way, together with the host, to show in a six- to eight-minute segment how quickly you can learn this. Once you make your numbers, you’re invited back. I would recommend setting up a demo for this product.

Product Video #2: Diagnose My Pain – Retail $49.95 This program was developed by a former president of The American Academy of Pain Management. If you wish to find out what is really causing your pain visit: www.DianoseMyPain.com. For only $49.95, you will take an online medical questionnaire. It has 72 questions with 2008 possible answers and is computer scored. Your results will be e-mailed to you in just five minutes. The test will deliver results that correspond to diagnoses from the Johns Hopkins Hospital staff 95 percent of the time. You then take the results to your doctor to discuss them.

Sullivan: This program has 72 questions, right? I would think that would potentially save you money at the doctor’s office–and your life, possibly. It’s also developed by the former president of The American Academy of Pain Management, which should reassure people worried about credibility.

I would first consider online marketing, driving people to the e-commerce site via affiliate marketing, e-mail–maybe even radio station and TV station websites. After the Internet program gained traction, then I would start to consider radio then short-form TV.

Waldorf: With doctors under such time pressure, they just don’t spend that much time with you today. I think it’s great to come to your doctor with a diagnosis already done with such a high degree of accuracy. I would suggest an outreach to other doctors so they don’t feel threatened by his product. I also think it’s a great Internet product. But this marketer should make a concerted effort to communicate with the medical establishment to enlist their support for a pre-diagnostic tool like his.

Hymen: I’m going to shoot some holes in this one and then talk about how to patch it up with a better marketing plan. I thought the medical explanations were too complicated–simplifying them with some visuals would go a long way to helping market this project. (Personally, I would love to take the diagnoses from this to my personal physician as a strong second opinion.) I also am concerned about liability issues for a shopping channel, but I think it addresses a need and could be a catalog item and an especially strong Internet item.

Product Video #3: The Kool Locker – The Secure Personal Container Finally, a lockable lunch box that offers you peace of mind. Now you can keep your personal property safe from others–great for construction workers or by the pool. The Kool Locker offers hundreds of uses for many who need to tamper-proof their belongings. The Kool Locker is not yet manufactured and seeks initial bridge financing, manufacturing or a marketing partner to license the Kool Locker and launch it into the hands of consumers.

Sullivan: It’s certainly a good concept; there are plenty of places you may be concerned that someone might steal or tamper with your food or drinks. The Kool Locker strikes me as a very visual product–people need to see it in use and understand the safety features it offers. I would recommend television for this product; I think it could be a winner.

Waldorf: I wonder if the name Kool Locker might throw people off track as to what this product might be used for. I mean, it really is a portable, secure personal locker. Obviously, you would need to go off shore to find a partner to provide the tooling because of the cost required to manufacture it. I don’t see it as a DRTV product, but I do think there is a niche market for it–construction workers come to mind.

Hyman: The InventHelp company has a special program for clients of mine to help them develop products and then take them on to QVC. This is an interesting product because it keeps your lunch cool, your valuables safe and anchors them down so no one can walk away with them. I think it’s innovative enough that–once the manufacturing issues were solved–we would endeavor to get Kool Locker accepted at QVC.

February 2010 – Column: Rick Petry

Make Social Networking Work for You

Last July, comedian Dave Chappelle showed up unexpectedly in Portland, Ore., telling a local retailer he planned on giving a free, impromptu stand-up concert in the city’s Pioneer Courthouse Square at midnight. Starting at 5 p.m., through Twitter, then Facebook and texting, news spread. By the witching hour, 4,000 fans had turned out.

The following month, Best Buy mistakenly listed a Samsung 52-inch flat screen television set valued at $1,700 on its website for $9.99. News swept wildfire-like via the same social networking mechanisms, as thousands ordered as many as 10 sets only to find out that an obvious pricing mistake would not be honored save for five lucky souls.

These stories contain valuable lessons. In both cases, the lure of something clearly ephemeral became irresistible and caused a groundswell of organic promotion. No wonder. People have always loved to share information–especially when it’s fresh or exclusive–and spreading that news in the digital age is as easy as two thumbs up. The notion of scarcity has always fueled direct marketing. Now, marketers can create an army of word-of-mouth grassroots promoters to help them succeed.

Consumers are smart. They’re going to do their homework. While the idea of a limited-time opportunity sounds smart, its overuse and abuse in infomercials–where the promise of exclusivity is evergreen–has created cynicism and indifference among the public. One of the major advantages of home shopping is that its rolling offers are promoted in real time, creating a genuine sense of urgency that, when combined with a network’s reputation, can produce a formidable one-two punch. Similarly, news of special deals spread via the virtual backyard fence that are indeed limited, have the benefit of drafting off the goodwill of the communicator. They create a sense of now that is compelling.

For the cynical who think this is just about selling blenders and jewelry, rest assured it is not. After the devastating earthquake in Haiti, news spread that by simply texting 90999 via cell phone, an individual could make a $10 donation to the American Red Cross to help with the relief effort. In a matter of days, $11 million had been raised through this tactic. As the world observed during the uprising that followed the recent elections in Iran, these social networking tools operate without boundaries. It’s why marketers better deliver on their promises–because just as these tools can be used for one’s benefit, they can also destroy a brand’s reputation.

So what’s a marketer to do? First, pay vigilant attention to what’s being said on these channels. Discourse on the Internet is as vast and ever-changing as an ocean current. It can’t be merely spot-checked. Second, you need to use these new tools to communicate timely, newsworthy information that will motivate consumers. In a recession where everyone is looking for a deal, the opportunities presented by social networking are unlimited. It’s a chance to take what some may have viewed as mere monkey business and turn it into sound business–the sound of a cash register ringing.

Rick Petry is a freelance writer who specializes in direct marketing and is a past chairman of ERA. He can be reached at (503) 740-9065 or online at rickpetry.com or http://twitter. com/thepetrydish.

February 2010 – Feature: Your Online Ad Network Cheat Sheet

A User-Friendly Guide for Understanding–and Fully Optimizing–Online Display Ad Networks

By Mark Simon

Need to get up to speed on the plethora of online display ad networks out there? You’re not alone. The world of online display advertising–and the networks that the ads run through–is changing so quickly that it’s hard to keep track. That’s why I’ve created this “cheat sheet,” which describes how ad networks help you target customers in different ways, the various pricing models they work through and a few things to watch out for.

TARGETING
To find your best customers, meet them where they are and deliver an appropriate message to them. Different kinds of ad networks help you achieve this goal in different ways:

Vertical Networks - Fashionistas read fashion magazines and sports fans read sports publications. People consume content that relates to their interests. That’s why, in many cases, all you need to do to find the right audience is to find the content consumed by your core audience.

Enter vertical ad networks, which run advertising on sites catering to specific verticals–such as the Travel Ad Network and the fashion-focused Glam Media. An April 2009 comScore study found that vertical networks have phenomenal reach across the Internet and offer extremely high engagement levels. Of course, this shouldn’t come as a surprise: Vertical networks focus on running ads on sites geared around the things that their visitors are passionate about.

Contextual Networks - If you want to target customers reading a publication outside of your vertical, you’ll need to expand your reach.

Contextual ad networks analyze the content on partner site pages and match ads to this content. Typically, the content matching is keyword-based, which means that advertisers select keyword lists they’d like their ads to run against (similar to choosing keywords for SEM). When the network sees a page with a selected keyword, the ad runs. Not surprisingly, some of the largest contextual networks–like Google AdSense and the Yahoo Publisher Network–have ties to search engines.

Contextual networks offer a wonderful way to get your ad in front of an audience that’s already engaged with content relating to the things that you sell, and on some of the best-trafficked sites on the web. One thing to watch out for, however, is “dumb” networks that parse words without understanding their meaning. This can result in embarrassing situations for your brand–from an irrelevant ad to bona fide idiocy (like the contextual system that ran an ad for rabbit stew recipes against a heartwarming story about a young girl’s search for a home for baby rabbits).

Some networks and third-party providers have begun to engineer semantic solutions, which not only scan the words on the page, but better understand the meaning on the page as well.

Behavioral Networks – Contextual advertising helps advertisers find targeted consumers in non-targeted publications. But it doesn’t let advertisers find targeted consumers on non-targeted sections of those publications.

Enter behavioral networks. Rather than tying ads to the content on a publisher’s pages, behavioral networks are able to identify who the user is, what kinds of prior activities he or she has engaged in on the web and what kinds of ads might be relevant to this person–regardless of the website on which the ad appears. For example, let’s say that a user reads six hockey-oriented pages or has indicated through other online activities a passionate interest in the sport. This user will be exposed to ads for hockey-oriented products and services, even when he or she is reading web pages with content related to business-, travel- or automotive-focused topics. Any additional demographic data the network has–such as information provided from an e-mail signup–can be used to add further detail to the picture.

Often, networks will target users by labeling them based on “buckets” comprised of a combination of demographics and site-viewing activity. For example, the 40-year-old mother who frequents cooking sites may be categorized as a “soccer mom,” the web user who reads auto pages may be categorized as an “auto enthusiast,” etc. Some of these networks observe users’ web habits in very fine detail. Yahoo’s Smart Ads system, for example, matches users’ search records with their activity across the vast array of Yahoo content sites, creating a very rich user profile.

Behavioral targeting does raise privacy concerns–an inevitable by-product of creating a system that’s designed to monitor web users’ activity. To mitigate privacy issues, be sure that the network you’re working with properly anonymizes user data, and allows users to easily opt out of targeting.

PRICING MODELS
Ad networks utilize various pricing models, with associated benefits and drawbacks. Following is a rundown of the major pricing models:

CPM – CPM stands for “cost per 1,000 impressions” (”M” being the Roman symbol for 1,000). CPM is shorthand for a flat-fee pricing model based on the number of times your ad runs. On a poorly trafficked site, the CPM may be only a few pennies per ad; on a very highly trafficked page–like the Yahoo homepage–CPM rates rival prices for prime-time TV.

CPM is a term that originated in print media, but highly granular web metrics makes things more complicated online. Historically, CPMs have been set based on the number of a site’s pageviews–the more times a page is looked at, the more the network can charge (all things being equal). But there’s a new movement–driven by advertisers–to shift pricing based on pageviews to pricing based on unique visitors (new visitors who arrive at a site). To me, this pressure from advertisers is legitimate, because if you want to maximize the number of people who see your ad, then you’ll want to pay differently for a visitor who’s never been to the place where your ad lives than you would for someone who’s already been to that site multiple times.

Pay Per Click/Pay Per Performance - While traditional brand advertisers might be satisfied running ads that people simply look at, many Internet advertisers are looking to drive some kind of further engagement with their businesses. For this reason, some networks offer cost-per-click pricing, a pricing system familiar to those engaged in search advertising. In this model, advertisers only pay when a user clicks on the ad. Some networks go a step further–offering pay per action advertising: The advertiser sets a desired action on the destination website, and pays only when the user takes that desired action via the ad.

Exchanges - This allows advertisers to buy ad inventory via auction, in a manner that’s very similar to the search advertising model. The two best-known exchanges are Google’s DoubleClick Exchange and Yahoo’s Right Media.

Ad exchanges were initially created as ways to sell remnant ad space that publishers couldn’t sell otherwise. By putting this ad content up for auction, publishers and networks were able to connect with the advertisers for whom that space would be valuable (and maybe even create competition to drive up the price on those ads). Recently, the Right Media platform was re-branded as a “premium” network–meaning that it’s now a destination for buying prime ad inventory.

BUYER BEWARE
I’ll close with a bit of warning:

Most of the reputable ad networks have earned their reputability. This being said, there are two cautionary issues to think about when you’re considering entering into a relationship with a network: the ability of the network to accurately provide what it’s promised and the willingness of the network to give you control over your data.

Accuracy - When I refer to “accuracy,” I mean that you need to be sure that you’re getting what you’ve actually paid for. Sometimes, ad networks can inflate their numbers, or claim that they’re offering far more precise targeting than they really are, or otherwise charge you as if they’re delivering more than they actually are. For example, while a given ad network might be able to run highly targeted ad inventory, the space where this advertising actually appears may be a spot on the page that’s so low that it will rarely be seen. Obviously, you shouldn’t pay premium rates for such ads.

Unfortunately, some of these errors are the result of simple dishonesty. Often–and more benignly–they’re the unfortunate by-product of a poorly managed network. Either way, you’ll want to stay vigilant to be sure that you’re getting your money’s worth. Before you get involved with an ad network, make sure you’ve done your homework on which networks are reliable and which aren’t as good to deal with.

Data Ownership - Ask yourself this question: If you left your ad network today, how easy would it be to take your data–your traffic statistics, your ad pricing and the places your advertising runs–to a different network? For that matter, how easy would it be for you to use the data developed in one network to duplicate your campaigns in a different one? Some ad networks work hard to make it difficult for you to transfer your data over to a competing network–making it a challenge for you to repeat success, or to start anew if the relationship with that ad network doesn’t work out. So when you enter into a relationship with an ad network, be careful as to who really owns the data you might someday want to export–find out if the owner of the data is you, or the network you’re advertising on.

Mark Simon is vice president, industry relations at Didit, a firm specializing in search marketing and targeted display ads. He can be reached at mark.simon@didit.com.

February 2010 – Cover Story: Have You Called Jenny Craig Lately?

The Weight Management Service Company Earns Electronic

Retailer’s Direct to Consumer Marketer of the Year Honors.

By Vitisia Paynich

Not since her role as the quintessential “girl next door” on the hit ’70s TV sitcom “One Day at a Time” has actress Valerie Bertinelli attracted so much media attention. Thanks to the Jenny Craig weight-loss program, the actress dropped 40 pounds and unveiled her bikini-fit body in a national commercial. The spot triggered a public relations windfall leading to talk show appearances, magazine covers and book deals for Bertinelli–and major brand exposure for Jenny Craig.

However, PR and general advertising are simply not enough for this iconic brand. To maintain its competitive edge in the $40 billion weight-loss market, Jenny Craig, which is owned by Nestle, embraces a multichannel strategy that encompasses DRTV, print and online, as well as social media.

The weight management service company combines its arsenal of top-celebrity spokespeople with infomercials, blogs and direct mail to engage clients in their preferred medium and promote shared dialogue. What’s more, the company features webisodes on its site highlighting both celebrity and client success stories.

This outside-the-box thinking has garnered Jenny Craig Electronic Retailer’s 2009 Direct to Consumer Marketer of the Year Award.

Electronic Retailer spoke one-on- one with Steve Bellach, senior director of North America marketing, to discuss the marketing strategies that have helped make Jenny Craig a leading weight-loss brand, along with future plans for expanding its global operations.

Electronic Retailer: What do you believe has made Jenny Craig such a strong competitor in the weight-loss category for three decades?

Steve Bellach: It really starts with the brand, the program and the fact that it’s a clinically proven weight management solution. It’s important that we have a science-based, personalized approach to weight management. And what really differentiates us from others are our one-on-one consultations.

The Jenny Craig website features a host of e-tools, links to celebrity blogs, as well as access to a library of webisodes.

ER: Jenny Craig embraces a multichannel marketing strategy that comprises traditional and new media. Why was it important for the company to concentrate on multiple channels as opposed to just one–such as television?

Bellach: As you know, the media environment has become so fragmented and consumers seek information through many media channels. We want to be in front of them in all those channels. At the end of the day, if the consumer decides they are ready to make a lifestyle change–and whether they’re watching TV, reading a magazine, on Facebook or whatever it might be–we want to make sure we’re in front of them talking about how effective our program is.

ER: How do you make certain that your branding remains consistent across all marketing channels?

Bellach: One strategy we use and have used over the years is our celebrity tactic. The celebrity helps put a face on the brand across channels. So, for example, if you see Valerie Bertinelli–or one of our current celebrities such as Sara Rue or Jason Alexander–on TV, on the website or in print, that brings some consistency to the brand. We are very strict in terms of our brand standards and how our brand is presented. A lot of my background is in classical brand marketing, so I like to make sure that every touchpoint a consumer uses to interact with us gives them a similar brand experience and communication.

ER: Which celebrity campaigns have been the most successful for the company?

Bellach: We’ve used a number of celebrities over the years. They’ve all been very successful in losing weight in their own way. With Valerie, we’re now in our third year with her and she’s really been very powerful for us. Queen Latifah was effective. We’re now just launching Sara Rue. Nicole Sullivan has been on the program for several months and she’s been very effective in generating publicity for us. One of the powers of working with a celebrity is the publicity topspin. So in addition to TV, print and online, we can generate magazine covers and significant television talk show appearances.

We think what makes our celebrity program most effective is we’re the only company out there that launches them before they’ve lost the weight. Think about any other competitor who uses even regular clients. They only show them after they’ve lost the weight. We stick our necks out there and say, “Hey, Sara’s joined Jenny Craig and she wants to lose 30 pounds.” And, she hasn’t lost the weight yet, but we’re so confident in the efficacy of the program that we then show their journey almost in real time–on TV, on the website both through written and video blogs, on Facebook. We give clients and consumers as many ways to connect with our celebrities as possible.

ER: You mentioned that actor Jason Alexander recently partnered with Jenny Craig. In recent years, you’ve mainly featured female celebs. Is this a way of focusing more on the male demographic?

Bellach: Yes, we just announced him in January and we’re very excited. Naturally, we hope it will reach a new demographic. It’s important to note, however, that we have used male [spokespeople] in the past, about 10 years ago. But you’re right, recent celebrities have been women. Right now, roughly about 10 percent of our client base are men and obviously, the obesity epidemic has affected everybody. We feel our program and the flexibility of it works for everybody–whether you’re older, younger, male or female. We just launched a microsite called Jenny Craig Type 2. The program is very effective for people with Type 2 diabetes. Again, it’s not necessarily a new program for communicating to men, but it’s more like saying, “Hey, Jenny Craig works for you, too.” We’re using Jason in the ad and Valerie will be featured, as well.

ER: When did Jenny Craig begin marketing through DRTV?

Bellach: Actually for many years, we have been in spot DR. It’s probably within the past five years or so that we have been national–primarily cable. And we feel that the comprehensive, hybrid approach gives us a nice balance between the efficiency of DR and the brand building with some of the other channels out there.

ER: Can you tell us about some of the company’s other marketing efforts?

Bellach: Well of course, TV advertising is critical. We also do a lot of print and a lot of magazine advertising. We make a significant investment in public relations. I’ve never been with an organization that gets the People magazine covers and talk show appearances. We also do a lot of direct marketing through direct mail with post cards, e-mail marketing, and also in the social media arena. In the past two years, we’ve ">been active on Facebook and Twitter.

ER: It’s clear that the web is also a big part of your overall marketing. What online tools and features do you utilize to assist existing clients as well as engage new ones?

Bellach: We offer a suite of free e-tools. You don’t even need to be a client, just a registered user. You have access to recipes and health help tools. Also on our website, there’s a menu planner to make it more efficient for existing clients. They don’t need to come into the center to go through all the details of planning their weekly menu; they can get a lot of the work done ahead of time.

In terms of reaching new clients, in the past year or so, we’ve launched a strategy against microsites. So, we have, for example, a microsite called JennyCraigAtHome.com. And on January 4, 2010, we launched three new microsites: JennyCraigForMen.com, JennyCraigType2.com and JennyCraigSilver.com. It’s really in the spirit of trying to reach new segments. We have some banner advertising out there as well against these microsites. There’s much richer content that would be relevant to these segments.

ER: When did you first venture into webisodes and how do your campaigns complement your DRTV efforts?

Bellach: Webisodes have been part of our mix for a little over a year. In late 2008, we launched our first webisodes. Consumers generally don’t know a lot about our program. And once they understand it and how comprehensive it is, they’re more compelled to join. It’s really hard to communicate a lot about the program in a 30-second ad. The webisodes have provided a great complement to our DRTV efforts to give a lot more information about the food, which is more about portion control and about the body or activity component, which is really not about joining a gym. It’s about getting off the couch and walking. There’s also the mind component. What are the motivators and how do we really help you with the lifestyle change that you’re looking for?

We’ve been working with Waldorf Crawford and they’ve been a great partner for shooting the infomercials, which kind of dovetailed into the production and creative development of the webisodes.

ER: You spoke earlier about Facebook and Twitter. How does social media play a role in your marketing and branding?

Bellach: With celebrities, we’re communicating a journey. It’s almost a reality show of their weight-loss progress. It’s for people who want to come to our website and read the written blogs or view the video blogs, which are monthly. Or maybe they want to go to Facebook and see how Sara’s doing at a certain stage of her weight-loss progress. So, it’s just another avenue to reach consumers and update them on the celebrity progress. It’s also about non-celebrity clients’ progress. If you went to the Jenny Craig fan page, for example, on Facebook there’s a lot of dialogue. One of the things we know is that if people have a support system and try to lose weight with somebody or at least know other people trying to lose weight, they’ll be more successful. And, it’s just really gratifying to read strings of comments and see how people are cheering each other on and providing support.

ER: Is the company currently doing mobile marketing?

Bellach: We’re evaluating that. Again, given that we’re so direct response-oriented, if we can find a way for it to generate efficient phone calls and efficient sales, we will pursue it. We just want to make sure that before we make a significant investment we really understand how it is going to work for our business.

ER: What does the future hold for Jenny Craig and the brand?

Bellach: We’re part of the Nestle organization, which is the largest food company in the world. They’re shifting their focus to be much more focused on health and wellness. Thus, there are significant resources around program innovation, around investment in the business, and we are looking at some global expansion opportunities. So, we really fit in the sweet spot of that.

January 2010 – Channel Crossing: Affiliate Marketing

Designing a Successful Affiliate Marketing Program

Forrester Research recently forecast U.S. affiliate marketing spending will reach $4 billion in 2014. Is your company taking advantage of this opportunity?

Although many direct response marketers, including Fortune 500 companies, have embraced online affiliate marketing, there are still some DR marketers hesitant to step outside their areas of expertise.

SIMPLE TIPS
Do not let fear of the unknown hold you back; following a few basic rules of traditional marketing can significantly minimize risk and enhance ROI.

Choose your partners wisely. There are branding implications to consider when working with an online agency or affiliate network. Potential partners should be put through the same rigorous interview process used to hire new employees.

• What level of experience and breadth of services do potential partners have?
• Does the agency share the marketer’s values?
• What type of vetting process is used for affiliates in the network?
• Do they provide ongoing campaign monitoring and brand protection services?
• Do they have an independent best practices or compliance departments?
• Do they stay up to date with industry standards and regulatory issues?
• Can the company provide references?

Select online advertising channels based on your target market. Hiring partners with expertise in market segmentation is essential. Reaching female baby boomers requires a different online advertising mix than reaching male Gen-Xers. Equally important is avoiding channels that could negatively impact the brand.

There are a variety of affiliate marketing channels that might work for DR marketers, including loyalty, social media, virtual currency, e-mail, search and display. The key is to test and find the most effective mix to meet lead generation or ROI goals.

Make sure you know where and how your ad campaigns are running. The word “transparency” is used a lot these days, but with various meanings. True transparency answers the questions “who, what, when, where and how.” If an affiliate network or agency will not disclose specifics about the distribution of a campaign, the marketer is at risk of receiving fraudulent leads or damaging its brand. The source of many problems can often be a single affiliate who merely jumps from network to network after being identified. Without true transparency, DR marketers forfeit visibility and lose control.

Not all leads are of equal value. Lead value may vary by channel, so why pay the same amount for lower quality leads? Working with a transparent network allows a marketer to see which channels are most valuable and set payments accordingly. It is often useful to work with a partner who has experience managing multiple networks. They can help analyze media buying options and make pricing recommendations to simplify the process.

Affiliate marketing is being used by many DR marketers to reach potential customers online. With initial due diligence, affiliate marketing can be a highly profitable component of your advertising mix.

Janice Roetenberg is director of corporate marketing for Adperio, a leading performance-based online marketing and advertising agency. She can be reached at jroetenberg@adperio.com.