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: 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.

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 – Channel Crossing: Mobile

Per Inquiry Goes Mobile

Many advertisers have come to recognize that per inquiry television advertising is a great strategy for generating leads or calls on a cost-controlled basis. This form of guaranteed advertising has been around for more than 25 years, and it has matured into a “must have” for many DRTV advertisers.

It follows that mobile should be a great way to generate qualified responses, with 275 million subscribers (and growing)! More and more DRTV advertisers say they’re considering dipping their toes in the mobile per inquiry waters. But are they ready?

The attraction to mobile PI is obvious:

• Low cost of entry – a banner ad or text message and landing page can get it started;
• Multiple ways to capture responses;
• Ability to geo-target consumers;
• Flexibility for controlling response volume; and
• Cost-controlled results – pay only for qualified responses.

SO WHAT’S NOT TO LOVE?
Think back to the early days of the Internet, when exaggerated promises were made regarding the ability of sites and networks to generate qualified responses (actually, this still occurs today). Many responses were not qualified, and there were costs attached to finding that out.

Mobile PI advertising is viable and clients are reaping attractive ROI from the responses being generated. Many, however, agree that finding the right approach for generating consistent, qualified lead flow can be challenging.

A client is ready if they are prepared to:

Test and re-test – Each test will help to refine the best approach for generating qualified responses. This will often differ among mobile partners, since their methods for engaging consumers differ (downloaded apps, display ads, audio placements and more).

Monitor results constantly - Mobile vendors are pretty nimble when it comes to making changes in order to get a campaign on the right track. Optimize based on results and be prepared to implement more stringent qualifiers to enhance lead quality.

Change the way the lead is captured – Having consumers call a toll-free number may be the best way to generate qualified leads on TV, but that’s not necessarily true with mobile. The simplicity of mobile’s “click to call” makes it almost too easy for consumers to connect by phone, only to discover they hadn’t intended to make the call at all.

Set realistic expectations – Mobile is a new medium for both advertisers and consumers. Consumers are experimenting with it. While response levels don’t yet rival those from the Internet, the quality of the mobile responses is proving to be much higher.

Partner with an experienced mobile team – Avoid trial and error by working with a team that has vetted many of the mobile partners by running numerous campaigns with them. Over the past year, a solid number of mobile vendors have embraced the PI concept and proven that per inquiry campaigns can–and do–work!

Sally Dickson is president of MMSI in Warwick, R.I. She can be reached at (401) 737-7730.

January 2010 – Channel Crossing: Radio

Balancing Your DR Broadcast Portfolio for 2010

Before you assume this is just another “DR radio should be part of your marketing mix” column–and move onto your next DRTV article–consider this: A portion of your short-form DRTV media investment may be at risk as early as next month. Now more than ever, radio may be your only cost-effective broadcast hedge against the imminent short-form DRTV inventory squeeze.

Highly responsive short-form DRTV inventory is like the blue whale, the giant panda or the snow leopard; they are all on the endangered species list for 2010. In the first half of 2009, an increase in TV inventory delivered the best media economy in the history of direct marketing, and in turn, the best industry-wide results for direct marketers. We all enjoyed it while it lasted.

As the economy stabilizes, general advertisers are returning to the TV market in 2010, and traditional DRTV inventory is being scooped up by major brand advertisers and retailers of all sizes that are seeking greater impressions and higher ratings. February is going to be a “do or die” month for the auto industry. Auto dealers with strong Washington’s Birthday sales will position themselves for a successful year, while those that do not perform may fall victim to the next round of dealer closings.

2010’s TV inventory squeeze will continue into the summer, as traditional DRTV clearances in July and August will become scarce once the July-November political advertising takes center stage. According to Marci Rywicker, senior analyst at Wells Fargo Securities, $2.2 billion will be spent on midterm elections and issue advertising. Short-form DRTV will be substantially displaced.

It’s not just the upcoming political season that will render clearance more challenging–the face of the typical DRTV audience has changed as well. More and more, these audiences are being populated by the unemployed and underemployed, and between economic strains and personal credit woes, these viewers have no choice but to keep their wallets closed. Across the board, DRTV ROI will be negatively impacted until unemployment rebounds.

THE OPPORTUNITY IS SCANNING THE DIAL
Big brand advertising agencies are focusing their offline media spend on television, where the best production and media margins lie. As a result, radio ad spending is down in national network and local radio spot markets. At the same time, local radio stations are fighting to keep their head above water. Not only have they had to contend with a shrinking auto category–at one time, the source of 15 percent of the radio industry’s revenue–but they are also crippled with debt from the radio companies’ consolidation craze of the late 1990s. As a result, many stations find themselves struggling to meet loan payments and some are facing bankruptcy. Whereas television stations can depend on political advertising to boost revenues, radio has no reason to expect a similar bailout. Rywicker estimates radio will garner only 8 percent of political spending this year–a paltry sum in comparison to the 67 percent she expects to go to television.

With its foundation being shaky at best, there is growing pressure on radio sales to greatly discount their rates. They are now scrambling to make the deals that they would have balked at in the past. This is the perfect storm of opportunity to advertise on radio.

A large volume of remnant radio inventory is readily available to be bought from networks and local spot market stations, which drives down CPMs across the board, but low CPMs are not the only economic advantage of DR radio. Due to the mobile nature of radio and how it is consumed, it reaches a greater number of better prospects–namely, consumers who are gainfully employed and are willing to part with their valuable dollars on advertised products. Compare that to the increasing population of unemployed daytime television viewers who may have the will but not the wallet.

Despite an ever-increasing selection of media options, consumers still tune into radio for news, entertainment and information. Research conducted by the Radio Advertising Bureau found that the medium reaches 92 percent of U.S. consumers, or more than 235 million listeners each week. Furthermore, since a direct response radio campaign can be produced, tested, rolled out and optimized in a lot less lead time than DRTV, marketers are better able to identify and customize the most effective messaging to influence their target audience.

Given the DRTV inventory struggles, these are some mindful considerations for the DR radio test you should now be planning. Not all products are suited for DR radio, but if your product has been successfully marketed on DRTV, that will increase your chances of success. The reason is image transference. When consumers hear your DR radio spot, after having seen your DRTV spot, they recall campaign images. As a result, consumers are visually able to connect with your radio spot and more predisposed to respond.

It will be a whole new year for short-form DRTV clearance. Don’t wait until your preemption rate hits 65 percent or worse; shift some of your DRTV dollars now into DR radio to balance your broadcast media portfolio and preserve your ROI.

Andrew G. Gordon is president and founder of Direct Impact Group, a full-service DRTV, DR radio, print and mail marketing firm that specializes in direct response lead generation. He can be reached at (781) 453-2200, or via e-mail at andrewg@directimpactgroup.com.

January 2010 – Channel Crossing: DRTV

Performance-Based Advertising: Knowing What Sells and What Doesn’t

According to Merriam-Webster, accountability is an obligation or willingness to accept responsibility or to account for one’s actions. However, as evidenced by the actions of Wall Street, mortgage brokers, banks, insurance companies and auto manufacturers, accountability is not in vogue today–unless you are in advertising. Today’s marketers want accountability from their agencies, demanding to see a return on investment (ROI) for their marketing dollars.

John Wanamaker, considered by many to be the father of modern advertising, once said, “Half the money I spend on advertising is wasted, the trouble is I don’t know which half.” In the 75 years since Wanamaker uttered this statement little has changed. According to the TVB and NCTA, respectively, advertisers spent over $73 billion on television advertising in 2008. But which part of that $73 billion drove sales and which part followed you and me out the door when we went to the kitchen to get a snack during a commercial break? Well, if you had been utilizing performance-based advertising, you might actually be able to answer that question.

PROVEN RESULTS
Direct marketers, unlike their more traditional brethren, have long known how to optimize their media spend to drive sales. Metrics like sales-per-spot, cost-per-lead and cost-per-sale are used every day to measure the efficiency of media buys and adjust them accordingly based upon their ability to drive sales. But despite their stated desire for accountability, marketers continue to underutilize performance-based advertising. According to TNS, only 6.2 percent of advertising dollars spent on TV in 2008 went to performance-based advertising.

In the end, this is a bottom-line driven world. If your advertising is not driving sales what are you paying for? Now that is not to say that branding does not have a role to play in the marketing mix but, in an era of accountability, marketers must demand that their agencies enhance their bottom lines. A colleague of mine, Ken Dec, points to the U.S. auto industry as a timely example. Ford, Chrysler and GM would be better-off trading-in some of their branding campaigns for more efficient pay-for-performance models. Our auto industry needs sales to boost its bottom line. Pay-for-performance television is a proven sales driver that has worked for major brands–including Proctor & Gamble and PepsiCo–and in an age of government bailouts and global recession, the automotive industry should be paying its agencies to sell cars, not place media.

While performance-based advertising is not the answer to all of what ails Madison Avenue, it is a proven method for promoting brands while delivering increased leads and sales. The trick is focusing on primary and secondary dayparts that are more brand-friendly, while also integrating both long-form programming and short-form spots that have less messaging and a simpler call-to-action.

In an age when marketers are demanding greater accountability, performance-based advertising can and will deliver ROI in a way that traditional brand advertising never will.

Michael Goodman is senior director of analytics at Mercury Media. He can be reached via e-mail at mgoodman@mercurymedia.com.

January 2010 – Column: Your Association, Your Bottom Line

Issues Arise as Guides Take Effect

It’s been just over one month since the FTC’s revised Guides Concerning Endorsements and Testimonials in Advertising have taken effect. In order to ease the transition to the new standards, ERA recently hosted two Spotlight Sessions on the revised Guides, assembling panels comprised of FTC representatives, leading legal experts and marketers to address the real-world issues that have emerged.

Both sessions made it abundantly clear that there’s a lack of clarity for many marketers regarding the Guides, causing an immediate and significant impact on the businesses of many ERA member companies and others in direct-to-consumer commerce.

To help settle the confusion and provide actionable advice for ERA Members implementing the changes set forth in the revised Guides, here are a few of the key takeaways:

Network clearance issues are already arising. Shows are already being blocked for failing to satisfy the Guides. According to Product Partners, LLC’s Jonathan Gelfand, the problems lie not with the Guides themselves, but with networks’ misinterpretation or excessively conservative reading of the Guides. Gelfand called for further clarification from the FTC to provide additional guidance to the stations and networks. I urge you to bring these issues to ERA’s attention as they occur; we will compile these accounts and present them to the FTC to urge the Commission to provide clarification regarding the exact language of the Guides that is proving to be problematic in execution.

Regarding social media marketing, have a plan. Social media marketing will only grow and increase in effectiveness as more marketers harness the power of their consumer base, influential bloggers and others to spread their message. But as the FTC’s assistant director Rich Cleland stresses, you must have a reasonable social media policy and monitoring program in place. The FTC acknowledges that complete control over your social media agents is impossible; you simply need to have policies in place and take reasonable steps to monitor your agents and enforce the policies.

With celebrity endorsers, know when to disclose. In the context of an ad, it’s assumed that celebrity endorsers are being compensated, so no disclosure is required. Outside of this context, however, disclosure of the connection between the celebrity and the marketer is likely to be required should a discussion turn to the celebrity’s use of your product.

The FTC has clear priorities in social media. High on the FTC’s enforcement list? Fake blogs or “flogs,” phony product review sites and “astroturfing”—enlisting agents or company employees to post positive reviews about your products or negative ones regarding your competitors’ without disclosing their connection to your company. Inadvertent mistakes where a social media agent has “gone off the reservation” in speaking about your product without your knowledge and despite your social media policy? Not a priority.

Clarification is on the way. Look for the FTC to publish FAQs regarding the revised Guides soon. In addition, ERA, as your association of record, will continue to provide guidance to our members. Specifically, I urge you to attend The Great Ideas Summit (held Feb. 1-3 at the Hilton New Orleans Riverside) where keynote speakers (including David Vladeck, director of the FTC’s Bureau of Consumer Protection) and educational sessions will address the topic in detail. For more information, please visit www.eragreatideas.org.

I look forward to your thoughts and concerns on this issue. Please contact me at any time at jcoons@retailing.org. I look forward to seeing you in New Orleans!

December 2009 – Channel Crossing: DRTV

Expect the First Quarter to be Tight

By Dick Wechsler

First quarter begins on December 26, the day after Christmas. Given the uncertainty that has overtaken the media market for the better part of 2009, what should DRTV advertisers expect? Will opportunistic inventory be available deep into February? Or, will the flood of general advertising dollars that began flowing into the market last spring continue unabated, washing out all hopes of a typically strong start to the year?

There are significant trends indicating that media opportunities, especially for two-minute commercials, will be scarce. General advertising rates appear likely to stay at the historically high levels they hit this fall and inventory will remain extremely tight.

Here’s why. Late last spring, the upfront advertising market never really developed. Buyers–the advertisers–felt that the economy would continue to suffer, that the media market would remain weak and that they would be able to negotiate lower rates than they had in the previous year. Sellers–the networks and syndicators–bet that the economy would improve, that demand for inventory would increase and that they would receive higher rates by selling in the scatter rather than the upfront market. This time, the sellers were right. At present, and likely through the first half of 2010, the media market is a perfect storm for the sellers–and this doesn’t bode well for short-form DRTV.

Brian Fays, executive vice president of direct response, paid programming and ad sales at MTV, reports that the general side simply isn’t releasing inventory for DR sales. “There are only around 12 commercial minutes an hour,” explains Fays. “At present, the general side is able to sell it at significant multiples compared to DR rates.”

Good News on the Horizon
Maria Kennedy, vice president, direct response/paid programming at Discovery Communications, notes that the calendar upfront has been very active. While this appears ominous to the DR market in the near term, I see this as a long-term positive. A strong upfront both establishes a price threshold and stabilizes the market. The more active the upfront market, the less general participation there will be in the scatter market. This allows DR advertisers to have a greater influence on the overall scatter market. Inventory availability becomes more predictable and prices are likely to fall.

Perhaps the pendulum has swung too far, and the momentum behind the current market is unsustainable. Should the bubble burst, as it did following the dot.com collapse, opportunities would be readily available.

My sense is that the calendar upfront will remain active, bringing with it some stability. By the Spring of 2010, general advertisers, weary of the high rates and frantic, uncertain pace of the current scatter market, will return to the certain pricing of the upfront. A strong upfront will lead to a more normal DRTV scatter market by July. Consumer confidence is also likely to improve by then, and along with it, the response rates necessary for a healthy DRTV industry.

Dick Wechsler is president and CEO of Lockard & Wechsler Direct, a full-service direct marketing agency in Irvington, N.Y. He is also a member of Electronic Retailer’s editorial advisory board. He can be reached at rwechsler@lwdirect.com.

December 2009 – Channel Crossing: Radio

The Importance of Executing a Smart Telemarketing Strategy

By Bill Sullivan

My previous article in the August issue suggested a more efficient, more profitable way for DR radio advertisers to do business. Essentially, I talked about the power of lead-generation offers. This article will review the key elements of converting a lead-generation “call to action” caller to a customer by your telemarketing service.

I am stressing a vital element that is being overlooked by more and more DR radio advertisers across the country: a smart telemarketing strategy.

KNOWING THE BASICS
My more than 20 years of experience has taught me that successful DR radio campaigns need three essentials. First, a creative spot that generates the maximum number of leads–not a direct sales pitch, but a lead-generation offer such as one for free information or samples. These are spots that promote listener call-ins, with callers qualified as prospects who ultimately become buyers.

Second, to ensure the highest return on investment, the campaign must be broadcast on radio stations using distressed inventory. This will guarantee the lowest possible spot prices in prime dayparts, reaching the most listeners for the money.

Third, a successful DR radio campaign depends on a smart telemarketing strategy. You can have the most effective radio spot and the least expensive media buy, but without the right follow-up telemarketing strategy, a campaign can fail. A spot is only 60 seconds long. An average call gives telemarketers several minutes to not only find out what callers really want, but also to begin the process of turning callers into long-term customers.

A smart telemarketing strategy can increase the return on investment in many ways, such as by generating a larger average sale or by increasing the number and size of sales in several ways:

First, by further explaining the product’s benefits and values, good telemarketers can answer callers’ questions and assist them in the purchase of a product.

Second, good telemarketers can promote the purchase of products that complement the featured product by explaining their benefits and values, increasing the average sale.

Third, in addition to converting callers into customers of the featured product, a smart telemarketing strategy can include offers of entirely different products that the caller might be interested in purchasing.

Over the years, I’ve come across numerous clients who’ve enjoyed many years of success using DR radio, thanks to highly skilled telemarketing teams.

Thus, ensuring a high return on investment from your DR radio campaign depends on reaching the maximum amount of prospects. Lead-generation creative followed by a smart telemarketing strategy is the answer. What’s more, you can have the greatest creative and the least expensive media buy, but without a smart telemarketing strategy, a campaign can still fail.

As always, be sure to work with experienced DR radio ad agencies–with professionals who can develop a marketing strategy that masters creative, media buying and telemarketing.

Bill Sullivan is president of William Sullivan Advertising, a full-service ad agency that specializes in DR radio. He can be reached at (973) 379-8555, or via e-mail at bill@williamsullivanadvertising.com.