June 2009 – Channel Crossing: Per Inquiry

Dispelling Myths About Per Inquiry

By Sally Dickson

Television ad dollars aren’t flowing as freely as they once were, as advertisers demand more from their return on ad spend. It’s no surprise that DRTV, with its intense focus on ROI, is attracting increased attention. And as advertisers peel back the DRTV onion, they may be hearing about the sometimes overlooked and underutilized ROI-focused strategy that is per inquiry advertising.

THE PER INQUIRY FACTS
PITV…per inquiry advertising…pay for performance…cost per lead…cost per order…cost per acquisition…cost per call…guaranteed media…lead generation–they’re are labels applied to the strategy known simply as PI. The concept is simple: The advertiser defines what constitutes a qualified response and agrees to pay a specific amount for each qualified response generated. Media is compensated based on performance.

So why aren’t all ROI-conscious advertisers jumping on the PI bandwagon?

In part, it may be due to some of the myths that still circulate among folks who “tried PI” back in the ’80s.

• PI commercials only run at 3 a.m.
• PI commercials only air on low power stations in markets 200-plus.
• PI commercials look schlocky.
• People who respond to PI commercials are not our customers.
• PI is the lowest form of advertising.

Recall hearing all of these objections about DRTV for decades before it became today’s $3 billion industry?

Here is some current information about PI:

• Many cable and broadcast media air half-hour infomercials in their overnights. Thus, there are far fewer avails during those hours for inserting :60 or :120 PI commercials. Instead, the PI spots tend to clear between 6 a.m. – 12 midnight.
• While not every media outlet accepts PI, most face less than 100-percent sellout on a regular basis regardless of what market they are in. Thus, PI is often considered a viable revenue stream–even in some of the Top 10 markets and on national networks.
• PI commercials look no different than DR commercials. They are the same commercials, attracting the same consumers with a strong call to action for a product or service that they need or want. The difference, unnoticed by the consumer, is that each commercial bears a unique toll-free number and/or unique URL so that the responses can be credited to the appropriate media source.
• PI isn’t the lowest form of advertising…but it may be one of the most misunderstood forms of advertising.

PI works best for proven offers. Test first! The volume of quality responses depends heavily on the effectiveness of the creative and the availability of TV inventory. Unique 800 numbers and URLs are essential for crediting the media who, like the advertiser, are looking for a reasonable ROI. PITV often works well in conjunction with other strategies, helping to increase a campaign’s overall efficiency.

Agencies that specialize in PI are quietly helping large and small advertisers increase sales and improve their ROI. It’s a good time for advertisers and DR companies to give PI another look.

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