TV inc
TELEVISION AND INTERNET DIRECT MARKETING

PART I. — Television
“The secret of making a lot of money?  Simple.  Buy low and sell high.
Then do it over again”.  Andrew Carnegie
Television Direct Response Marketing

For companies interested in selling direct to consumers, the Internet and television are the most powerful tools and have the greatest attraction.  It’s mediums that set marketers to dreaming of massive call volumes, massive numbers of orders, and massive profits.  Reaping the profits and minimizing the headaches on the Internet and in television direct response require careful attention to all of the following elements:

The product (or service or cause)
The message
The Media buying
Testing
Call handling
Source tracking
Fulfillment
Back-end marketing (resales)

The importance of each of these points is related to the medium you select: a) the 60 second, 90 second or 120 second commercial; b) program length commercials:  a 30 minute to 60 minute infomercial; c) selling to a shop-at-home television network, d) using the Internet to advertise your product or service.

— APPLICATIONS OF DIRECT RESPONSE TELEVISION  and THE INTERNET —

Applications of the direct response advertising have become increasingly diverse. Current users of the TV media mix are engaged in one or more of the following techniques.

Order Generation
The oldest type of commercial is still the most common.  In the 1950’s advertisers began soliciting orders for records and kitchen utensils on television.  Today orders are getting generated for magazine subscriptions, exercise equipment, power tools, video cassettes, and an array of other products.

Lead Generation
 TV is being used by both consumer and business-to-business marketers as a means of generating leads, which are then followed up by mail, outbound telephone, or sales visits.  Insurance, investments, office equipment, and high-ticket consumer products have been successfully marketed in this fashion.

Dealer Locator
This is also referred to as a Tag Commercial because the call to order is tagged on to the end.  A number of advertisers urge viewers to call for the name and location of their nearest dealer who carries the advertised product.  Dealer locator calls can also serve a lead generation calls if the caller’s names are captured for a later follow-up.

Pledge Solicitation
Non-profit organizations, such as “Save the Children Foundation” have made extensive use of television commercials to generate pledges.

Continuation of Advertising Message
A recent use of the phone call in response to a TV ad has been to continue the advertising message.  Carrier Corporation, for example, urges viewers who are suffering from the heat to call an 800 number.  Callers reach a tape-recorded message that gives detailed information about the effectiveness of the Carrier Heat Pump air conditioning system.

STEP #1

PRODUCT SUITABILITY
If you are contemplating the use of TV or Internet direct response as a means of generating orders in a one-step campaign, your first task should be to gauge the suitability of your product or service for direct response advertising.  If your product has a competitor on the air right now and that product is selling well, you probably will do well.  Take it to a non-traditional retail outlet, go to a home show or county fair, do not assemble a focus group.  Pitch the product and try to sell it.  First watch what your audience does.  Pay no attention at first to what they say.  Their eyes and their interest in the product are very telling.  Next, see if anyone buys.  Lastly, listen to their questions.  Their questions will tell you where to tweak your message.  If possible, try a print ad.  It’s not a 100% litmus test, but it’s as close as your going to get.  If a print ad is successful, you can bet that a TV ad will follow suit.  If print is unsuccessful, find out why.  It’s not a 100% sure thing one-way or the other.  But testing in print is a good idea.  To be successful at order generation, you should be certain that your product meets the following criteria:

Uniqueness
The most import criterion is uniqueness; your product must be perceived as unique or it must be offered at a price that is unique or it must include a premium that is unique.  You can sell ordinary socks or paper clips that are not different from those available at the corner store, but you must add something to the product, to the story, to the sale that makes it unique and immediate.  In a few instances, products that are widely available in stores have been successfully marketed through TV and the Internet.  But it must be done creatively.  Uniqueness is not as necessary with lead generation and with shop-at-home television.

Product Emotion
Defining and presenting a product’s emotion is the single most often overlooked part of product suitability.  Features, price, appeal, equally important, are present in all commercials.  Product emotion is the characteristic of successful commercials.  Example:  Bee Pollen, a natural nutritional supplement.  This had been advertised on TV many times by bee pollen harvesters.  None were successful.  When the emotion we created for the client was applied, the sales increased exponentially.  The late Jim Sweeny with the Sweeny Agency in Chicago captured the emotions of “d-Con” Rat Poison with a single photograph and no copy.  He simply showed a black and white picture on TV of a baby’s playpen.  No baby was present.  Only a Raggedy Ann doll, torn to shreds.  Unless you define and present your product’s emotion, you will not be successful in TV.

Price
Until about 1988, most professionals argued that no product with a price of over $20 could be successfully sold on TV.  Many higher-priced products had been tired and had failed.  However, as cable stations have begun to deliver upscale audiences, orders on 2-minute spots have been generated for products with tickets of $100 and more.  The Jack Nicklaus “Golf My Way” video cassette was sold for $70 on a 120 second commercial.  Infomercials often sell products priced in the $20,000+ category.  And shop-at-home TV has sold items into the $10,000’s.  What’s the best price?  Will a lower price sell more?  Will a higher price work?  That’s all in the testing.  Can I start at one price and change it upwards?  Yes!  Richard Simmons’ “Deal-A-Meal” started out at $14.95 in the late 80’s.  In the Spring of 1992 it was up to $139.95!  Solo-Flex is over $1,000 and doing quite well even though they started at $99.

Mark-Up
Marketing costs per unit sold will usually be significantly higher in TV direct response than with conventional retail and the Internet, and slightly higher than print direct response marketing.  Hence, the mark up on your product needs to be watched closely.  Enclosed are Revenue Tracking Charts that show where the revenues go and how to budget.  As a rule-of-thumb, for a direct sale on a 120 second or less commercial, you’ll need an absolute minimum of 3:1 mark up over product cost with 4.25: 1 being ideal minimum.  Infomercial mark ups needs to be 5:1 on products that do not have a strong after-market sales potential and 3:1 on those that do have a continuity to them.

STEP #2

Choosing An Agency
Occasionally, advertisers will attempt to produce their own direct response commercials without the help of a direct response-advertising agency.  David Ogilvy commented in his book Ogilvy on Advertising, a must read for everyone in the business, that when it comes to direct response look to a direct response agency.  That’s why Ogilvy bought Alvin Eicoff’s, A Eicoff & Sons, in Chicago.  Direct response is a business unto itself.  An experienced agency will write you a script that sells product.  Not cute.  Not memorable.  Not flashy.  Not expensive.  But one that sells merchandise.  If a direct response ad fails, there’s nowhere to hide.  The blame is easy to spot.  If a brand awareness or impression ad doesn’t work, well, it could have been timing, placement, consumer appeal:  you’ll never know for sure just what went wrong.  When direct response doesn’t work, the perpetrators take the heat. 

Remember:  There is a great deal of difference between an ad that is designed to produce sales in retail outlets and one that is meant to generate direct orders. A direct response ad is unique in that it must motivate the viewer to take an immediate action.  As a result, direct response ads present a different set of creative problems than do other types of advertising.

A note of warning.  There are fly-by-night agencies.  They’re known as turn & burn companies.  They quick grab $5,000 and more from unsuspecting clients promising them huge exposure – “We’ll get you in front of 50,000,000 households….” and deliver nothing.  GET REFERENCES!  CHECK THEM OUT!  And, as you’ll read further, the number of exposures, or, the number of households your product is exposed to, has nothing whatsoever to do with orders.  It’s been proven again and again.

How much do agencies charge?  Some ask for a fee against commissions.  Some clients pay a limited fee and a percentage of the sale.  Negotiate what’s best for you.

PART II. — The Internet

The challenge of the Internet is to get ‘visitors’ to your site.  One uses the same techniques of infomercial marketing when creating one’s web-site.

1.  Search Engine Placement — Submitting your site to the major (and minor) Search Engines can be done in-house using any one of several computer programs selling for under $100.  I use “Web-Position Gold”.  A good program will go over everything you need to do and what not to do.  You need to allow a minimum of 6 weeks for your site to be accepted by a Search Engine, some take over a year.

2.  Pay-Per-Click Advertising– This popular method means you pay the Search Engine company each time a visitor ‘clicks-on’ to your site from their Search Engine.  These costs can be as little as 1¢ or as high as $100 or more.  You can check these costs with each Search Engine company.  You can also go to www.Overture.com, a major Search Engine owned by Yahoo!.  Overture allows you to see exactly what your “Key Words” are selling for.  You can put limits on your spending by setting a predetermined limit.

3.  Affiliate Advertising– This allows you to put your logo on someone else’s site.  You pay for placement just as you would for a print ad.

An inexpensive method to get visitors to your site is to run small classified ads.  You can get a small classified ad in USA Today for as little as $60 per day.

Be sure to include your web-site’s address (URL) in all your advertising.

If you can afford a $25,000 annual print advertising budget, you can get $125,000 worth of print advertising in newspapers and magazines coast-to-coast.  The caveat here is that your ad must be a direct response ad, and, you cannot already be an advertiser in the journals you select.

The Internet promises to overpower all other forms of advertising in the future.  Without a big budget, you need to allow for the time needed to build your site’s awareness.

Like all direct response ads, test, test and retest.  Keep your site up-to-date.  Include ‘links’ to resources visitors can use.

 

THE FORMULA

“No matter how difficult the problem, there’s always a quick, easy and simple solution. And it’s always wrong!” . . . . H.L. Mencken

Amazingly there is a formula for a successful direct response television commercial. Your commercial must meet all four of these points. Attention, Interest, Desire, and Action. It’s called the A.I.D.A. Formula. If one of the ingredients is missing, your ad is likely to fail. Be sure all steps are included.

Attention:
Your ad must grab the viewer from the outset. Don’t forget the viewer’s mindset:
“Here I am at home relaxing watching TV. Colors, lights, sounds. Don’t bother me.”
You’re asking him to pay attention, get involved, go to the phone, and buy something. People do not sit in front of TV or at their computer with a credit card in one hand and the telephone in the other. So for them to behave as you want them to requires getting their Attention.

Interest:
Your ad must describe very specific benefits that answer immediate problems that are in their lives right now, not tomorrow. These benefits must be explained from their point-of-view. They must feel that your product is the ultimate answer to their problems in order to keep their Interest.

Desire:
“. . . emotion for the sake of emotion is the aim of art, and emotion for the sale of action is the aim of life.” Oscar Wilde

While I prefer not to stress one ingredient over the others because all are important, it’s Desire that makes the whole thing work. Desire is making your message so perfect that the viewer not only wants to buy, he will actually fell badly if he does not. Guilt sets in. We’ve received calls for merchandise that has been off the air for 2 years. These people carried our number in their wallets for years. They just wouldn’t throw it away. And they ordered. If your ad is to work it must concentrate of Desire.

Action:
The “call-to-action” (or CTA) segment of the commercial encourages the viewer to participate now. When you tell your viewer how much your product costs, the price should be both seen and heard, twice. Remind them what they’re getting for their money. Since you pay the order capture people for every phone call they answer, you don’t want to waste money with calls that ask for information that should have been included in the ad.

Don’t forget. We may not have a second chance at them. They probably will never see our product in the retail store. So we’ve got to motivate them to act right now. This is done with limited time offers, special premiums, and other techniques. This final ingredient is too often taken for granted. Don’t lose them now. Make them get off the sofa and take an Action.

HOW MUCH DOES IT COST?
A hypothetical budget is enclosed. When you ask for a budget for an infomercial, include items having to do with marketing of the product as well as production and media. Don’t forget, a DR ad is just like opening a retail store. It is a business unto itself. The attached budget is offered as an overview. Each product has its unique requirements.

FILM VERSUS VIDEO TAPE
A commercial can be shot on film or video tape. Video tape costs about 1/3 of the cost of film. Both have advantages. The creative director will be better able to recommend one over the other since the commercial will dictate what is needed. However, cost being a concern, we strongly recommend video.

If you decide to use film because you want the “look” of film, we recommend 35mm. Be prepared to pay a passel though. Using 16mm film is not significantly different from high quality video tape with a special “film-look” effect. With video use BetaCam SP. 1”, 3/4SP, and others are acceptable. But BetaCam SP is the route to go today.