TV inc
Rosser Reeves, Ted Bates Agency

“Reality in Advertising”, 1961

”I’m not saying that charming, witty and warm copy won’t sell.  I’m just saying that I’ve seen thousands of charming, witty campaigns that didn’t.  Let’s say you are a manufacturer.  Your advertising isn’t working and your sales are going down.  And everything depends on it.  Your future depends on it, your family’s future depends on it, and other people’s families depend on it.  And you walk in this office and talk to me, and you sit in that chair.  Now, what do your want out of me?  Fine writing?  Do you want masterpieces?   Do you want glowing things that can be framed by copywriters?  Or do you want to see the goddamned sales curve stop moving down and start moving up?”

TELEVISION:  FULL MARKETING CONTROL

Full Control of Your Marketing Through Long-Form TV and Internet Marketing

“Making money is easy in America, if all you want to do is make money, young man.”   . . . . Mr. Bernstein to Mr. Thompson in Citizen Kane.

Controlled television (and Internet) retailing and effective use of interactive commercials means the ability to overcome the final, and previously the most difficult, obstacle in the supplier’s sales process.
Manufacturers spend millions in developing and building new products.

Distributors often spend as much in marketing, training, stocking and shipping.

Then they play the role of expectant father, hoping all goes well at the delivery room’s retail counter.

It is unnerving to realize that the combined efforts of hundreds or thousands of people and millions of dollars ride on a retail store’s placement and treatment of a product and his clerk’s perception of it and his individual sales ability.

Barron Hilton was confronted by a guest in the dining room of one of his hotels.  The guest related to Mr. Hilton how this was the first times in years he had stayed in a Hilton because he had been treated badly by a clerk at the Hilton in Cologne, West Germany.  He chastised Hilton for not being more careful in his hiring practices.  Hilton confided to be the guest that is terribly disheartening to realize that the projected profits from the millions of dollars his company spends to build hotels and to get and keep customers often goes for naught due to an obscure clerk’s poor attitude.

Imagine:  Your very best employee greets every customer.  Fantasy?  No.  The power of TV and the Internet.

The breakdown occurs when the product arrives at the retailer’s store.  The time and money expended is now totally dependent upon the store’s image in your potential customer’s mind, the retailer’s positioning of the product in his store, the store clerk’s interest in demonstrating and ‘selling’ the product and the customer’s ability to wade through this obstacle course with sufficient interest and persistence until the clerk decides to write the sale.

Television and Internet interactive marketing strategies can generate enthusiasm and excitement among retailers, their employees and everyone’s customers.  A coordinated effort, utilizing a product alone or combined with a cross merchandising plan, will provide the additional performance we are recommending.

We accept the fact that the frequency of exposure is directly related to the frequency of sale.  The trick is to achieve a high rate of frequency without increasing the advertising budget.

Studies have shown that consumers will have less sales resistance when presented with names they recognize.

It is also clear that that is the purpose of institutional, brand awareness and passive advertising.

To use direct response to promote a manufacturer’s image, to create a desire to acquire his goods, to initiate purpose of movement and increase revenues without increasing the advertising budget and without interfering with his conventional retail sales strategies are the goals of Internet and infomercial marketing.

Too often, after a manufacturer has done everything right, after the trades tout the product’s performance and value, projections are not met.

We did a test recently involving the purchase of a PC computer.  Our goal:  to buy an IBM.  The local discount computer stores that carried IBM and a number of other brands had one sales person who was constantly busy.

Once cornered, I asked about an IBM.

“Too much money.  Get a KLH.”

“I’ve never heard of a KLH.  I told him I wanted to deal with a company who’d be around years from now.

“They’re all the same,” he said.

We went to Sears.

Forget it.  Willy Loehman’s grandson was unable to help.

The Internet’s power and television interactive marketing, when properly presented, when its diverse vehicles are understood and controlled, brings new products to new customers, makes existing and future customers more aware of the product’s identity, redefines test marketing by allowing highly targeted areas and precisely targeted consumers to be charted at a profit, reinforces product awareness in undeveloped or non-producing territories and gives a manufacturer a better opportunity to take full advantage of his product’s potential.

PASSIVE VS. INTERACTIVE ADVERTISING

“Ideas are a capital that bears interest only in the hands of the talent.” Rivarol

Using television to advertise product is a proven success story.  However, the cost of using TV to introduce customers to product is too often prohibitively expensive and very difficult to factor.

             -Did the commercial itself sell the product?

-Could I have cut back on my advertising budget and frequency and still achieved the same results?

             -If I increased my budget, would I sell proportionately more?

             -Am I targeting the right territory?

             -How accurate are my test markets and projections?

-Am I reaching the customer who is interested in parting with his money to buy my product and is my product being presented to my customer in a manner that moves his interest from back of mind to top of mind to acquisition?

             -How many of television’s audience are paying attention to my message?

A cost comparison of television and Internet retailing using interactive commercials to conventional passive commercial advertising is in many ways a subjective problem.  Prime time conventional advertising reaches a large, albeit passive, audience.  Television retailing reaches a much smaller group of consumers who are, by definition, immediate and interested buyers.  Which is better?  The answer, we suspect, is that both methods are useful vehicles and both should be employed.

Conventional television advertising reaches a mass audience who, if told four or more times about a product of which they may have a passing interest, will keep that product’s brand name in mind for perhaps three weeks.  Conventional television advertising, if it is within the means of the company, should be a part of its ongoing marketing plan.  While this manner of advertising does not interfere with one’s retailer organization, it does require the institutional advertiser to rely on his retailer completely.

Conventional television advertising rates, depending on the show’s ratings, are $6 to $10 per 1,000 household “pass by” for prime time and $2.20 to $3.75 for soaps and quiz shows.  Late night shows are getting from $3.50 to $5.50.  From 2:00 A.M., until 4:00 A.M. rates are $2.00 to $3.00.  If one wanted to reach 75% of the market four times in 90 days, it would cost $1,040,694 on the top rated shows in prime time.  On the other extreme, the costs for off hours to reach the same audience would be $208,695.  But the question of effectiveness still remains.

Look at the numbers for a minute.  In order to reach 75% of the American audience awake between 2:00 A.M. and 4:00 A.M. on commercial broadcast television with a single 30-second spot, one has to be able to justify a $208,000+ expenditure.  How many items at a given price would have to be sold to rationalize that expense?  Take the same numbers and project them to prime time rates costing as much as five times more.

According to A.C. Nielsen, at any given moment 6,500,000 households are turned into a long form commercial program.  Millions more are on the Internet searching for products.  This is not a passive audience.  This audience is made up of qualified consumers ready to buy.  At prime time rates, one would expect to spend $35,000 or a lot more for 30 seconds exposure.  At off peak rates, the cost would be $7,000 for 30 seconds.  Since home commercial programs spend 15 to 20 minutes on a product, a manufacturer would have to budget $1,050,000 per product per showing per program.

One television commercial program format allows a manufacturer to expose products to 3,500,000 qualified shoppers 39 times in 90 days for less than the cost of a newspaper ad.  The programmer and the vendor recover their expenses and make their profits from sales of the product to its audience.  When properly approached, program length commercials become a profitable promotional vehicle.

Yes, they attract a smaller audience.  But the audiences that are attracted are not sitting passively by.  The audience is made up of buyers!

We have shown manufacturers how our approach to the various television interactive marketing formats tell their company’s story; we show our suppliers how these formats are able to demonstrate and sell a product at a profitable price point, which will not interrupt or interfere with a company’s ongoing marketing; we demonstrate and sell products with interactive commercials.

What does this cost?  A rule of thumb is $1,500 per air time minute.  Since the programming is “evergreen” (the same segment runs as long as it gets a profit-maiking response), the actual cost often becomes insignificant.  There is a ½-hour program on a diet program that has been running 7 days a week 365 days a year for 12 years and is still pulling positive responses!

RETAILING VS. LONG FORM TV ADVERTISING

“You’re a very small retail store with a very big front window.”…..William M. Thompson

The complications of setting up an internal division to handle television and Internet sales may be disruptive and perceived as competitive to one’s retail marketplace if not done properly.

Your marketing agency or consultant will help you overcome that problem with strategies that have proved successful.

Beseler Photo Marketing Company’s Pete Buckles told me that his firm placed a “retail rate” (DR) ad in Popular Photography magazine.  A retail DR ad is considerably less expensive than institutional advertising.  In fact, direct response print advertising rates in all newspapers and magazines can be purchased for up to 80% off rate card! A DR ad features a retail price and ordering instructions.  It’s a format commonly used by mail order firms.  In order not to be perceived as competing with his retailers.  He advertised his product using a direct response ad at full retail even though it was heavily discounted at retail.  Much to his dismay, he had dealer complaints.  Even though the dealers who complained were offering the very same unit for 30% less, they interpreted Pete’s action as a directly competitively.  By the way, even at list price, they sold a lot of product.  Their ad budget was underwritten by the sales.  And, sales of his product at retail went up.

Our psychography reports showed there are untapped customers.

Our after-market selling techniques put these new customers into his retailer’s stores.

WHICH PRODUCTS WORK BEST?

“I have never made the slightest effort to compose anything original.”  W.A. Mozart

“Originality is the most dangerous word in advertising.”  Rosser Reeves

In 1988 we created a program for Yashica Corporation, the camera manufacturer.  They had 5,000 cameras at $400 retail ($265 wholesale) that weren’t moving.  We sold all 5,000 at full retail in 84 minutes at a Cost Per Order (CPO) of $325.  They made $75 each on the sale and $200 each on the subsequent sale of related accessories.  When the direct response TV ad aired, there were about 7,500 of these cameras on dealers’ shelves around the country.  Even though these cameras had been sitting on the shelf with little consumer interest in them, they sold-out within 2 weeks!  Before TV, Yashica would have had to sell them at a loss on the closeout market.  Genius?  Not at all.  We incorporated a sales technique used by Bell & Howell in the 30’s to sell movie cameras door-to-door.  It worked greatly.  If we’re lucky, we’ll never win an award.  The Clio is awarded for creativity to ad agencies.  Of 81 television classics picked by the Clio festival one year, 36 of the agencies involved had either lost the account or gone out of business.

So take these maxims to the bank:

Prevention does not sell on TV via “one-step” DR.
Ads that are less than 2 minutes long when first launched are always losers.
Use the A.I.D.A. formula (see The Formula):  Attention, Interest, Desire, Action.  It’s worked for 6,000 years and shows no sign of fatigue.
With direct response, there is absolutely, positively no correlation between the size of your audience and the number of orders you receive.
There is no history of a television ad significantly “improving” with increased exposure.  If it doesn’t work in a few days in a few test markets and it can’t be tweaked, forget it.  It’s dead!

The most productive times are early morning, late evening and weekends (bored people will listen to your message and buy).

The most productive months are January, February and March.

Want sales?  Put your commercial on the most boring programs you can find.  People interested in a program will not buy as quickly as those who are being entertained.  The better the program on which your commercials appear, the fewer sales you make.

WHO’S GONNA MAKE IT WORK?

“Managing and marketing a campaign requires people who know how to both start a riot and keep it under control, all at the same time. 

One without the other is utter chaos.”

William M. Thompson

 

In 1849 gold was discovered at Sutter’s Mill in California.  Today the Gold Rush is looked on as a colorful segment of American history.  A closer look reveals that the first on the scene were the carpetbaggers, ne’er-do-wells, gamblers, prostitutes and pimps.  It’s always so.  Columbus, and all those that followed, didn’t set off looking for democracy:  they were after loot.  America was founded on the one principal: The creation of a reasonably level playing field for business.  As such, there are good-guys and bad-guys.

Our industry was no different, especially with regard to long form and shop-at-home television.  We have our carpetbaggers who compete with legitimate merchandisers.  It is often difficult to tell the good-guys from the bad-guys since both offered diet programs, car waxes, paste jewelry, kitchen knives, get-rich-schemes, and miracle cures.   However, within the last couple of years guidelines have been set down and policies have been agreed to by purveyors, networks, producers and regulatory agencies.  The National Infomercial Marketing Association, now known as The Electronic Retailing Association (ERA), was formed.  The ragamuffins that hadn’t been driven out are on their way out.

Advertising in all formats has attained a level of legitimacy.  Its unique creative requirements and specialized media placement techniques is recognized as an art and a science.

Today, more and more companies are learning that long form television commercials and Internet direct response advertising allows one’s very best sales people to sell to attentive customers using an affordable format that does not interfere with but, in fact, supports the company’s existing marketing plans.

Affordable?  It costs less to produce and air a 30-minute commercial than it does to produce and air a 2-minute spot.

As unbelievable as that may sound, I assure you it is 100% true!

Response TV Magazine and ERA provide excellent lists of companies who service our industry.  .

FORMATS & STYLES

“You’ve got to know the territory.”

The Music Man by Meredith Wilson.

Television and Internet direct response marketing and interactive programming has evolved into five formats:

Retail, one step;

Retail, two step;

Lead Generation;

Message;

Syndication.

Each of these formats appears in:

short form (less than 14 minutes in length);

long form (14 minutes or longer);

shop-at-home retailing.

Each has its own characteristics.  Each needs to be weighed independently.  Each appeals to identifiable psychographics.

A description of each is next.

You will hear and read about other buzz words:  Documercials (an infomercial with a documentary format such as “The Civil War” by Ken Burns); Ecomercials (yes, the Greens are getting on the bandwagon with a commercial on whales); Advertorials (this term switches the word infomercial around and tends to apply to print such as those page after page ads appearing in Time, Newsweek, etc.); and, Infotainment (a motion picture that is, in fact, advertising something).

In my opinion anytime the sponsor and the producer of a program are one-in-the same and the purpose of their program is to cause “purpose of motion” and the program runs at least 14 minutes, you have some form of infomercial.

However, the regulatory agencies make things more complicated.  If your infomercial is selling a publication of any form, it is likely that you can get away with murder because of the First Amendment to the Constitution.  If your book relates to your product and you are using your book to sell your product directly or indirectly, you may have crossed over the boundary back to within the grasp of the FTC.

If your infomercial is on travel, things become more interesting.  The FTC is specifically forbidden to look into travel advertising.  Travel is reserved for the FAA (Federal Aviation Administration) and they have virtually no regulations at all, safe to use very general disclaimers if “certain travel restrictions apply.”  Check with the FAA in Washington, D.C. for guidelines.

The most lenient is political.  If you (or your client) are running for office, regardless of whether you have any chance of winning or not, you can say and do what ever you want, Dan Rather’s downfall  notwithstanding.  There has never been a successful challenge to the content of a fund raising political infomercial other than from political ethics groups (is that an oxymoron?).

If your infomercial is religious in nature, you can do anything short of mayhem.  One direct response advertiser claims, “Jesus promises you’ll lose 20 pounds.”

But some infomercials are testing the limits by disguising themselves as regular programming.  Many programs on cable TV, PBS and regular broadcast networks are completely underwritten by a sponsor whose products are featured exclusively on the program.  Frankly, as long as they tell the truth, it’s a good idea.

Unfortunately, the regulatory agencies do not take a position in advance of airing.  They can’t.  Their rules do not allow them to enter the arena until the commercial is aired.  Then it’s too late.

So far infomercials and Internet advertising have been treated fairly by the entire television, legal, government, and advertising industries.  The strict rules the top advertising agencies and their big money clients are required to observe are overlooked more often than not in our industry.  That will change.  When the “Big Boys” enter the game, they’ll bring with them their own rulebook.  Chapter One in their book is:  Bring A Lot of Money.  Chapter One in the infomercial and Internet book is: Bring A Lot of Sales.