Also, some Corporate Product Categories work very well. Television is without question the most effective marketing medium for reaching and persuading vast numbers of people. Television is able to generate an emotional impulse that leads to a purchase. It is also typical, that a payment plan i. A 3 to 1 mark-up ratio is typically the lowest ratio that should be considered. The larger your markup ratio, the better your chance of success. A markup ratio of 5-to-1 offers your product the best chance or being successful in a DRTV campaign.
The DRTV industry is relying more and more heavily on the ability to generate incremental revenue from up-sells. It is becoming increasingly critical that your product have add-on's or has the ability to spin-off new, related products that can be sold to your customer list. Typically, the owner of a product licenses his product for a royalty fee. This is the most common path to DRTV success given it reduces execution risk and minimizes the huge financial risk associated with a DRTV marketing campaign.
Joint ventures and self-funded campaigns are also options available to you. The inventor who licenses his or her invention receives a percentage of sales in the form of a monthly or quarterly royalty check from the licensee who is responsible for taking the product to market. Thus, you make money by simply giving the permission to produce and distribute your product. Such an agreement that both parties abide by is called a Licensing Agreement. It is signed by all of the parties involved after negotiation and has various clauses that provide the parameters of the agreement.
These days, anyone armed with a basic desktop computer can make just about anything imaginable come to life on a screen. Unfortunately, when it comes to short-form DRTV production, this low barrier to entry tends to bring out the worst in people—especially those who urge to be George Lucas for 30 or 60 seconds.
Your Invention on TV: DRTV Basics
Jeff Young at ShadowBox Pictures produced the program's spot. Atomic Direct's spot advertising for i-opener includes a toll-free number and Web address for the product. Once consumers arrive at the company's Web site they view Web site animation developed by Atomic Direct. By the time they make it onto the air, those , or second spots look like a piece of cake to throw together.
After all, how hard could it be to write a script, get a camera and throw some talent together to create a short-form infomercial. Don't be fooled by their appearance. Much work, time, sweat and effort goes into each DR spot that makes it onto the air. Typically, she starts with a product that brings with it a bit of creative strategy.
From there, she brainstorms with the producer or director to come up with a position that they agree on, and maybe even an offer that they sell to the client. Then, she drafts a rough script, and it's back to more brainstorming—this time with the client included. The next step, according to Szot, is the shooting of one spot with three different tests: price, offer and value-added. Six months later, if it's applicable, I refine the spot again to drive retail, and that's it. Short form typically has a short life. Toronto-based Phoenix Productions puts a greater emphasis on image and relies on a softer sell approach in DR spots for clients like Kmart and Walgreens.
Know that if you don't do your homework, your product could fail too. But there's a positive side to the advancements in spot production, according to Feinberg, who says that you "just can't miss what's right about short-form production when you see a spot that does everything right. But getting back to those low barriers to entry, because Feinberg isn't the one who has noticed how they're affecting the industry. Prices are going up, quality is improving and clients are demanding more and more. In other words, it's business as usual in the world of spot production.
And while all agree that the costs for creating good spots have increased, so too have the variables involved with the process. Those variables include:. Who you hire as your production team will automatically determine up to half of your production budget. On the downside, Szot says too many marketers are still hoping to run a spot one weekend, then reap the rewards by the following Monday. Test your price, test your upsell—test, test, test.
Listen to what the numbers are telling you and pay attention to your timing. It has infiltrated just about every industry in the last few years, the DR space included.
Call it the 'Net, call it the Web, call it cyberspace—by any name, it's a powerful new medium that direct response advertisers are using with a vengeance. In fact, I can't think of a single DR production we've done in the last two years that didn't include the Web address. Doug Garnett, president of Portland, Ore. However, he adds that consumers are still not purchasing from the Web in large numbers.
I think a lot of people were using the DR format because they could get media rates that way. For example, Marshall says a few of his clients from the insurance industry are more interested in directing potential customers to their Web sites, and not so much interested in taking phone calls from them. But a Web site does not a toll-free number make, so for now those companies solely interested in driving traffic to their sites will have to wait for the lower rates. For the last year or so, Wonderful Writer, LLC's Szot says she's been deluged by inquiries from pharmaceutical companies and Fortune companies.
They want DR spots, and they have money to spend. After all, she adds, when was the last time you heard "allow six to eight weeks for delivery. People respond to that. Grey Direct's Feinberg says right now, "everyone is doing spots," from Fortune companies to start-ups, dot-coms to brick-and-mortar institutions, and national brands to local newspapers. Expounding on that comment, Feinberg says it's the dot-coms that have raised the noise level and "weirdness level" in DRTV recently. In the drive for intrusiveness and differentiation from competing Web sites, he says, many of them have spent "horrifying sums of money on truly dumb advertising.
In nailing down just why all of these firms are using DR spots, most agree that the goal is a mix of brand awareness, driving customers to retail, with a bit of direct selling thrown in. Lead generation is another option, though it's an expensive process that not all companies can afford to manage.
The Titans of Direct Response
In fact, Atomic Direct's Garnett says he wishes more clients would use spots for lead generation, which takes the capital backing to get the leads and convert them effectively. Duane Andrews, president and creative director for Toronto-based Phoenix Productions, says he sees more of an emphasis on image in DR spots, and less focus on the quick demonstration type of spot. However, that signifies a move away from the hard sell approach that traditional DR spots were originally after. But that direct-to-retail softer sell approach works for a lot of our customers right now.
The Firm Multimedia's Cunningham likens the running of a spot production company to a balancing act. He says it's all about owning the latest, the fastest and the coolest, while at the same time trying to determine what has real staying power. According to Grey Direct's Feinberg, the real challenge is creating a clutter-breaking idea in a context that makes people respond immediately. For every down-and-dirty, shrill announcer over product demo shots, you'll also see some highly conceptual, beautifully art directed, carefully cast spots. FMS Direct's Buchser concurs, and says that in the past, it was good enough to see a product, write a script and throw it on the air.
Now, success requires a well thought-out presentation based on research and market analysis. Overall, the real key to success in spot production still boils down to one thing: the product. When the words "direct marketing" are uttered to the average consumer, they will most likely conjure up thoughts of late-night infomercials and the hundreds of envelopes of junk mail they throw out on a monthly basis. While these are valid direct marketing tactics, good marketers know that there's a lot more to direct marketing than just getting in a consumer's face.
This year, with the Internet transforming into a medium that symbolizes progression and success for many of the companies that are setting up shop online, the direct selling arena is no longer limited to just traditional brick-and-mortar companies. As an invaluable direct selling tool that virtually eliminates the middleman, electronic commerce is nothing less than hot, and more than one of the direct marketers on our list knows it.
With that, we salute the following top marketers of the year, whom we've chosen for various reasons, but mainly for remaining flexible and representing growth in a rapidly evolving business climate. Whether they're on the front lines or working from a back office, all of these individuals played a vital role in their companies' growth in the last year. It started out with the Orlimar Trimetal, and then I was flooded with requests to write for golf gloves, trainers, putters, books and videos," says the Minneapolis-based writer. Success for Szot means that now, after nine years of writing direct response and 22 years in the advertising business, she gets to pick and choose her projects.
Szot, who opened her own business in , says her recent accomplishments include generating 1, orders a day for Fitness Quest; moving , units in 30 days for NordicTrack when they had projected 90 days ; creating the first-ever infomercials for Troy-Bilt; and writing all four of the highly successful David Dikeman Command Performance shows. Today, Szot says many clients ask her why she doesn't subcontract work out. She explains: "I don't think I'll ever do that because I'm just passionate about writing. I always plan to be at the helm of every project I take on—and let's face it, that's why people call me There's nobody down the hall.
A related problem, familiar to anyone who has ever worked from home, is how easy it is to be distracted. But I've always been very disciplined. You have to have a certain type of discipline to work from home; I don't think it's for everybody. As the name of her business, Wonderful Writer, LLC, demonstrates, Colleen Szot takes a direct, aggressive approach to spreading the word about herself. How do I let them know I'm here? Szot didn't wait for a healthy cash flow before she began to market. That has made a ton of difference.
Number tow, she's got a toll-free number. She's making it easier for me to call her, and she can obviously justify that kind of expense. And number three, she's her ein periodicals that I'm reading. Angie knows best to call me whenever US West comes out with something new that might help my business.
Marketers look for salvation in creative, but can high production values cover up flawed merchandise? Colleen Szot recently found herself at home, sitting down to watch an infomercial she had scripted. Produced by Randy Argue, the minute show was for First Bank of Marin's "Take Charge" program, a customized, secured credit card that also helps users take charge of their finances and get back on track financially.
A TV special about credit? While not every infomercial these days is neatly cloaked in an information-packed wrapper, marketers and producers are taking new and different tacks to get through to a world full of consumers who are becoming more and more immune to advertising by the day. An increasing number of marketers are turning to short-form spots, then they're using that feedback to structure their long form, according to Szot. It doesn't work that way. The most successful products are the ones with a lot of media money behind them.
These marketers, Renfrow adds, spend a lot of money developing their product, but when it comes time to give it to the producer who will get it "out there" for them visually, the "scrunching" commences. As a cheaper alternative, marketers are turning to non-qualified, first-time infomercial producers.
Renfrow adds that although airtime prices have come down in the last year, too many companies even the major ones don't put the money into a direct response infomercial that they would put into their second ad. In fact, she's currently dealing with two companies that have spent oodles on print and image marketing but are now looking to squeeze in the DRTV category.
Ad agencies make their money on media, and [most] don't even know how to buy DRTV media. To do it correctly they usually have to farm it out or form their own direct divisions, and most don't really want to do either. Another of Renfrow's peeves is over-promising to consumers an issue that product marketers pick up on when returns start flowing in. They're making absolutely ridiculous claims as in the weight-loss and fitness categoryand are setting themselves up [for criticism] by news-magazine shows, for example.
What easier industry to pick off than the infomercial industry, which continues to make assertions that people, for example, can lose weight in five minutes? Renfrow has a cousin in New York with a beautiful home, impeccable taste in furniture and a roomful of unused DRTV products. We are selling here.
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When it comes to boosting brand awareness, infomercials continue to prove themselves as a suitable medium for imprinting brands in the minds of consumers. The retail outlets helped, but only so much. The Appels found that they could get the product into the stores, but then the OxiClean would sit on the shelves. Rather than spend millions on a traditional advertising budget through the regular media channels of print and television advertising, Max and his family decided to take advantage of another revolutionary marketing channel: HSN, or the Home Shopping Network.
It became the first national shopping network in , revolutionizing the way shoppers could view, phone and buy products right from the comfort of their own home. When they needed a reliable, confident and effective TV pitchman, they first thought of Billy Mays.
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Orange Glo International quickly ramped up to over 20, units per month of OxiClean and Orange Glo, and then soon added several other products like Power Paste, each also selling around 20, units per month. The return was around a 2. In , after a competitor began selling a competitive product via 2 minute short form direct-response advertising, OxiClean produced its first 2-minute spot with Billy Mays. The MER declined slightly to range between 1. To put this achievement in proper perspective, remember: this was in an era where percent of the revenues were received over the phones!
Forget banner ads and eBay and mouse clicks and Amazon. Meanwhile, web sales now account for 50 percent or more of most campaigns vs. Both are third party organizations that track media across dozens of networks to judge which products are spending the most on media and are presumed to be the most successful. With bigger numbers came bigger retailers. With TV advertising now in full swing, tubs of OxiClean and bottles of Orange Glo started to fly off the shelves, and other retailers began to take notice.
Eventually, major retailers started to list many other products made by Orange Glo International. Today, of course, OxiClean and its many subsidiary products are sold in tens of thousands of retailers all over the country.