September 1998
Direct Response TV: A Significant Part of the New Marketing Convergence
by Kenneth M. Culpepper
Direct Marketing Magazine, September 1998
Surely, all of us have seen our share of direct response television (DRTV) advertising. Whether we were "slicing and dicing," "clapping on and off," or have "fallen and cannot get up," most of our more memorable illustrations from DRTV advertisements have been great comedic and sitcom material. Then there are "infomercials." Why doesn't someone just announce at the beginning of some of these that "due to the lack of quality programming and air-time sales, we offer this product or service for those to whom this appeals?"
Why does anyone still use these DRTV approaches? Because sometimes consumers and/or businesses respond to them. The prosperous return-on-investment (ROI) from a good DRTV spot makes those who have seen or had success with it come back to it. The issue addressed here is that marketers have not consistently been able to determine long-term ROI for using DRTV as a regular component in a client's marketing mix. Additionally, let us be quick to point out that there are many DRTV advertisements which represent quality products and services, and some have been produced with excellent production and creativity.
Therefore, the questions marketers should begin to ask about using DRTV ought to be taking on more accountability for a DRTV marketing investment. We should begin to resolve marketing business questions including: How can we use DRTV more strategically? How can we create higher DRTV response rates? How can we blend DRTV strategies with the entire marketing strategy?
There Isn't Anything Normal About It
DRTV has often been used as an all or none component in marketing strategy. Most of the time it is not used with traditional marketing strategies. This is due to several traditional approaches in marketing and advertising. Primarily, most marketing and advertising budgets are not usually large enough to incorporate both DRTV and traditional creative and media placement strategies. Therefore, it is typically left out. When it is chosen, it is usually expected to be the real test of the success or failure for a product or service's introduction, reactivation or marketability in a chosen marketplace. Typically, either too much emphasis is placed on DRTV to perform the entire marketing magic or it is left out completely. Both of these approaches are unfair to the value and measurement of DRTV in the marketing mix.
An Immediate Strategic Component
DRTV is an immediate help as a strategic component to many short and long-term marketing strategies. The ability to collect strategic marketing information with customer purchase data at a precise point in time, as part of the transaction, is valuable and unique. Unique because DRTV allows the inbound telemarketer to collect specific customer marketing information in large chunks immediately during the real-time transaction. It is also achieved without waiting for typical market research collection methodology, test market mailings, or retail test market promotions. Valuable because the source-data strategies for collecting marketing specific information can be changed on the fly when any other significant marketing variable is identified, and the recent gathered customer and prospect information can be quickly analyzed for strategic marketing direction.
The importance of this is immense for several reasons. First, the knowledge that comes from modeling the first few response batches can now give updated strategic direction to the marketing campaign. It will either confirm initial assumptions to market response or it will send a front-end warning that our initial assumptions were wrong so we may correct our strategy and resume in another contingent direction.
Second, one of the main complaints from financial, telecommunications and most other DRTV participants is that prospecting is too expensive for using any continuous direct mail and list acquisitions. However, by collecting strategic data from DRTV response batches, marketers can now dramatically reduce customer acquisition costs. This is done by modeling each identified batch of customer responses to determine who is a qualified prospect for initial and follow-up direct mail, telemarketing, sales force efforts, and where it is logical for initial media placement.
For example, one business-to-business customer uses their DRTV spots to identify the names of individuals who are management employees with child care or elderly care needs during working hours. They then use this contact with the individuals to collect more strategic information about them and the businesses where they work. The marketer then sends a targeted (income/gender/age/marital status) mail piece to the individuals, and follows up with a sales call and employee services catalog to their employer. This technique not only creates significant amounts of immediate prospects, it also allows the marketer to determine who and where other individuals and businesses are through prospect optimization.
All prospecting and lead generation programs thrive by the same law; timing is crucial. DRTV not only can give a marketing strategy significant marketing information, but it delivers data before marketing dollars have been wasted. The waste comes in the form of lost interest, competitor entry, closure to marketplace windows of opportunity, or changes to customer/prospect circumstances due to the time elapsed between collection of data and the strategic marketing effort.
New Marketing Convergence
New technologies, laws or any other non-controllable marketing components have always had power to either force immediate changes to or evolve the marketplace. Technology advancements in the cable television industry will eventually cause traditional television advertising to change its approach to marketing strategy. Traditionally, television advertising strategy has been based upon the amount of exposure to audience viewing of a client's television advertisement and the indexed media usage patterns for segments of marketplace viewers. Additionally, through using database marketing to post-test brand awareness and incremental sales factors, some indications can be given of ROI for marketing dollars that have been spent collectively. Future technology will require DRTV and traditional television advertising to get much more strategic and accountable to their client's marketing dollars. The cable television industry will eventually make it possible for each cable household to be marketed to by each household's variation in value and behavior (See Measuring the Customer's Variation In Value: Direct Marketing Magazine, May 1996).
What Does This Mean?
This means that new marketing convergence will begin to develop. The television set will become more like the mailbox. This doesn't mean "like the mailbox" in the sense of e- mail. Convergence between e-mail and television is currently in place. However, this means "like the mailbox" in the sense that each cable television household will start strategically receiving television advertisements by how each household will predictively respond to it. This is currently like using database marketing with mail pieces, only with television spots.
This will cause two immediate reactions: 1) marketing, advertising and public relations agencies and corporate marketing departments will begin to get seriously involved with integrated database marketing to help them with new television placement, and 2) DRTV will become more prevalent in the marketing mix. Marketing, advertising and public relations agencies along with corporate marketing departments will need the skill sets of integrated database marketing for more than direct mail and telemarketing. They will need them for television advertising placement, and will either need to hire people inside their organizations or strategically align themselves with an integrated marketing firm.
Conclusion
Currently, DRTV is a great strategic marketing element to mix with most short and long-term marketing strategies. DRTV's ability to collect significant marketing information with customer purchase data at a precise point in time, as part of the transaction, is valuable and unique. In the future, DRTV will be more appealing in the marketing mix because it will have options to purchase only the households of predictive response. This means that DRTV can and will be used more strategically, create higher response rates, and allow for better blending of DRTV strategies with entire marketing strategies.
Ken Culpepper is president of Integrated Marketing Solutions, Inc., a
knowledge-base marketing firm that
integrates tactical marketing strategy with management of multiple contacts
of businesses to their customers, prospects and channel customers. IMS incorporates
marketing business planning, long-term corporate ROI strategies, and marries
knowledge-based marketing with e-commerce strategy and systems. IMS has
offices in Atlanta, GA (770) 390-9199 and Nashville, TN (615) 782-0461.
(Web: migmar.com/ims)