Direct Response Television Marketing

Direct-response television marketing takes one of two major forms. The first is direct-response television advertising (DRTV). Direct marketers air television spots, often 60 or 120 seconds long, which persuasively describe a product and give customers a toll-free number or Web site for ordering. Television viewers also often encounter full 30-minute or longer advertising programs, or infomercials, for a single product (see Real Marketing 17.1).

Some successful direct-response ads run for years and become classics. For example, Dial Media's classic ads for Ginsu knives ran for seven years and sold almost three million sets of knives worth more than $40 million in sales. Bowflex, a maker of exercise equipment, has grossed more than $1.3 billion in infomerciai sales. And little-known infomerciai maker Guthy-Renker has helped propel Proactiv Solution acne treatment into a power brand that pulls in $850 million in sales annually to five million active customers.

Proactiv's incredible success derives from powerful, formulaic infomercials in which celebrities and average Joes gush about how Proactiv cleared their skin. "My skin is now clear and beautiful," says Serena Williams. "Yours can be too!"18

For years, infomercials have been associated with somewhat questionable pitches for juicers and other kitchen gadgets, get-rich-quick schemes, and nifty ways to stay in shape without working very hard at it. In recent years, however, a number of large companies—from Procter & Gamble, Dell, Sears, Disney, Bose, and Revlon to Apple, Land Rover, and Anheuser-Busch—have begun using infomercials to sell their wares, refer customers to retailers, send out product information, recruit members, or attract buyers to their Web sites. For example, P&G has used DRTV to market more than a dozen brands. An estimated 20 percent of all new infomercials now come to you courtesy of Fortune 1000 companies.19

Direct-response TV commercials are usually cheaper to make and the media purchase is less costly. Moreover, unlike most media campaigns, direct-response ads always include a 1-800 number or Web address, making it easier for marketers to track the impact of their pitches. For these reasons, DRTV is growing more quickly than traditional broadcast and cable advertising. Some DRTV experts even predict that in 5 or 10 years, as marketers seek greater returns on their advertising investments, all television advertising will be some form of direct-response advertising. "In a business environment where marketers are obsessed with return on investment," notes one such expert, "direct response is tailor-made—[marketers can] track phone calls and Web-site hits generated by the ads. [They can] use DRTV to build brand awareness while simultaneously generating leads and sales."20

Home shopping channels, another form of direct-response television marketing, are television programs or entire channels dedicated to selling goods and services. Some home shopping channels, such as the Quality Value Channel (QVC), European Home Shopping (EHS), and TV SHOP, broadcast 24 hours a day. Program hosts chat with viewers by phone and offer products ranging from jewelry, lamps, collectible dolls, and clothing to power tools and consumer electronics. Viewers call a toll-free number or go online to order goods. With widespread distribution on cable and satellite television, the networks now reach millions of homes worldwide.

Despite their lowbrow images, home shopping channels have evolved into highly sophisticated, very successful marketing operations. A Consider QVC:

Wired magazine once described QVC as a place appealing to "trailer-park housewives frantically phoning for another ceramic clown." But look past QVC's reputation and you'll find one of the world's most successful and innovative retailers. Last year, the company rang up $7.4 billion in sales. It sits along side [American broadcast networks] NBC and ABC as being one of the largest U.S. broadcasters in terms of revenues. And thanks to shrewd coordination with TV programming that drives buyers online, the company's Web site, QVC.com, is now one of the largest general merchandise Internet retailers. Moreover, QVC isn't just a place where little-known marketers hawk trinkets and trash at bare-bones prices. Prominent manufacturers such as Estee Lauder, Nextel, and Tourneau now sell through QVC. Even high-fashion designers such as John Bartlett and Marc Bouwer now sell lines on QVC.

QVC has honed the art and science of TV retailing. Its producers react in real time, adjusting offers, camera angles, lighting, and dialogue to maximize sales and profits. QVC has become the gold standard of "retailtainment"—the blending of retailing

Despite its lowbrow image, QVC is a highly sophisticated marketing operation. The network once sold $65 million worth of Dell computers in 24 hours. When Michael Dell later appeared on the network, QVC did $48,000 in sales every minute he chatted on the air.

and entertainment. QVC folks call it the "backyard fence" sell—the feeling that the merchants are neighbors visiting from next door. But according to QVC's president for U.S. commerce, "we aren't really in the business of selling." Instead, QVC uses products to build relationships with customers.21

Kiosk marketing: Redbox operates more than 8,000 DVD rental kiosks in supermarkets and fast-food outlets.
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