ROI draws clients to DRTV

Direct response television (DRTV) may have, for once, hit 'prime time.' The oft-maligned channel seems to be gaining a newfound respect - even from some unlikely sources.

Direct response television (DRTV) may have, for once, hit ‘prime time.’ The oft-maligned channel seems to be gaining a newfound respect – even from some unlikely sources.

Take for instance, Tropicana Products in the U.S. Last month, in an industry first for a packaged goods company, the division of PepsiCo. used paid-programming to drive viewers to www.tropicananutrition.com to download a coupon for redemption at retail stores. The half-hour infomercial for Tropicana Pure Premium orange juice, designed to change consumer perception that orange juice is a commodity, garnered more than 10,000 downloads after it aired.

While conventional infomercials and DRTV (which can be various lengths from 30-second brand-driven spots to 28- or 60-minute programs) may not have completely shed their corny image, they are gaining ground with many clients. Increasingly, there are more creative and attractive executions, as well as new formats like the National Post’s 15-second ‘More’ spots. But even more importantly, the realization is that properly produced DRTV spots make the phone ring, says Ian French, president of Northern Lights Direct Response Television, Toronto, which recently completed the production of two DRTV commercials for Liberty Health to promote its FlexCARE customizable health insurance plan.

There’s a long list of clients who have experienced success in DRTV including Bell Sympatico, Liberty Health, Amex Canada, Monster.com, Reno-Depot, IBM Canada and ING Direct, which earlier this year launched the third in a series of 60-second. DRTV commercials. (ING Direct’s first wave of DRTV spots featuring its Dutch spokesperson Frederik de Groot, created by Garneau Wurstlin Philp Brand Engineering of Toronto and launched last summer for its savings account, doubled qualified leads to help propel it to 500,000 Canadians.)

The ROI for clients is immediate says Patty Booth, VP and GM of Toronto-based international distributor of U.S. direct response products, Thane Direct, which launched an Ab Swing exercise system via DRTV that ran between August and October. (The 30-minute spot, which features soap star Hunter Tylo, was initially tested in Canada, as well as several other countries, with great results – the international test achieved almost $10 million in revenues, according to the company.) The beauty of DRTV, she says, is that results can be made available as soon as a spot airs.

‘There are a couple measures of success we use,’ she adds. ‘While it depends on the product, generally if your cost-per-order is half your retail price, then you’ve got something quite successful. For example, if I spend $1000 in media, and I have 100 orders, I have a $10 cost per order. Another way is revenue per show – a ratio of two to one is a successful program – a $1000 revenue per show and a media spend of $500.’

But the true measure for a DRTV commercial is whether or not it continues to air, says Guy Stevenson, managing director of OgilvyOne Toronto, which has worked with AIG and Amex Canada on DRTV programs.

‘With DRTV spots, you stop running them if they don’t work. Before it was rebranded AIG from Norwich Union – how long was that ‘Patrick’ spot on? It lasted a good 10 years, because it kept working.’

Don Barnes, managing director of OgilvyInteractive, says one of the most interesting new DRTV developments is the role that the Web is playing as a response or drive-to channel. ‘In general, we’re seeing at least one third of the response coming through Web sites. And when people go to a Web site – it cuts down a ton of call centre costs. All of a sudden you’ve changed the whole economics behind a DRTV spot.’

After all, economics is often what stops clients from investing in the channel since it’s all about the cost per response. Although, he adds, the hard economic times of late have brought the price of media down, which has encouraged many clients to consider DRTV.

Airtime is also a factor in the growing number of launches lately, says Booth. Peak DRTV times fluctuate opposite to traditional mainstream advertisers: pre-Christmas advertisers come off-air or reduce spend a week before Christmas, so more airtime is available to DRTV advertisers, she says.

Northern Lights’ French, however, contends that cost or availability doesn’t necessarily drive DRTV – rather, people come at it from tactical level. ‘It’s a tougher market now so we need to use tactics that are compelling and that we can measure against. DRTV allows you to quantify exactly what you’re selling, and how much it is costing you.’

Last month, the Hospital for Sick Children Foundation launched its first full-length DRTV program. Liza Jerome, director of community development at the Foundation, says they are hoping to build on the success of two two-minute DRTV campaigns, piloted in December 2000, which set new industry standards for the not-for-profit sector: raising $850,000 and doubling the first-year revenue goal.

‘Because it was a new medium for us we weren’t sure if it would work. Now, based on the amazing success of that program, we’ve launched a new long-format program,’ she says. ‘This gives us the opportunity to reach people in a different way. We’re reaching a market through DRTV that likely wouldn’t even give through direct mail – in direct mail, it’s an older population that is comfortable giving through the mail. The market we’re seeing for our DRTV is younger women.’

The DRTV initiative, produced by Eagle-Com, Toronto, will air on both national and local stations including CTV, the Biography Channel, MSNBC, and Canadian Learning Television. By March 2004, the Foundation hopes to raise $1 million through the program, which encourages monthly support through the Miracle Club.