Cannella's Robert Medved: DRTV Plays Key Role in Media Mix
In an increasingly fragmented media market place with a proliferation of new channels, a reasonable direct response marketer with even a minimal knowledge of economics could be justified in thinking that media rates should come down. But advertisers find this isn't the case. Why?
According to Robert Medved, president and media director of Cannella Response Television and past chairman of the Electronic Retailing Association's Media Council, it's in part due to the cable industry's response to new technologies like video on-demand and TiVo.
By creating new "brand" channels targeted to a specific demographic niche, the cable networks have been able sell time to general advertising agencies who recognize that, even though these channels might only reach 15-35 million households and fly below the Nielsen radar, they provide an effective way of reaching a target demographic.
"The fact that these channels can survive is proof that they are getting eyeballs," Mr. Medved said. "Rates remain high because 1) people are watching these channels and 2) to non-traditional DR marketers, these rates are comparatively inexpensive. They can get half an hour on a digital tier network on DISH or DirecTV or on digital Time Warner that's reaching 12-15 million households for a couple of hundred dollars versus a half hour on a CNBC, Court TV or USA that'll run $30,000. They're getting hundreds of viewings for a fraction of the price."
Traditional DR marketers are facing competition for media slots from a new breed of DR advertisers who are looking at DR for reasons other than making enough sales during that half hour to pay for the cost. These newer players are using DR as part of a broader media plan to drive their brand, regardless of the amount of sales from TV.
As Mr. Medved says, "They're buying cheap eyeballs."
With more demographically targeted channels, "cable networks are able to pitch themselves without Nielsen ratings because companies have opened their eyes to other methodologies of holding advertising like cost-per-order, per-click or per-lead."
Brand advertisers have picked up on what direct marketers know when products go to retail - that an infomercial is a way to educate consumers about the key selling benefits of your product, even if they are not picking up the phone in the middle of the night to make a purchase. Someone going to his or her local Home Depot in search of a drill or a ladder has a better chance of winning the lottery than finding a store employee to help, let alone one who can explain the features of the various choices. But having seen infomercials for Mansfield Power Tool's Dual Drill (a Cannella Response client) or the Little Giant Ladder, customers have what they need to make an informed choice.
Mr. Medved is considerably more sanguine about the future of DR advertising in the face of new technologies like TiVo, VOD and searchable ads than many of his colleagues in the DRTV world.
"There will always be people who are couch potatoes at heart," he said. "There's also a social element of watching a TV program when it actually airs, a communal feeling. People said the VCR and the Internet would spell doom for DRTV and it didn't happen."
Reach Mr. Medved at email@example.com