Firm Set to Drop Videocassette Co-OpTV By Mail, a division of video direct marketing company the Duplication Factory, plans to drop a 60,000-piece test mailing today of what it says is the first national videocassette cooperative advertising program.
The first video, dubbed Health & Leisure, will be part of a series called the Preferred Shopper Video Showcase aimed at recent mail-order buyers between ages 50 and 64. It features four product pitches laced into 13 minutes of health tips. A rollout potentially to 10 million prospects is slated for fall.
Barry Johnson, president of the Duplication Factory, Chaska, MN, said typical videocassette-marketing response rates run from 5 percent to 10 percent. Also, where videocassettes generally cost advertisers more than $1 each, the Health & Leisure co-op is costing advertisers between 25 cents and 35 cents per delivered video.
"Video is a high-end medium with high response rates," Johnson said. "By adding advertisers, we're lowering the cost hopefully without diluting the medium."
The advertisers' order will rotate so each one gets an equal shot at the lead position. The initial mailing includes two cells of 30,000 videos to test cover creative approaches. One cover is generic and the other is co-branded with Prevention magazine to see if Prevention lends enough credibility to significantly lift response.
Johnson would not say under what terms he has secured Prevention's name or how much of a lift will be necessary to make using it worthwhile. "Let's just say we negotiated an agreement on how Prevention will be a part of it," he said.
TV By Mail's list of seniors was culled from Chicago-based First Data Solutions' DQI2 consumer database, which includes demographic, lifestyle and purchasing-behavior information on 96 million households. According to TV By Mail, more than half of the households on the list have incomes of $70,000 or more.
To gage consumer reaction to the co-op, TV By Mail has included a sweepstakes entry form in its package offering a chance to win a trip to Hawaii, San Francisco or Las Vegas in exchange for recipients' written evaluation of the video.
Initial Health & Leisure advertisers are bed merchant Select Comfort, Renaissance Cruise Lines, Dahlberg Inc. for its hearing aid Miracle Ear and vacuum cleaner marketer Oreck Corp.
Tim Werner, director of database marketing at Select Comfort's direct marketing arm, Select Comfort Direct Corp., Minneapolis, said the company sends more than 1 million videocassettes a year in response to inquiries from nonvideocassette-driven lead-generation efforts. Those videocassettes, he said, have a more than 90 percent viewership rate and a "very solid" conversion rate.
"But those are qualified leads," he said. "Sending lead-generation videos out of the blue to a cold list is an entirely different way of using video for us."
Though even in a co-op, videocassette lead generation isn't cheap, Werner said, other factors may offset the cost.
"You have a chance to be more impactful than typical direct mail because of an ability to demonstrate the product," he said. "Plus, people may hold onto this. Unlike typical direct mail, which often goes right into the garbage, they may file it with their other videos and watch it later."
Werner said the Health & Leisure co-op also offers a chance for pass-along that direct mail doesn't. In fact, Johnson said, people will pass along a good videocassette an average of three times.
"I know it sounds ridiculous, but people perceive them as valuable," he said, "so either [the Health & Leisure videocassette] will end up on a bookshelf or they'll pass it along to someone who they think will be able to use it."
This fall, TV By Mail plans to begin mailing a New Movers & Homeowners videocassette co-op to 250,000 households a month.
A golf videocassette co-op is slated for spring.