Is DRTV Dead?
While attending the DRTV Expo in Long Beach, CA, last month, several people in the DRTV industry offered grave predictions about the future of the DRTV industry, most particularly in the arena of infomercials.
"The infomercial is dead," pronounced one industry executive in a moment of channeling Friedrich Nietszche. "It has no future except for the Fortune 500 companies."
That opinion struck us as interesting, particularly because we have not seen that much infomercial activity in the corporate realm in the last year. Most corporations appear more likely to run a DRTV spot campaign. We have seen such pharmaceutical companies as Roche, Rhone-Poulenc, Astra Merck, Schering, Hoechst, Galderma Laboratories and Glaxo Wellcome air DRTV spot campaigns to generate leads and build a database for direct mail campaigns.
When corporations do run infomercials, it is usually to explain the complex features of a new product or to tell "the entire product story." We have seen in the last year infomercials for Philips Consumer Electronics' WebTV Internet terminal, Prestone's battery jumper, Toshiba's DVD player and Eastman Kodak's new digital camera.
Although these corporations have millions of dollars in their annual advertising budgets, their infomercials rarely rank high in the frequency charts. They do not treat media time as retail space, the way infomercial "entrepreneurs" do, which explains why the Quick N' Brite infomercial airs almost non-stop and the Valvoline half hour merchandise show is rarely seen.
Some infomercial industry observers cite the infrequent airings of corporate infomercials as proof that they are failures, but this smug opinion is short-sighted. Corporations are more likely to take an integrated marketing approach that emphasizes building brand recognition at retail. Oftentimes, they are content if an infomercial is "self-liquidating," meaning that sales derived from the infomercial are enough to cover at least part of the media expenditures. Corporations' retail strategy requires a reach and frequency that infomercials do not always offer.
Although Fortune 500 companies do not produce more than 20 out of the 400 infomercials that air each year, there are companies that are successfully using long form as part of an integrated marketing strategy. Many golf equipment manufacturers are airing half hour programs to show off new products, following the success of Adams Golf, a once-sleepy startup whose infomercial helped its sales rocket skyward. Fantom Technologies, a Canadian maker of vacuum cleaners, is building a brand name alongside such established rivals as Bissell and Hoover. These companies are leveraging the money they spend on infomercial media into retail sales.
There is no question that the infomercial industry is hurting. We have seen several companies go bankrupt or teeter of the verge of bankruptcy in the last year, but we expect that the companies to emerge from the continuing shakeout will be those that develop a more sophisticated and integrated marketing approach.