Marketers Plan to Stick With Winning Formulas
The hit infomercial for "Tae Bo," the martial arts video workout, is expected to continue to sell well, although it will face competition from copycat products.
"You are going to see knock-offs of Tae Bo, with other martial arts exercise videos, because everybody is trying to find the product that's going to be a big hit," said Paul Clements, vice president of sales for American Television Time, Austin, TX. "We have a back massager that has had a high degree of success, and what I think you are going to find is that non-traditional products which would normally be on television will be one-hit wonders."
The kitchen gadget category is also expected to be strong for DRTV in 1999.
"Kitchen gadgets will always do well if the category can maintain its current price point," said Frank Cannella Jr., president of Cannella Response Television Inc., Burlington, WI. "The spinning chopper is a great example of a hot product. I also think the entire category of video products will do OK if they are sold in the $15 to $20 range. Both categories are good for the impulse buyer."
This year will also include comebacks for many products, including the Banjo Fishing System, which Cannella said will perform as well as it did previously. He also said exercise equipment will return to popularity.
"Exercise equipment will be able to sustain a price point between $500 and $600," Cannella said.
Fortune 1000 Infomercials
While most corporate DRTV dollars are found in short form spots, several major companies, including Hewlett-Packard, Hanes and Tupperware, put money into infomercial projects. It is possible more Fortune 1000 companies will advertise through infomercials this year, although corporate bureaucracy is a stumbling block.
"The problem with corporations is that there are many layers that advertising executives have to go through to make a decision to commit to DRTV," he said. "If these corporations look at the success rate of infomercials they will see that it can be a very lucrative form of advertising."
According to Clements, most people believe the success rates are much lower than they actually are.
"I sit on the Electronic Retailers Association Committee, and at one meeting the subject of success rates came up. People were saying only one of every 20 infomercials tested were actually making it to roll-out, one person even said one of every 30, so I did my own research," he said.
After researching the success rate of infomercials in his company's database, Clements discovered that one of every two-and-a half infomercials tested in 1998 rolled out.
"What I found was that we were well below what they were saying was the industry average," he said. "They were throwing out these numbers and did not do any research. This would attract corporations to DRTV."
He added that consumer electronics and health and beauty aids will be popular items this year, and among these may be products from major corporations. He did say that dietary supplements will not make a strong impact in DRTV.
"The new FTC regulations will keep people more in line, but a lot of TV stations won't take shows that advertise an ingestable product," said Clements.
Expect pharmaceutical companies to allocate more of their direct-to-consumer advertising budgets to DRTV campaigns, but traditional advertising methods will still dominate. Lowe and Direct, a New York advertising agency, is preparing to roll out DRTV campaigns for two new flu medications this year.
"The smart companies will get into DRTV early in their campaigns," said Jim Sandino, managing director of Lowe and Direct. "Pharmaceuticals should be a hot item this year, but DRTV advertising depends on who the advertising agencies are for the companies. By and large, many advertising agencies for pharmaceuticals are relying on traditional media and not direct response."
The new year will not see many changes at the shopping channels. ValueVision, which is coming off a very successful quarter, will continue to carry its jewelry and gemstone products, along with electronics and leather clothing.
"We will have biomagnetic and skin care items as well," said Stuart Romensko, vice president of finance and CFO of ValueVision. "We will continue to test new shows and we always look at new products."
QVC will feature traditional electronics but will also sell travel navigation systems such as those installed in cars or used by hikers. It will also have kitchen shows and other home products.
One producer of DRTV spots was reluctant to predict which products will be successful this year.
"I have always said that you can get 12 experts who sit around the table and tell you what is going to work and what isn't, and they won't agree," said Arthur D. Schiff, president of Direct Response Associates Inc., Sunrise, FL. "Anybody that tells you what will work is a real neophyte in this industry because you never know what is going to work until you put up a product and test it. I don't believe in focus groups either because they never ask them the most important question, which is will you open your wallet and pay $200 for an item right now. I don't know why they don't ask that but they should." n