Attacks Prompt Delays in DRTV Launches
Response rates dipped sharply immediately after the terrorist attacks on the United States and have yet to recover fully, but in some cases unexpected consequences of the disaster have led to improved response. Per-inquiry advertisers, whose spots run only when stations have free airtime, found their ads bumped up to premier time slots as marketers pulled paid ads in reaction to the attacks.
Business came to a standstill immediately after news broke of the terrorist strikes in New York and Washington. Response rates for DRTV ads climbed to 50 percent to 60 percent of normal for most marketers in the days following the attacks, said Elissa Myers, president of the Electronic Retailers Association. Now most ERA members report response rates of 80 percent to 90 percent of normal, Myers said.
Industry experts speculated that DRTV marketing and other direct media may perform better than other sales channels following the disaster because fears about travel may make shopping at home appealing.
"People will stay at home," said Ron Perlstein, executive producer and president of Concept Media, Boca Raton, FL. "This is where we feel safe."
Many DRTV advertisers were hit hard by the sudden drop in response rates, said Steve Howard, executive vice president of marketing for Direct Response Media, Wayne, PA. National cable channels generally kept to their advertising schedules and aired spots through the unfolding events, and marketers saw cost-per-lead and cost-per-order rates suffer throughout the day of the attacks.
"It was an urgent concern," he said. "Our clients were concerned because television is such a measurable entity now that it became immediately apparent that response rates were being significantly reduced."
However, Howard said his clients did not panic and realized the gravity of the situation. Overall, DRTV's future looks solid, he said. A strong third quarter bolstered most marketers against the unexpected drop in response. A steep decline in ad rates coupled with greater availability of quality airtime portends an excellent fourth quarter.
Television channels recognize the difficulties advertisers are experiencing and are offering good deals, including bonus spots in some cases, Howard said.
"They recognize there's a crisis," Howard said of television channels. "They're responding well to keep response rates up."
Most cable channels, outside of dedicated news channels, are normalizing their schedules but face a backlog of ad spots, Perlstein said.
Perlstein said most of his clients with active campaigns are letting them run their course. However, many are canceling planned product launches with no indication of rescheduling.
The type of product being launched often affects the decision, Perlstein said. One client, a marketer of home-security devices, decided to proceed with a product launch, while another, marketing a massage device, canceled the launch indefinitely.
"We're not sure if that means two weeks or perhaps even up to the first quarter," he said. "There's a lot of uncertainty in the market right now, and uncertainty about how consumers are going to perceive this terrible disaster."
DRTV marketers are seeking ways to use their industry's strengths to help with disaster relief. The ERA set up a fund for member companies to provide cash donations, and the association is considering developing a direct response ad to benefit disaster relief organizations.
While the Direct Marketing Association and others are calling for a ban on outbound fundraising cold calls, the ERA sees opportunities for direct response marketers to raise funds on inbound calls. Several firms have expressed interest in joining an ERA campaign to offer donations to the Red Cross as upsells during inbound sales calls.
"Our members have enormous daily contact with the American public," Myers said. "We're looking for ways to leverage that."