NBC Plans Summer Retail Push on Video Specials
The DRTV campaigns are part of a larger effort to find additional revenue streams from transactional programming and merchandising efforts, especially as the major networks lose viewership to cable channels <I>(please see related story this page).<I>
The "Merlin" campaign, which offered two videos and an exclusive copy of the script for $29.95 drew in excess of 100,000 orders. Although NBC declined to disclose detailed sales figures, its video sales from the 30-second spot exceeded its advertising rates for the program by two to three times.
The "Merlin" campaign marked the first time the network aired a hard-selling spot with a call to action. Although it has aired spots with an 800 number for previous specials, those spots were considered "announcements," not hard sells.
"In the past, we've had small announcements that really just had an offer with a telephone number and consumers had the opportunity just to call in, but this is the first time we've actually marketed the product," said Elisabeth Sami, vice president of business development at NBC. "We certainly see the difference between just throwing up an 800 number and allowing anybody who's interested to call and order, and actually selling it in a direct marketing style."
Although the network is in the early stages of developing a strategy to merchandise videos and related products from a DRTV campaign all the way to the retail shelf, its success with the "Merlin" promotion has prompted NBC to look for other programs that present strong merchandising potential.
"We've been looking at products where there's a really loyal audience and we think we can create a sense of urgency in driving viewers to purchase products," Sami said. "We're going to have exclusive direct response sell periods, but will then move into broad retail."
In order to create a sense of urgency among viewers, its DRTV promos will include an exclusive offer, such as an original script, additional videos or other items. While NBC recognizes that viewers can easily tape desirable programs instead of ordering them directly, a package of high quality videotapes with a bonus item would differentiate its offer.
Its "Saturday Night Live" videos are differentiated from the broadcast show in that they include sketches compiled around a particular theme or show host. It offers a "Tribute to Chris Farley" which memorializes the actor who died of a drug-related heart attack in December. The offer included an up-sell for a videotape of "Seinfeld." West Teleservices Corp., Omaha, NE, and Matrixx Marketing, Ogden, UT, handled NBC's inbound telemarketing. It declined to disclose its fulfillment vendor.
"One thing I definitely want to make clear is that we're not planning on doing this with every program that NBC has," Sami said. "There's a very specific offer that we feel we have to be making, that will allow the consumer will that they are getting something special and of value."
It test-markets some offers on NBC America West, a cable satellite channel that is picked up by dish owners, but does not test offers on CNBC, its cable news and business channel that carries a profusion of DRTV spots.
subhed: Brands and Relationships
While NBC's move into direct marketing is unusual for a major network, it is an area that has been pioneered by the DRTV industry, particularly the Home Shopping Channel and QVC, whose primary business is direct selling of merchandise. The shopping channels capture the names and addresses of their buyers, database them and follow up with catalogs and other direct marketing efforts to maintain a coveted relationship with a core audience.
Among cable networks, the Food Network began marketing videos in February of "The Two Fat Ladies," one of its popular cooking programs and is ramping up plans to license its brand on cooking-related merchandise. The network maintains a Web site that allows for online purchases of cookbooks, specialty foods and cookware.
The challenge for networks will be to balance the needs of advertisers who seek an audience and their own need for potential revenue streams from the direct marketing of their owned branded or licensed products.
"If you develop a loyalty and relationship with your audience, it's really important that you maintain that and make people feel that they've gotten something worthwhile," Sami said. "We've spent time looking at how we can develop spots that retain all of the essential elements to direct response marketing, whether it be that exclusivity or a price makes sense, and yet at the same time, we're keeping the brand of the content itself. We've got the NBC name to upkeep."