Old School DRTV vs. New School DRTV: How DRTV Affects Other Channels

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Most advertisers appreciate they are playing in a multichannel world, yet there are still many advertisers that haven't figured it out. The bottom-line is you need to adopt a multichannel strategy to succeed in new-school DRTV.

To place things in context let's break multichannel into two basic components: direct marketing and product ordering.

In DRTV multichannel marketing, direct marketing is facilitated by including a phone number and a URL, and even a branded search term. In other channels this is facilitated by offering an invitation to visit a retailer, and can be presented to consumer on the Web, by e-mail, on the radio, in direct mail, in a catalog and via inbound and outbound telemarketing.

Product ordering on the other hand takes place on the phone, on the Web, at retail and to a lesser extent in the mail.

Clearly, the Web has the most impact on multichannel marketing today. Originally the Web tended to be simply an ordering venue for customers who are stimulated to buy through another medium. But today it is becoming a primary destination to learn, research and buy.

Overall evidence is demonstrating that consumers who respond to multichannel marketing are inherently different from single-channel customers: They tend to be more upscale and affluent, are less price sensitive, easier to maintain and they buy more often.

Also, consumers who purchase from two or more channels spend more per year than single-channel shoppers and tend to be our very best customers. In recent studies, big box retailers determined that consumers who bought both at retail and off the Web spent virtually twice as much as those who made purchases via one of those two channels.

Next we know there are multiple ways to categorize our distribution channels. I like to think in simple terms and put everything into two groups, direct and indirect (a.k.a. retail). DRTV can lift both these channels.

Direct channels are what the old school called mail order. It has been a long time since people ordered by mail. Today ordering is largely phone and Internet. But fulfillment is still by USPS, UPS and FedEx.

DRTV makes people aware of your product and teaches them about the category and your product specifically while positioning you as the preferred, or exclusive, supplier.

Pure direct marketers make each direct channel, and usually each campaign, justify itself on an ROI basis. Old schoolers know that DR radio often works better when DRTV is also running, even though it is usually tracked and justified on a stand-alone basis.

Likewise, DRTV in some cases has been shown to provide lift for products sold in print ad, inserts, direct mail and catalogs, just as long-form infomercials and short-form DRTV spots together can produce more than they can individually.

Indirect channel also gets a big boost from DRTV. In fact, "As Seen on TV" has become a household word as introducing products on TV and flipping to retail has become an established strategy in our industry.

Over the years we have seen the time accelerate for migrating from direct into retail, as retailers want the benefit of the awareness and demand created by DRTV sooner than later. However, expecting a retail win-fall can be taken to the extreme.

Now we come to the Internet, and search in particular. E-commerce is the new bridge between the direct channels and the indirect channels.

E-commerce is a more complex picture because many direct marketers use the Web to replace the phone and operators rather than as the primary media to stimulate the order.

For most clients, we use an alternate URL with the source code as a prefix to track orders from DRTV. We typically see 30 percent to 75 percent of responses come via the Internet and the balance by phone. Combining these two for accurate source reporting is critical. Failure to do so can make a profitable DRTV spot appear to be a loser.

In addition to direct online responses that we can track, we generally see DRTV produce lift to the homepage traffic and we definitely see increased branded keyword searches. Both of these should be benchmarked prior to your DRTV campaign. That way you can quantitatively see any changes and ascribe the portion you choose to DRTV. We have seen a modest DRTV campaign produce a 2,000 percent increase in branded keyword searches and corresponding click through.

For multichannel marketers search plays an important role in allowing consumers to buy from their preferred channel. It also enables consumers to easily arbitrage your channels shopping for the best deal.

Here is a quick list to improve multichannel sales:

1. Always think multiple channels when developing customer acquisition strategies

2. Apply cross-selling techniques to generate additional transactions

3. Use the Web to reduce transaction costs whenever you can

4. Find out the percentage of your customers are multichannel. Determine their annual purchases compared with your single-channel customers. Then, develop strategies to direct your single-channel customers to multichannel opportunities. And, think outside of the box.

5. Tracking everything is mandatory, especially separate activity coming from other channels than the Web. Don't give search engine activity a free pass when DRTV advertising drives it.

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