What I have always loved about the direct response industry is the quirky, unabashed boldness of its entrepreneurs. Entrepreneurs are a breed apart.
They created direct response television, built it, risked their money, at times succeeded and at other times failed.
We should be grateful to them. Instead, they are threatened from within their own industry by an influx of Fortune 1000 advertisers that are driving up media rates.
Though mainstream corporate America brings respectability and revenue to our industry, it also has hurt those who have been our mainstay – the entrepreneurs.
I remember when the first Electronic Retailing Association meeting was held in Washington. The organization was called the National Infomercial Marketing Association then, and 125 people were in attendance. We worked together to make our industry, and the individuals in it, successful. Those entrepreneurs then, and those that have stuck with the industry since, are what DRTV was founded on. This is why we still have no traditional agencies dominating the business. It is why we run our businesses by our own rules that go against traditional doctrine.
With corporate America entering our foray, greed has set in among our members. Some have abandoned the roots of our industry and now enlist the Fortune 1000s to advertise with infomercials and short-form spots. Why? Because corporate America’s executives do not comprehend a $100,000 production budget – they must have a $500,000 budget. They do not understand a $15,000 media test – they must have a $500,000 test – or better yet, a $1 million test. Likewise, they have no understanding of a cost per order. And our very own DRTV agencies also ignore the CPO because they know that CPOs limit spending levels. Lately, these spots aren’t even tracking responses with a toll-free number.
With the rush to woo and sign corporate clients, how many of them stay around? These corporations are not long-term DRTV players. They are here for a quick hit and run. Big money testing hurts all of us. Maybe not in the short term, but in the bigger picture we are killing off the rare breed that made us – those that depend on profitable CPOs. It’s the DRTV entrepreneurs and small companies, our constant team players, that have to live with the soaring production budgets and media rates that are climbing to unprofitable levels.
Our company has spent the past two years working on a correction in the market – negotiating rates back to a realistic and profitable level for our clients. But then look what happens. Another corporation comes in and happily pays top dollar for airtime.
Has the infomercial for Wal-Mart really helped this cause? Or any other corporate infomercials for that matter? I have heard countless times how these short-term players are overcharged for media. Everyone has heard the stories of being bumped out of certain time periods by the big spenders. I know firsthand. Our company was bumped from a $2,500 time period not by a double, triple or even quadruple rate, but by five times what we were paying! I only hope this well-known, long-distance company paid out, or at least got its money’s worth, because I know the agency handling them made a bundle.
Some DRTV media buyers bemoan that media rates have risen out of control, but what do they do about it? Nothing. They forget the partners they have been dancing with for the past 20 years and pursue new, wealthier dance mates. No longer is the entrepreneurial tango good enough. Gluttony makes them learn the Madison Avenue waltz.
Our industry’s own trade group and publications have helped perpetuate this dance. They have helped put DRTV entrepreneurs on the endangered species list by providing hype and coverage of Fortune 1000 companies entering DRTV. When one of our own pioneers records record growth, produces a winning show or has simply found a way to thrive in this ever-changing business environment, it’s back-page news.
Why should we care? Because if this trend continues, we will create false demands for media, thereby rocketing rates out of sight for the wrong reasons. We can expect to force out of business those companies and entrepreneurs that made our industry, our bread-and-butter accounts. I’m not saying we should abandon corporate clients, but let’s not forget what brought us here. Remember who built this industry. Stay with them. Work with them. And as clients, pursue those of us who maintain your entrepreneurial spirit and philosophy. Save the DRTV entrepreneurs.
