Philips-Magnavox Revises Successful Ad

Following a DRTV campaign for its WebTV Classic Internet terminal last year, consumer electronics giant Philips-Magnavox launched a revised version of the infomercial to again drive sales of the product.

“We are making them like crazy,” said Kent Perry, marketing manager WebTV, Philips-Magnavox, Atlanta. “We more than doubled capacity. We are pumping them out trying to catch up with demand.”

Demand for the device, which allows people to surf the Internet through a television set, was so strong last year that the company had to stop airing its infomercial to keep up with orders.

Editing about one-third of the infomercial program that had helped debut the product last summer, Philips-Magnavox added testimonials, eliminated offers and drastically dropped the price on the product to $99, from $199.95.

“Not only had we sold every one that we could possibly sell direct, we had stripped the shelves bare at retail,” Perry said. The revised infomercial broke nationally across cable stations June 5, but the company would not disclose how long the current program is expected to air. Philips had introduced WebTV Classic with an infomercial last May and ran a subsequent flight in the fall that ultimately stocked out supplies.

“It is the same but it is refreshed,” Perry said. “It still has the magic it had last year and our initial indicators are that everything is good. There is a lot of life left in this one.”

Despite the shelf life of the revised infomercial, the company is also gearing up to launch another direct to consumer program to support WebTV Plus, the second generation of the WebTV Classic product. The newest iteration, which is expected to launch nationally later in the year, includes a “picture in picture” feature and simultaneous Web access and TV viewing. While demand continues for the classic product, new market opportunities have quickly emerged for WebTV Plus, Perry said.

“Basically classic WebTV is the Internet on your TV. They are two separate and discrete activities,” Perry said. “We are positioning WebTV Plus as an Internet-enhanced television and we are attempting to go out to a broader target market. This product will allow consumers to use TV in new ways.”

WebPlus features a number of modifications including a one gigabyte built-in hard drive and a 56 kilobyte per second modem, versus the Classic's slower 33.6 kilobyte per second modem. Additionally, Web Plus features 8 megabytes of memory, while Classic Web carried 2 megabytes of memory.

Touted as the biggest breakthrough in TV-based Web products, the system features a newly styled keyboard and an infrared eye that allows the receiver box to be concealed for aesthetic purposes.

“It allows us basically to integrate television and Web surfing,” Perry said. “A little icon will indicate there is some content out there on the Internet that relates to a particular show. A viewer will hit the icon to access a site where merchandise is for sale. The WebTV Classic is the Internet on television. WebTV Plus is the integration of the two mediums.”

In the meantime, the new and improved infomercial is helping to expand the Classic WebTV universe from the current base of about 350,000 owners. That figure represents total WebTV subscribers through the two leading WebTV purveyors, Philips and Sony. Sony did not return calls regarding its WebTV marketing plans.

West Teleservices Corp., Omaha, NE, is handling the telemarketing program for the classic WebTV product. The Tyee Group, Portland, OR, handled the production revamp, following its initial creative work last year. Williams Worldwide, Santa Monica, CA, handled the media buy on the campaign.

Perry said while agents are indeed working on up-sell opportunities, Philips is staying clear of cross-selling. “We're up-selling on the accessories but we are not cross-selling,” he said. “We don't want to paralyze the callers [with an overload of offers.]”

For callers who are not committed to purchasing the product direct, agents will forward a brochure with additional product information that contains a “silent coupon” for a $20 discount on accessory purchases.

“The reason we do that is to drive it back to our retail business,” Perry said. “We are good at selling truck loads of product to large retailers. But for us to sell direct and to sell one or two pieces to a consumer is new for us.”

The strategy is not one that retailers necessarily appreciate. “One of the ways we try to get around that is through dealer referrals,” he said. “We have not had one complaint once they saw their sell-through increase.”

Teleservices agents provide callers with a retail referral within a 5-6 mile radius based on the caller's ZIP code which is identified automatically through an in-bound call. Perry said the infomercial generates stronger sales for retailers than for the company's direct efforts at a rate of five to one.

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