The age-old guideline for making money in financial markets is: buy low, sell high.
The direct response industry has evolved a contemporary guideline for saving advertisers millions of dollars in media: roll out profitable commercials only.
While the “buy low, sell high” maxim needs no amplification, our guideline for commercials is certain to raise questions among traditional advertisers. Is it feasible? Don't we have to launch the campaign to determine if it works? How do you measure a commercial's potential in advance?
Image and awareness television advertisers spend hundreds of thousands – and often millions — of dollars to run national and local spots of questionable efficacy. Even after costly campaigns that run for months, it may be difficult to evaluate the commercial's influence on consumers or its impact on sales.
But it takes very few media dollars and very little time to determine the success or failure of an infomercial. Through media testing it is possible to know in advance if your infomercial will work, where and when it will be effective and what adjustments might be needed in the message. Before committing to a million-dollar media roll out, consider budgeting $30,000 to $50,000 for a 10- to 14-day test.
subhed: Blanket the Country
Your test should cover a fairly even number of markets in each region: East, South, Midwest, West and U.S.-Canadian border. Select a market and an alternate in each region in case such unrelated factors as weather or transmission problems affect your test.
It's best to buy a spread of all dayparts, but you should be guided by the nature of your product, your marketing strategy, target demographics and available time slots. Generally, about half your test time slots will be daytime on weekends.
You also will need a mix of cable networks and broadcast stations – perhaps two to four national cable networks and six to twelve local broadcast stations. In the latter category, strike a balance between independent stations and network affiliates. Because time is less expensive on independent stations, infomercials need to generate fewer sales before they prove profitable. But that does not mean they will be successful on more expensive affiliate stations or cable networks. You need a balanced mix to avoid skewed results.
If your tests cover a wide geographic area, all time periods, and affiliates, indies and cable, and your findings are consistently positive across the board, that's a sure-fire signal of a successful infomercial.
subhed: Variables to Consider
Where there are variables, however, you must analyze the results to determine the cause: Are there specific time periods that are working better? Are there given stations that are weaker than others? Does the product appeal more to one geographic region than another? Does the commercial have a characteristic that may be a problem for some viewers?
On the other hand, if results are only marginal, you must determine why the infomercial isn't working: Where is it working? Look for the trends. Is it U.S. broadcast that isn't working or cable? Is it daytime showings that are successful or late night? The array of possibilities demonstrate the reason it is so critical to test evenly across the board, across the media, across the country.
Check the telemarketing report. If your call to order conversion ratio is low, that
indicates a problem with the infomercial. Perhaps a component of the program isn't clear.
Also check the data recorded for those callers. Are they asking for more details? Have they been misinformed? Are they prank calls?
Normally, if you have a good product and the infomercial has done a good job explaining what the product is, what it does and what the offer is, then your inquiry calls should be under 30 percent. If your inquiry calls are between 30 percent and 50 percent, it is considered marginal but may still prove profitable.
Subhed: Increasing Response
There are several things you can do to an infomercial to increase the response and impel orders — everything from re-shooting with a whole new creative to simply changing the length of time the toll-free number is displayed.
A friend once sent me an infomercial — produced by another agency – which generated a 70 per cent inquiry rate of viewers who called but did not order. I quickly saw the problem: The 800- number came up before the offer was described to the audience. When the neophyte agency made the simple change, the inquiry rate was cut in half and the number of orders doubled.
Not all problems are as easy to solve. But an effective media test will detect such problems and allow you to improve your infomercial. And, as a practitioner of DRTV, you'll save millions, rolling out only those commercials proven to work.[tagline]
Timothy Hawthorne is chairman and executive creative director of Hawthorne Direct, a DRTV agency in Fairfield, IA.