Hitmetrix - User behavior analytics & recording

Spotlight: Tim O’Leary, CEO, R2C Group

Q: A number of people expected DRTV to flourish this year due to the recession. Is that working out?
A: Typically, DRTV does better in a recession for two reasons: One, rates fall; and two, for some, “comfort” products tend to do significantly better. Initially, DRTV suffered the same way as everything else in the economy. In the September to October timeframe, we still had the same media pricing, but response rates plummeted because people were freaking out about the economy. Later, though — just after the election — the rates fell drastically, and response rates for those comfort products — things like fitness and kitchen products — were back up. People weren’t running out to Saks Fifth Avenue, but they were buying things through DRTV. That has held pretty well for the past six months. Things have leveled out a bit — I wouldn’t say this is the strongest period we’ve ever had for DRTV, but it’s been a good period, and there are surprises all the time.

Q: You’re running a successful DRTV spot for NordicTrack right now. What is it that appeals about a product like this, despite its relatively high price point, in the recession?
A: People are giving up things like their expensive gym membership. If the consumer can say, ‘Hey, I can knock out a big expense here and replace it with this,’ that’s pretty good for them. People want to be sold to more in a recession — they’re not impulsive spenders, but they still buy things. Better salesmanship becomes much more important.

Q: How does the popularity of DRTV ads for products that some might say are gimmicky affect the rest of the industry?
A: It’s easy to get drawn into the very kitschy side of the DRTV biz — everyone wants to talk about Snuggie. But there’s a very big, burgeoning side of the business that’s a much more branded approach toward lead generation and more sophisticated product selling. You design the campaign structurally in a similar fashion [to the more kitschy spots]. Everything we do has a cost per inquiry, a conversion to order, an average order and if it’s a continuity product, a lifetime valuation metric. So, the metrics are quite similar but the presentation is completely different.

Q: What is so different about working with a more corporate brand?
A: A company like KitchenAid has brand standards. We see a lot of companies using DRTV as a retail driving strategy. The tracking technologies we’re employing are getting much more sophisticated. We know everytime we sell a unit on television we know exactly where else they’re selling it. As the Web gets stronger and the retail tracking technologies get stronger, that’s where the DRTV business grows.

Q: What are some of the challenges that go along with this?
A: There’s typically a huge education process that goes on with the corporate marketer. You’re taking them from the 15- to 30-second environment into 60- to 120-second or even five-minute environments. That’s a big leap for them. You also have to show them how the system will work and build those systems. That’s a tremendous amount of back-end work that goes on, and we have a whole back-end department. A sophisticated DR marketer will have that all in place, but a corporate marketer won’t.

Q: How does YouTube affect DRTV?
A: From the big perspective, YouTube falls under a bigger strategy. We know now that a lot of people responding to a DR ad will respond online. So, we want to know how the brand looks online — we do things like peer review management and blog management to make sure that the online experience for the consumer, once they see the ad, is positive toward the brand. A Yoplait yogurt spot we did was popular and all over YouTube, and one of these YouTube shows did a parody of it. That was good, because it spread the song that we commissioned for the spot, and it was very positive. Sometimes it’s not so positive for the brand. Then you have to employ whatever you can to control that. But I don’t care where people look at our work — TV, Internet, mobile, as long as it’s how we intended.

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