DRTV Advertising Arm Media

Direct Response Advertising Industry Report

DRTV Advertising Report

What was the most significant accomplishment in the past year for the UK’s DR industry?

Unlike typical Brand advertising, DRTV will always deliver a measurable & accountable return on investment and the almost immediate results continue to provide marketers with real day-to-day numbers, feedback that helps determine whether their campaign is on track or if it needs adjustment.

In the past DRTV was often seen as the poor relation of traditional high budget Brand advertising but in the past 5 years the increased use of the internet by consumers has narrowed the gap. This has recently led to the creation of a new low cost genre of TV advertising called BRTV (Brand Response TV).

These are 30-second spots that promote a URL to drive viewers with Laptops, tablets or smartphones to visit a website and make an immediate purchase. With BRTV the focus is less on name recall and more about driving online traffic. This type of ad qualifies as “direct response” and allows the clients’ media agency to purchase airtime that can cost as much as 50% less than fixed-position brand inventory in which a guaranteed TV audience level is purchased. With BRTV there is usually a more effective viewer engagement via the advertiser’s website and this more than makes up the difference in spend levels. Additionally, the airtime discount minimizes risk and allows first time advertisers to safely test TV.

At ARM Direct our experience is that a hefty 20% of additional online response is generated within 10 minutes of a well-made BRTV spot being transmitted. Nielsen research tells us that some 60% of television viewers watch the box and surf the internet simultaneously and we find that the multi-tasking 18-35yr age group react positively to BRTV ads – especially if these are highly creative and slightly edgy. Younger viewers especially are happy to immediately visit a BRTV advertiser’s website and just as importantly share what they’ve found with their friends on Facebook & Twitter. Results are even more powerful when the BRTV ad offers a free sample or special discount.

We’re on a mission to make BRTV more affordable in the UK and one of our recent successes has been to help a dynamic young online company to significantly grow sales of their hero brand.

What do you believe the hottest topic will be in the coming 12 months?

The hottest topic in the UK continues to be the way major fashion and cosmetic brands have finally woken up to the power of BRTV and how smaller companies are now adding TV to their marketing mix. ARM Direct is focused on helping several young consumer brands test TV and one of the most successful continues to be Barry M (the UK’s most successful teenage cosmetic brand) who by switching to a BRTV style creative has persuaded huge numbers of young British girls to tweet, go online and join their fun Facebook page or visit their local stockist. The result has been a substantial uplift in retail sales and Barry M have succeeded in taking market share away from the much larger cosmetic brands who at very considerable cost have used fashionistas like Kate Moss and Georgia Jagger (the glamorous daughter of Rolling Stone Mick Jagger) in their TV ads. On the flip side we’ve made highly successful BRTV ads for under £8,500 and the results to the client’s ROI have been really dramatic, in one case increasing retail sales by over 800%.

How can you better reach out to brands who are looking to integrate DR, digital and data-driven efforts within their overall marketing plans?

In the UK we’ve succeeded in doing this by offering more clients the opportunity to test VoD (Video on Demand). Whilst not exactly new, the first commercial service was launched in Hong Kong in the early 1990s, the great advantage of VoD is that substantial numbers of UK smartphone & tablet owners are now choosing to download their favourite TV programs and then view them later. Some years ago Channel 4 claimed a “world first” to make the bulk of its schedule available on demand and the majority of their 18-35yr old consumers are now choosing to watch time-shifted programs. This gives brand advertisers a unique opportunity to test in the DR zone and be able to closely target their ads to viewers’ program choices.

What are the three biggest no-no’s for a marketer using a measurable, multichannel strategy?

We have seen several well-known DR clients switch to an online only strategy as the internet can deliver lower CpRs. In some cases the making of the DRTV ads has also been given to the online agency as a way of further savings costs. We believe this is a short sighted tactic as we have many years of experience using DRTV to generate new leads (or immediate sales). Once the DRTV ad is switched off the advertiser loses the positive “halo” effect that a regular television presence produces. This has been especially evident in the debt management and claims compensation sectors where once there were over 35 DRTV advertisers on UK TV channels in 2013 there are less than 10.

Our experience is that a migration to strictly online marketing will hurt a DR advertiser in the long term and we believe it is best to keep a wider consumer presence by using a combination of DRTV spots or VoD or Infomercials in addition to ongoing social media activities.

In addition, other no-no’s for me are when I find a DR advertiser appointing a media buying agency that:

  • Is tied to TV station deals instead of buying avails on a client by client basis
  • Does not have a deep understanding of what makes a DRTV ad work harder
  • Has no online PPC expertise in-house
  • Cannot offer bespoke campaign tracking & analysis reports
How is the UK economy treating marketers in the DR business and what effect is the current economy having on campaign success rates?

British consumers are now devoting almost half (47%) of their waking hours watching TV and using their smartphones and tablets according to the UK broadcast communications regulator Ofcom. The accepted wisdom is whilst these same consumers may be spending less at retail the dedicated TV viewing remains a central part of their lives throughout the day.

How has technology changed the way your company does business in the past 12 months?

In the UK we recognized several years ago that the best way to help our DR clients keep ahead of their competitors was for ARM Direct to analyse response data to help maximise campaign effectiveness.

Ofcom reports that smartphones in the UK are increasingly being used for multi-media, but live TV still remains the main entertainment within the home. Younger people have shown the biggest changes in how they use media – particularly using different media at the same time. But the divide between younger and older people’s use of technology is starting to narrow as more middle aged people (40+) are watching home shopping channels looking for a bargain purchase or getting online and finding this is so much easier than ordering from the traditional print catalogue.

How are media rates affecting DR marketers?

The UK economy has climbed out of recession and retail sales in 2013 are definitely showing the green shoots of steady growth. The DRTV advertiser is benefitting from this especially if they have a good direct to retail presence. Many TV channels are lowering their rates as they continue to be challenged by brand advertisers switching their spend to online only strategies.

This means some savvy DRTV advertisers are now paying less for 60sec & 120sec spots than 4 years ago and if they have the budgets will be able to substantially increase their OTS (opportunities to sell).

The direct-to-retail game plan now seems to be a must for every DR campaign that hits television. What are the three most important things a marketer must do to have the right retail plan in place?

In the UK getting your product into retail is all about who you know and managing those relationships well. JML is the stand-out DR company in the UK and their video-in-retail locations set them apart from everyone else. If you walk into almost any major high street store in the UK the chances are that you will see one of JML’s ubiquitous demonstration screens somewhere in the store. To put that into perspective JML has 7,000 of these video screens located in 3,500 stores across the UK. By thinking “outside the box” JML is now the UK’s DR leader by a substantial margin.

Newcomers from the USA will find the European market (now 28 member countries until the UK’s BREXIT vote) very confusing so my advice is to concentrate your efforts on the UK and link up with an established media buying agency with many years of DR experience as they should be able to help with introductions to the best retail opportunities.

The three most important things a DR marketer must do in 2013 is have a great customer relationship management system so that you know who they are, how often they shop online, what they like and when they last visited your website as the consumer wants to buy on-trend products at great values. Next make sure you capture relevant data about your customers when they visit your website by offering them a newsletter or coupon to encourage their next purchase online or to visit a particular retailer where your products are on sale. Finally, according to a survey by Appelerator IDC, 93% of mobile developed anticipate that it is “likely to very likely” that most retail companies will have enabled mobile commerce in 2013 as consumers increasing reach for their phones and tablets even while shopping in a physical store. So make sure that you are looking at ways to engage with your customers via social media. Don’t delay this part just start doing it and give your customers more opportunities to buy and tell their friends about your wonderful products.

What are the three biggest effects the growth of social media is having on the DR marketplace?

Yes, Twitter usage can be awesome! In fact, so is Facebook, YouTube, Google+, Pinterest and many other social media platforms. Twitter in the UK currently has circa 24 million UK accounts followed next by Spain with 8 million (by comparison there are circa 108million twitter accounts in the USA).

Every DR business should include a social media strategy to attract potential buyers or increase product/service interest. Recent DR research by ARM Direct confirms that media savvy UK consumers (after seeing your DRTV ad) will key in the URL and check out what you have to say on your website then next open your Facebook page to see what others are saying about you.

We’ve been especially successful combining VoD + Twitter + Facebook on campaigns for the 18-35yr old demographic, however, for the 50+ sector a much more subtle approach is needed as print is still very important.

In the UK research suggests that the majority of DR companies are still not committing sufficient budget to social media which is like saying “it’s important but can we just leave that until after the product/service has started selling using our normal channels like DRTV and Infomercials?” We believe strongly that mature DR marketers need to hire CRM professionals to take care of this side of their business and not just concentrate on short term sales.

Has the influence of mobile marketing on the industry grown in the past 12 months and how will the expansion of mobile affect DR?

The number of UK smartphone users continues to grow rapidly with 57% of the UK population now using a smartphone or tablet.

  • 37 per cent of adults and 60 per cent of teens are ‘highly addicted’ to them
  • Smartphones & tablets are definitely affecting consumer purchasing behaviour

In the UK shopping on a tablet is more popular than from a smartphone with 66% of tablet owners admitting to having made a purchase from their device during 2012. More interesting is that research has shown that tablet online shoppers have tended to purchase multiple products with a higher price tag.

What does this mean to the DR marketer? Despite increasing use of the internet and an explosion in the choice of mobile devices available to access media and communications, regular TV still remains the UK’s most watched media and viewing figures actually increased between 2000 and 2012, with the average UK viewer now watching nearly 5 hours every day!

Given the current state of the DR industry, what would you change to ensure its continued health and growth?

In the UK it would be to embrace a multi-media strategy from day one. The world is changing fast and younger consumers of today are quickly abandoning the buying habits of their parents so the
future spoils will go to those more savvy DR companies at the forefront of the media usage revolution.

Media multi-tasking – where, for example, someone makes a phone call while surfing the internet – now accounts for one fifth (20%) of all UK media consumed throughout the day and the younger the person, the more this happens.

Surfing the internet via mobile phones is the fastest growing UK media – DR marketers who ignore this trend will be left behind as the UK economy continues to improve year-on-year.

Now let’s talk about what we can do for you!
Call Digby Orsmond or Shane Murphy on +44 (0)20 7224 3040
or email info@arm-direct.co.uk

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