CHANNELS OF PROFIT

SPECIAL REPORT
Direct Response Beats Hollywood Every Time
By MaryEllen Tribby
When most people think of television advertising, they think about the commercials they
see on network TV. Such advertising gives the advertiser an immense reach—sometimes
to as many as hundreds of millions of people. But the greater the reach, the less targeted
the audience. For every person who might be interested in your product, there will be a
hundred or a thousand with absolutely zero interest.

If you’re advertising McDonald’s or Coca-Cola, you want this kind of reach. But if your
product is more specialized, the huge expense of TV exposure becomes an exorbitant bet.

For most businesses, television advertising should be a supplemental endeavor restricted

by a limited budget. Focus on smaller audiences, especially targeted ones—TV channels
and programs that concentrate on market niches such as investing, real estate, pets, home
shopping, building wealth, and so on.

With the growth of cable and regional TV, it’s easier to find channels and programs that
cater to the prospects you want to reach. If you spend some time looking at the growth
of targeted and local advertising on these new cable stations, you will understand how
viable this type of market can be.

All these channels need advertising revenue to remain on the air. And because the
industry is bigger and more competitive now, many stations are offering very affordable
rate packages, within easy reach of even small businesses and organizations.

Creating TV advertising isn’t cheap, but it doesn’t have to be Hollywood-expensive

either. Industry watchers say that the average production cost for a 60-second
direct-response TV spot is $30,000. But that average includes big-budget national ads.
Direct-response commercials designed for local and targeted audiences will generally
cost a third to half of that amount.
UNDERSTANDING TV ADVERTISING

Planning is especially essential for the businessperson approaching broadcast advertising

for the first time. When you’re starting out, it’s important to educate yourself about the
medium—and the best way to do that is to talk to a lot of people. This includes advertis-
ing representatives from TV stations, other business owners, and your customers.

But before speaking to anyone, you’ll want to have a basic understanding of how TV
advertising works. Direct-response TV ads come in various formats.

The top three are:

1. Short-form ads that run 15, 30, 60, or 120 seconds. These ads can run
throughout the day and night.

2. “Paid programming”—long-form ads or infomercials that run about a

half-hour. The length gives the marketer more time to demonstrate and
“sell” the product. These usually run late at night or on weekends.

3. Home shopping ads on channels such as the Home Shopping Network

and QVC. These dedicated TV channels run ads 24/7.

In your business, you can use one format or mix them up.

It’s good to know that all these ads, no matter what their length, follow the same formula.
They use repetition to make viewers believe they want the item being advertised. And,
of course, they all follow direct-response principles. They ask the viewer to take action
immediately—usually by calling in to buy the product. And like all direct-marketing
efforts, you’ll know if your ad is working almost immediately after the commercial airs.

PRINCIPLES OF EFFECTIVE TELEVISION ADVERTISING

The principles that apply to television are fundamentally the same as those that apply
to other media. Good television commercials should be…

 Arresting: If you don’t catch your viewers’ attention, there’s no way you
can sell them anything.

 Direct: The purpose is to sell your product. To do that effectively, you must
show the product, promote its benefits, and provide a good reason to buy it.
  Benefit oriented: Mention the features of the product when needed. Always
stress the benefits, especially the Unique Selling Proposition or USP.

 Consistent: The quality of the commercial’s production should reflect

the quality of the product itself.

 Compelling throughout: Grabbing attention in the beginning is crucial.

Letting that interest flag later on is unforgivable.

 Intentional: Ultimately, the commercial must sell something. Be sure

a purchase is at least implied.

To ensure that you get the biggest bang for your buck, make sure you can answer
“yes” to these three vital questions about your product from Entrepreneur.com:

The 1, 2, 3, Formula

1. Can its benefits be demonstrated? Without demonstration, you can’t use

TV effectively to make a sale. Think about the kinds of products you see
in direct-response spots, such as a hair-braiding tool, a children’s paint kit,
or a “revolutionary” car finish. They lend themselves to effective visual
presentation.

2. Does it have mass appeal? When you select your target audience, there
should be a high probability that the majority of those people can use your
product. Whether you’re buying time on cable systems or individual stations,
you can save money by purchasing “broad rotators,” which means your spots
may run anytime during the entire day, and not only within specific,
higher-rated shows.

3. Is it unique or novel? It’s best if your product is novel enough that there’s
little competition for it on the retail level. In fact, once a product is widely
available in retail stores, direct-response TV spots stop working.
What Works

For successful direct-response TV spots, follow these important guidelines, also from
Entrepreneur.com:

Create 60-second spots for direct sales. While 30-second spots are the norm
for most TV advertising, their primary function is lead generation. If that is
what your advertising model calls for, use 30-second spots. But if you want
to sell directly to viewers, then favor 60-second spots in your testing.

A visible call to action. Experts say you should have your toll- free number,
and possibly your Web address, onscreen for at least 40 seconds. Some
advertisers display this information throughout their spots.

Test the magic number: $19.95. According to several TV advertising

gurus, $19.95 is the most successful price point for direct-response TV
ads. But our experience has shown us that all sorts of offers (prices, terms,
guarantees, etc.) can work on TV. Start with $19.95 and test “away from”
that number until you find the offer that works best for your product.
For expensive products, you should definitely test long-form ads.
(The 30- minute infomercial is the standard.)

MAKING A GREAT COMMERCIAL

Experts say that viewers pay attention to TV marketing in the following order: graphics,
headlines, bullets, and text. The headline must be the strong opening to a simple and clear
message that stresses benefits. This all has to be done visually. Show rather than tell —
and don’t forget that call to action. Television has made the phrase “Call today!” a
popular call to action in all advertising.

Remember, a TV commercial has only a few seconds to grab a viewer’s attention. Wise
advertisers do that with interesting headlines and marketing messages, supporting those
messages with graphics and visuals.
That may sound simple. But the logistics of direct-response TV advertising are somewhat
complicated. Lots of issues need to be handled by lots of different people. Some
examples are:

 Concept development—The style and format of the commercial.

 Marketing plans — The goals you have for the ad (the number of sales)
and how it fits into your overall multichannel campaign.

 Creative—The scripts and marketing messages of your ad. Experienced

direct-response copywriters should write these, preferably with experience
in writing for TV.

 Production—The actual creation of the ad in the studio with cameras,

lights, microphones, sets, and so on. This includes post-production work
(graphics and editing).

 Media buying — Buying airtime on TV stations. You should do your due

diligence to find out which stations and times work best for your product.
Of course, you have to balance that with what you can afford.

 Telemarketing and fulfillment management—Most direct-response TV

features an 800 number for customers to call. This usually means hiring
a professional telemarketing company. You may also need to contact
a fulfillment house to fill your orders.

When beginning, it’s a good idea to hire competent service companies to do the
production and placement, as well as other technical tasks you aren’t already doing
yourself. For instance, if you haven’t incorporated telemarketing into your marketing
mix, the details involved in setting up your own toll-free number may be enough
to convince you to stay away from the rest of the process.

DIRECT TV AND YOU

TV may be the perfect venue for selling kitchen gadgets, other time- and effort-saving
devices, wealth-building programs, motivational programs, and real estate programs.
It’s also great for exercise machines and DVDs, as well as offbeat recreational products.
These are all examples of what probably comes to mind when you think of TV-based
direct marketing. But you can potentially sell any product this way.
TV marketing is visual—you can see the product in action. And this means that the desire
to buy is instantly strong in your prospect. The ease of ordering (all you have to do is
pick up the phone), as well as a money-back guarantee, further breaks down the
prospect’s resistance.

If you take the time to understand how it works, it can be a vital component of your
multichannel campaign. Indeed, it has the potential to bring in more money to your
business than any other channel.

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