by Dan Zifkin, CEO
Those of us in the direct response television business often look at the so-called "conventional" advertising world and wonder what we can do to lure more of these "regular" advertisers to the world of DRTV. Sometimes, some of us hit paydirt and lure one to test an infomercial or a short form, sales-driven spot. We all wish we could get more of them as our clients.
Yet, when I read that these advertisers are looking for better return-on-investment–what everyone calls ROI– for their ad dollars, I'm puzzled. We should be a legitimate part of their spending.
You see, we hired this guy "ROI" a long time ago. Maybe "they" need to meet "him."
I'm prompted to bring this up because of several items that caught my eye recently.
I read a story from the Advertising Research Foundation's recent confab that reported on the work of the "ROI Council"–a committee of sixteen ad agency researchers who conducted a study with Court TV to learn what advertisers are doing to measure the success of their ad campaigns. Nearly half of a group of advertisers studied have introduced measurements other than cost-per-thousand buying to their analyses, and three-quarters of them said there would be a greater emphasis on ROI in their 2005 marketing and media planning. Some key summary findings: "…the chief criteria in ROI evaluations are "impact on sales revenue," "media plan vs. media delivery," "awareness of campaign," and "change in market share….""
Sounds like things DRTV clients have a pretty good handle on.
At another recent panel of media gurus, the age-old discussion centered around which advertising works–you know, the old "I know 50% of my advertising works, I just don't know which half" argument. A typical quote from a panel member: "we are really just at the beginning of the journey in search of ROI." And here's another: "Measurement is at the core of most of our clients' businesses…"the goal is to achieve confidence, and in this climate it's hard." Sure it's hard, but DRTV has some answers. "ROI" works in our business.
Meaningful measures of return-on-advertising investment may be a never-ending struggle for those conventional advertisers, but we in the direct response and infomercial business have been living and dying by that yardstick from day one. If advertisers want more media spending accountability, they should be looking at our part of the marketing world. We in the DRTV business have been in the accountability camp for years. We had to be in order to grow the way we have.
The direct response TV industry is not telling story about the real bottom-line effectiveness of what we do. "ROI" is on our payroll, and we haven't introduced him properly to these conventional advertisers.
We should be taking "ROI" to meetings with these big spenders. But we have to either get past the gatekeepers–the ad agencies–or convince them that we're a legitimate partner with them for these advertisers.
Here's the problem as I see it.
Major advertisers lean heavily on their advertising agencies for leadership on matters such as return-on-advertising investment. Let's admit that this does make sense–on paper, anyway. The fees and commissions that clients pay to ad agencies should be producing not only smart media plans and buys, but also for cutting-edge research and evaluation tools. With more clients moving toward consolidating their media activity at one agency or agency holding company in order to find better efficiencies and supposedly-better ideas and thinking, you'd expect advertisers to be looking at media vehicles that can stand up to ROI analysis. You'd expect that these agents would be looking at every legitimate, sensible, potentially impactful way in which to spend those advertising dollars, persuade prospects to purchase those goods and services, and stand up to meaningful benchmarks of measuring success or failure.
But somehow, our very powerful approach–direct response TV–gets shunted aside and seldom given consideration by these expert agents. How often does major ad agency pushed for the inclusion of an infomercial in one of their clients' media and marketing plans?
Direct response TV should be the gold standard of media return-on-investment analysis for advertisers, but we–as an industry–still have not made that case with many leading marketers. And that's pretty perplexing, given that television remains the mainstay of much of the leading advertisers' spending. The spending levels recently projected by media industry guru, Jack Myers, for the upcoming 2005-2006 so-called "upfront" buying season are estimated at over $18 billion in network TV, network cable, and national syndication, or over 6% more than in the 2004-2005 spending spree. That's a lot of money being spent on thirty second commercials and the new darling of national TV, product placement. And that's a lot of advertising spending in an increasingly-cluttered environment that's been suffering from ad recall declines, more clutter, digital commercial-avoidance tools, and all the channel-switching that goes on.
I'm no researcher, but I'll comfortably predict that the return-on-investment for this TV ad money will only decline once again in the coming year. And I don't think the research gurus will take great issue with me.
Why hasn't the direct response industry made a better case with major advertisers?
In my opinion, the major culprits are these ad agencies–the gatekeepers–that are charged with the stewardship of these billions of dollars in TV and other media. The obsession with the thirty and fifteen-second commercial–and the whiz-bang production work that feeds the TV pipeline–seems to dominate the thinking, despite the questions about their effectiveness. These ad agencies–and big holding company media agencies–spurn conversations with the DR industry because they believe we represent a threat to their client relationships. Our marketplace of short and long form production, the knowledge of what it takes to make viewers take action, how to place media in a different selling arena with its own marketplace and pricing structure, the tools we use to provide instant, ongoing ROI analysis–all of these things are capabilities and expertise we have that these agency powerhouses lack.
I think it's time these agencies realized that the DR business is a legitimate partner, not threat.
The Zephyr Media Group Challenge
We'd like invite both agencies and advertisers to visit with us and get smarter about how we use direct response messaging to not only sell products and services, but to also do things like "impact sales revenue," boost the "awareness of the campaign," and effect a "change in market share." We can tell you how retailers today encourage direct response usage to help drive in-store volume. We can show you ways in which to use DRTV to complement and supplement what you're going to do–and most likely should do–with your existing, traditional in-program TV buys. And we can point out examples of how direct response advertising has served as the original "product placement" vehicle for demonstration.
We're not interested in seeing the billions of TV dollars that will soon be negotiated in the usual bum's rush to market this spring and summer converted to direct response and infomercial advertising. A lot of that spending will go toward awfully good, and–hopefully–very successful brand building and selling efforts. We're pretty sanguine about how we might fit into the overall picture. But we also think we have earned a place at the table.
If measuring return-on-investment and advertising accountability are the hot buttons today in the marketing world, we'd like to get involved in the discussion. We know a few things about that, and we might even have some clues into which half of that "50%" is working, and which is not.
Our guy "ROI" has got some interesting thoughts on the subject he'd love to share with you. When can you meet with "him?"