News Articles

Direct Response: Wait, There's More

7/21/2006 08:00:00 PM Eastern

Advertisers who may have neglected direct-response TV (DRTV) are now using it to not only generate interest in their products and services but also to promote viewer engagement—all at a fraction of the cost of “traditional” TV.

The Internet has breathed new life into direct response, making it more appealing to even the biggest national brands.

Advertisers like Procter & Gamble, American Express and Home Depot have been using DRTV to achieve multiple objectives. And its usage is growing rapidly. Companies that track TV spots and spending aren't able to accurately identify spots placed on a direct-response basis. However, according to the Direct Marketing Association, DRTV expenditures rose 6.4% from 2004 to 2005, reaching $21.5 billion.

Particularly interesting is the growth of DRTV among retail and packaged-goods companies, which are using it to drive viewers to the Web. Once there, consumers can get more information or request samples or coupons. DRTV is serving a dual purpose for these advertisers: efficiently driving trial usage while generating double the impressions of a traditional buy in the most authoritative medium—TV.

The surge of DRTV is also changing the attitude of networks about which spots “qualify” as direct response. The sheer number of new cable networks also changed the direct-response playing field.

Historically, to qualify as DRTV and obtain deeply discounted rates, ads had to be at least 60 seconds in length. Now, 30-second ads usually qualify. Since these are standard-length commercials, more advertisers can use DRTV without the extra production costs of longer spots.

The Internet even changed the transaction. In the past, a DRTV spot had to feature a phone number as a response mechanism. Advertisers needed to have a telemarketing center set up to handle calls, an expensive proposition. Recently, marketers have placed a URL alongside the phone number, offering an alternative means of response. The URL has become the sole response mechanism for some advertisers.

While the majority of spots still feature some call to action, they no longer need to carry a specific offer (“Call now for a free CD-ROM”) to qualify. A recent audit of client DRTV spots revealed that only about 40% included offers. The call to action can be simply asking people to visit a URL.

There's been significant growth in cable TV usage by both viewers and advertisers. Thanks to digital technology, there are 60% more Nielsen-rated cable networks than there were five years ago. Our clients ran on over ad-supported networks this year.

Clearly, the medium can accommodate more advertisers. Diverting at least some traditional TV funds to DRTV is an innovative way to increase return-on-investment with lower rates and more effectively engage a target audience, all while obtaining better accountability of clients' media expenditures.

Sussman is president of ID Media, the nation's largest digital and direct-response media services firm.

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