Electronic Retailer - October 2011 - 24

ASK THE EXPERT

BY TIMOTHY R. HAWTHORNE

t
24

Fighting the Long-Form Response Drop
income levels and less access to credit, says Swanson, and the situation becomes even more challenging. Despite the fact that average TV viewing time per person is rising, long-form viewership seems to be dwindling, perhaps suggesting a cultural sea change along with disinterest in product offerings. Is it possible, with the thousands of ad messages pushed at us every day on three screens, that we prefer – no, demand – shorter messages? The irony is that these consumer and viewership trends are happening while long-form media costs have dropped like a rock, falling 20 percent to 50 percent from 2003 levels. Some major cable network prime weekend time slots, once fetching $50,000 in the mid-’90s, can be had for half that today. So what’s a long-form marketer to do in this perfect storm of changing consumer habits and TV viewership shifts? Start by finding a product or category where demand already exists and consumers want better options. And don’t depend solely on infomercial sales. Instead, take the products into retail, web, mobile, home shopping and other channels immediately. Upsells, cross-sells, multi-payment and continuity programs are also important because they give consumers the opportunity to spend more money over time. “Instead of a 30-day free trial offer, sell a one-year supply,” Leon says. “Otherwise, you’ll limit your cash flow significantly by charging $29.95 for a one-time offer that barely covers shipping and handling.” Finally, remember that long-form serves as a foundation for integrated campaigns that generate response on many different levels. Retailers, for example, love products that are supported by long-form campaigns and that cultivate consumers’ interest before they even step foot in the store. “The infomercial marketers who succeed in this challenging environment are the ones who integrate across all channels,” says Leon, “and who don’t just rely on the phone to ring.” Tim Hawthorne is founder, chairman and executive creative director of Hawthorne Direct, a full-service DRTV and New Media ad agency founded in 1986. Since then, Hawthorne has produced or managed more than 800 direct response TV campaigns for clients such as 3M, Black & Decker, Braun, Discover Card, Time-Life, Nissan, Lawn Boy, Nikon, Oreck, Bose and Feed the Children. Tim is a co-founder of the Electronic Retailing Association, has delivered more than 100 speeches worldwide and is the author of the definitive DRTV book, The Complete Guide to Infomercial Marketing.

The days when television viewers picked up their phones to dial toll-free numbers while viewing infomercials could be numbered or, at least, slowly dwindling in favor of other response mechanisms. The economy, a lack of available credit for shoppers and changing consumer habits are all taking a toll on the venerable DRTV cornerstone known as the infomercial. Over the last five years, long-form response rates have become infuriatingly torpid, despite media rate drops and much to the concern of long-form veterans. The Jordan Whitney’s Top 15 infomercials now average more than 171 weeks on the charts, meaning fewer and fewer new products are resonating with consumers. What’s going on? Sure, the credit crunch is having a devastating impact as American families pile grocery bills, inflated gas prices, rising mobile and broadband/cable TV service among other monthly obligations on top of their already-high balances. Putting a $99 piece of exercise equipment on top of that very heap sends shoppers credit cards into “declined” territory. Even the easier, “Four payments over four months” plans are now out of reach for many credit-strapped consumers, with credit declines rising dramatically in the second, third and fourth months. There are other forces at work here though, such as reduced production of infomercials to test the market. “In this economy, it’s difficult to convince marketers to invest $500,000 in production costs right now,” says George Leon, Hawthorne Direct’s senior vice president of media. “It takes confidence in your product and a tolerance for risk to invest that kind of money to test the DRTV market, so more companies are turning to short-form.” Proliferation of HDTV also may be impacting longform’s ability to generate response. As of late 2010, about 60 percent of the country had at least one HDTV in the home. That means more channels, more shows and less channel surfing as consumers pinpoint specific programming to watch. Throw in the fact that computers and mobile devices have become the second and third screens in most homes, and the opportunity to hit them with long-form commercials during the overnight and early-morning hours dwindles. Scott Swanson, president at inbound telemarketing firm Synergixx in Sewell, N.J., has seen a drop off in long-form conversion rates as well, and he points to the economy and frugal consumer buying habits as the two biggest culprits. “There’s a lot of doom and gloom in the news right now,” says Swanson. “People are drawing the purse strings until they see what happens with issues like the national debt level.” Combine that sentiment with lower disposable

electronicRETAILER | October 2011

Electronic Retailer - October 2011

Table of Contents for the Digital Edition of Electronic Retailer - October 2011