Saturday, November 28, 2009

DRTV Media Cost

How many spots will I get? How often will my infomercial run? Can I just run my infomercial in one or two markets? Will my infomercial run in the middle of the night? How much does prime time cost? Questions, questions.....we've got answers. This is the blog for serious infomercial start ups, experienced DRTV entrepreneurs, and direct response marketers looking for an edge.

When discussing DRTV (Direct Response Television) costs -- always remember there are four components to a DRTV campaign.
-- TV Production
-- Media planning and placement
-- Inbound order capture (through telemarketing AND web)
-- Fulfillment


TV production costs can vary widely, and we are seeing a trend lately that is disturbing. In order to defray production costs many marketers are using inexperienced direct response producers. We have always said that TV production is the fun part, but that does not mean anyone can do it. Perhaps you can figure the production part out or find help from an experienced DRTV media buyer, but the wacky, wonderful world of direct response media is complicated and we do not recommend navigating this portion of your campaign without a serious direct response media buyer -- pit bull. That's right you must be tough, know when the media cost is too high, and be on top of this ever changing landscape to find true values.

Direct response media is the largest part of your budget and too many marketers are looking for instant results without proper testing. Remember, you should crunch your numbers, establish an allowable cost per order, and keep testing offers until you hit the sweet spot. For example, we recently started working with a new client that produced the short form TV infomercials themselves -- and placed the media themselves. They were buying "cheap" cable spots at about $2 a spot, but after careful analysis, we showed them that their cable buys were poorly targeted and in very limited distribution. In addition, they thought they could get more bang for the buck from short form, when in fact, their product line is much better suited to long form TV infomercials. Two dollars a spot may sound cheap, but at $100 per call, this media plan was very expensive. So how much does TV media cost? It's not what you pay, it's what you get. A good DRTV media buyer knows value, knows how to buy "fire sale" inventory, and is a tough negotiator.

Saturday, November 7, 2009

Infomercial Advertising On TV

Every day our telephones ring with entrepreneurs and established companies alike asking the same questions about TV advertising cost. In addition, since Billy Mays tremendous success and tragic death, many advertising and marketing executives are looking to get started with infomercial advertising on TV. This blog is for all of you, and hopefully we will "see" you here often for the current state of TV advertising rates, infomercial production costs, and media planning services.

In our last blog we talked about short form infomercial inventory being tight and expensive. The cable TV networks have gone "all in" after the upfront quarterly media buys that were mostly reserved for the big four networks (ABC,CBS,NBC and FOX) before the recession. Direct response television advertising depended on unsold preemtible media buying to make their offers payout. Well -- our DRTV inventory is being sold to major branding marketers looking for impressions and ratings - not orders! For example, last week a major cable advertising network called after we negotiated TV media rates for our client. They informed us that our rates would not clear and they needed another $100.00 per spot. We cancelled because our clients need cheap TV ads that can bring a profit.

So here's some food for thought. Long form infomercial television advertising rates are down, not up! Inventory is plentiful and highly negotiable. You rarely get bumped or preempted, and we are buying half hours for our clients as low as $40 in top ten markets like San Fransisco and Boston. When you do long form infomercial production, you have plenty of footage to create short form TV ads, Internet TV ads, and fill your web site with compelling demos and testimonials. The benefits of a traditional half hour infomercial are even more compelling in this "new" economy and Internet video era. The old saying "The more you tell, the more you sell" is more true than ever. We like to say there is much power in the half hour!

Wednesday, October 28, 2009

Direct Response TV Inventory Tight

A tightening remnant Direct Response TV market is leaving many infomercial marketers desperate for media, as traditional advertisers snap up the preemptible air time that supplies DR. "This is probably the tightest time I can remember in my history with direct response," said Scott Boilen, to reporters at AdAge. Boilen's company, All Star Marketing is the company behind the Snuggie. "We were the industry that took what's left," he added. "And there's not a lot left right now."

The lack of remnant airtime is a result of large corporate marketers adding to their quarterly buys, along with networks having to offer remnant ad space as "make-goods" to make up for ratings shortfalls over the past years.

The networks are not at all displeased to see DRTV advertisers getting knocked out of some of the media they've enjoyed during this recession, because they typically pay lower prices than the high flyers. "In the malaise that was out there in the first six months of the year ... you saw a lot of direct response popping up in network prime time," said one media-buying executive. "Well, not right now."

We have been recommending shorter DRTV commercials and infomercials for months, and apparently that trend is catching on. With fewer avails at two minute commercials, Snuggie, which had launched last year behind mostly 120-second spots, has down-shifted to 10-, 15- and 30-second commercials, Mr. Boilen said, noting that other DRTV advertisers are also moving to shorter forms.


"All the consumer-products companies and other big advertisers have renegotiated their rates, so they're able to buy more time, and things are back to where they were [before the recession] or even worse for us, because people are advertising more at the lower rates to try to make up for lost sales," said A.J. Khubani, CEO of TeleBrands, marketer of such products as PedEgg and JupiterJack to AdAge.

Saturday, October 17, 2009

TV Media -- 21st Century Style

I've often said that television is the most powerful communication tool in history. I said it in the 90's when the Internet began, and I say it again today as the Internet continues it's incredible evolution. But direct marketers and advertisers need to evolve,too. And the Internet provides opportunities for direct response television(DRTV)and infomercial advertisers like never before.

In the 21st century, you can brand and drive prospects to your web site that converts them to customers. No need anymore for a call center, no need anymore for long form advertising on TV. Try it, you will see. Use 30 second and 60 second short form TV advertising to drive your prospects to your website where they can view a longer demonstration, get a free gift or newsletter for logging in, or convert that skeptical prospect into a profitable customer with outstanding lifetime value.

Today's consumer wants information, credibility and value. Your TV advertising campaign drives traffic to your web presence, just like brick and mortar uses the short 30 second television format to drive traffic into their stores. More than ever, prospects are bombarded by many messages and much competition in all fields. Therefore, repetition and consistency matter more than ever in your television campaign.You can run 4 thirty second spots for every two minute commercial. That's four times the gross impressions and very likely -- multiple impressions for much of your highly targeted audience.

Monday, July 20, 2009

TV Media Costs - Unsold Media

We get asked every day about media costs. Has the recession lowered media costs? Where do I find TV and Radio media at the right price? Well, as I always say on this blog -- your media buyer better be smart! Please take a look a our last blog for a full report on third quarter media.

The fact is that there is much unsold media, and we have access to TV media on 98 cable networks with national distribution. Not only is this unsold TV remnant media available at low cost, we can target your best customers with research into age, sex, household income and more. In our database, we have five networks with distribution in over 40 million households, and the other 93 cable networks reach up to 15 million households. You only pay for the viewers who watch, that's how sophisticated the newer systems are!

In radio, our database contains 679 radio stations in virtually every market. Our media buying department can buy remnant TV and Radio direct response and infomercial media for up to 90% off rate card!

The key to lower media costs is uncovering unsold media, understanding the target audience, and buying media at the lowest cost per thousand.

Tuesday, July 7, 2009

SHORT FORM MEDIA REPORT 3RD QUARTER

Third quarter is traditionally the short form media quarter with the lowest rates, highest avails and some unique opportunities. So you would think that this year, especially, that rates would be low, avails high and the networks just hoping to get some business. But there are several factors that affect rates and availability is one of the most important. General advertisers buy quarter to quarter based on “cost per rating point.” And the rates these large advertisers are willing to pay are getting lower each quarter.

It has been reported that the upfront Broadcast Media Market is down three to five percent over last year. When general advertising rates decline like this, broadcasters try to make up the difference with direct response rates. In the current market, the cable networks would prefer to sell inventory at a 20-30 percent discount to general advertisers than it is to sell that same inventory to the DRTV market at a 50-70 percent discount. In addition, more and more general advertisers are placing “hybrid” or blended direct response media buys. They are using DRTV rates and placing “scatter” buys on inventory that may have been earmarked for direct response advertisers. Like we always say on this blog….your media buyer better be smart!

Thursday, March 26, 2009

Long Form Infomercial Media Update

So you’re probably thinking that since the financial meltdown of 2008, long form infomercial media costs have crashed. Well in some cases this is true. But remember, this marketplace works by the basic economic law of supply and demand. And direct response is hot in 2009! Moreover, long form infomercials that are driving retail still need the high profile airtime that is only available on major cable networks. So are rates for long form thirty minute infomercials down or not? The answer is yes, but as we have written in this blog repeatedly – your media buyer better be smart – and tough! And the marketer must hold their ground when negotiating rates.

Don’t be afraid to use the old fashioned take away! That’s what we do when stations and networks refuse our bids. We walk and keep looking for value in media. What we are seeing is a lot of local broadcast airtime opening up to long form media buyers. It’s cheaper for a broadcaster to sell half hours then buy programming and try to sell spots. You can find half hours in smaller markets for $50 and $75 bucks or just a few hundred in the most desirable weekend slots. That means just a few orders can make these offers pay out. Make sure you have worked out the metrics, know your allowable cost per order and stick to it. If an airing does not pay out, demand a make good from the station or tell them you will not keep airing.

The TV infomercial, and what we mean when we say, infomercial, is a half hour long form show….is still the easiest area of direct response for the entrepreneur to launch a product nationwide. Not only can you tell your full story, but your media buys can be truly tailored to a start up budget. The cost of producing an award winning TV infomercial is a fraction of the ROI this form of marketing returns. In addition, you will be able to pull two minute and one minute short form direct response television versions and have lots of video content for your online strategies.

Check this blog frequently for media DRTV media updates.

Monday, February 9, 2009

DRTV Equals Cost Per Acquisition

Back in the day, it was easier to succeed with Direct Response television. Nationwide cable media costs were much lower, general advertisers did not use Direct Response TV as a branding medium, and there was much less competition for direct sales to the consumer on television. Now, AS SEEN ON TV SUCCESS requires a compelling media strategy, a bull dog of a media buyer, and infomercial television production that captures the audience’s attention.

But one thing that will never change is that DRTV and infomercials work based on the concept of a pre determined cost per acquisition. It is the concept of an advertising allowable or media cost per order. Great media buyers buy nationwide airtime to a media cost allowable, and know if an offer is working from the first direct response media tests. Customer acquisition costs and great DRTV media buying go hand in hand.

Monday, January 19, 2009

Infomercial Media Funding

After 16 years working with entrepreneurs, startups and inventors, we have learned the challenge of funding an infomercial or direct response TV campaign. And there's good news! Since DRTV is a direct to consumer selling science, small media tests of as little as $5,0000 to $7,500 can interest large investments in a media funding roll out.

InfoWorx finds media funding partners for our clients. In order to qualify for media funding, a marketer must have a merchant account through a large direct processor. Recently, we helped a client gain an approved merchant account in less then a week, so there's always a benefit to leverage InfoWorx' vast network of colleagues and strategic partnerships.

Media funding partners will not ask for personal guarantees, but their contract will require their loans to be paid through the flow of revenue into the merchant account. An expert consultant can help navaigate the complex landscape of direct response marketing. And even find media funding as high as $50,000 to $100,000 per week. Media funders can be persuaded to work with multi pay offers and even free trial offers if the test data supports a roll out.