Saturday, January 21, 2012

DRTV Media Rates and Rollout Strategies

Direct Response TV Rates are based on supply and demand.  After the upfront quarterly media buys are made by the largest corporate advertisers, media companies have inventory that may be used for spot branding buys (scatter media buys) and DRTV or Direct Response Television.  Check back here often because we also cover radio which works a little differently.
Media rates flatten in the early part of the first quarter and slowly rise as we move closer to the important second quarter with many Spring and outdoor activities starting up again such as lawn maintenance, outdoor recreation, and Easter.
Direct to Consumer:  If your product is a Direct to Consumer product such as a supplement or skin care product that will rely on DRTV or DR Radio sales, a rollout can start slow and simply build and ramp up slowly based on sales and budget capability.
Lead Generation: Lead generation rollouts may be impacted by your call center or inbound telemarketing capacity issues.  Once your lead generating DRTV commercial or short form infomercial is tested and you are within your allowable, a slow but steady ramp up can take place like Direct to Consumer.  But if your phone room is small, steps must be taken to make sure all calls are answered and all leads responded to in a timely fashion. Also lead generating spots are well suited for Per Inquiry or PI distribution once the creative has been tested.
Direct to Retail: Many of the best known direct response products are consumer products that solve a problem and cost $19.95 or less. In the Direct to Consumer model often continuity sales or auto ships or reorders keep the backend very profitable so the marketer can afford a decent allowable cost per order. Check here for more on the allowable concept. The Direct to Retail model uses retail sales to complete the “backend” sales which are crucial to success.  DRTV commercials drive retail sales.  The retailers are looking for robust media plans in order to give you their precious shelf space.  Direct to Retail rollouts should start with budgets of $25,000 per week and a strategy to be rated as an up and coming product. Often media funding companies are brought in to help with this type of rollout.

Monday, January 2, 2012

DRTV Response Rates-Allowable Cost Per Order

DRTV Response Rates. $50 per spot DRTV. According to my research these two key words come up in many searches. So let’s talk it about because if you are looking for the latest 2012 DRTV Media information, The DRTV Media Blog is the place to get it. Please mark it or subscribe.

For those of you just getting started, DRTV is an acronym for Direct Response Television, which is a method of advertising on TV on a National or Local level in which the advertiser pays low, low rates which are pre-emptible or, in other words, remnant media. Savvy marketers and advertiser establish an allowable cost per order to reach sales goals that should be preset.

DRTV Response Rates are usually tracked via metrics known as Media Efficiency Ratio or Media Ratio or MER. Let’s define a few of these terms:

Media Efficiency Ratio (MER): The total number that decides an infomercial's overall success or failure. The ratio is derived by dividing total sales by the media cost. Sales/Media Cost = MER. This term is also sometimes referred to as Media Ratio or simply Ratio. You can track your TV commercial media buying efficiency on a single airing, a group of airings by station or a week, month or quarter.

Ad Allowable: Your ad allowable tells you how much you can afford on a cost per order basis. The ad allowable is the dollar amount determined to be the maximum media expense for each unit sold in order to generate a legitimate profit. To calculate your allowable add all of the revenue per unit including postage and handling and then deduct all of the expenses including cost of goods, telemarketing, etc. Here is a tool that may help you determine your Ad Allowable.

Cost per Order (CPO): The average cost of television media to generate one product order, determined by dividing the cost of a specific infomercial telecast by the total number of orders received from it. Compare this number to your Ad Allowable and you will know if you are reaching your goal or not.

Media rates ease up significantly in the first few weeks of a new year then gradually move back up as the winter nears its thaw. First and third quarters are the best TV media buying quarters as far as rates with second and fourth quarters having the most demand from corporate and branding advertisiers who pay higher rates.