The Essentials of Direct Response Media

1. The Essentials of Direct Response Media Thanks to Wunderman Worldwide

2. The Essentials of ClassicDirect Response Media • Direct Mail • Print • Broadcast • Television • Radio • Support Media

3. The Role of Media • Media planning is concerned with how to use advertising time and space most effectively (and efficiently) to contribute to the achievement of marketing objectives.

4. The Role of Media • Media provides a bridge that delivers the right message (and offer) to the right target. In this respect, media decisions that deliver both image/awareness are the same for direct response efforts. • Media planning that is involved with generating a direct response, goes steps further in analyzing previous results and projecting future response.

5. Media’s Role in Direct Marketing • The “accountable” nature of direct marketing is the crucial determining factor used to plan each media campaign. Historical response analysis is the foundation and starting point for the overall planning process.

6. Media’s Role in Direct Marketing • Front-end Response -% response -Orders per thousand -Cost per order

7. Media’s Role in Direct Marketing • Back-end Response -The quality of the customer is primarily measured by total sales (net of bad pay) per customer, but related measures are also used such as: conversion %, renewal rate and upgrade %, cross promotion sales, credit card usage, and ultimately a “Lifetime Customer Value” Index.

8. Direct Response Media All media can be utilized for direct response advertising:

9. Media Decision Factors • See table on next page.

10. Planning Direct Mail

11. Type of Lists • Compiled • Names and addresses derived from directories, public records, newspapers, retail sales slips, trade show registrants, etc., to identify groups of people who have something (single identifiable characteristic) in common.

12. Type of Lists • Response • Names and addresses of consumers or business executives who ordered and paid for a product or service through the mail. • Response Enhanced • Consumers(purchasers) who have filled out questionnaires and mailed in those questionnaires which describe their demographics, psychographics and specific product buying habits. • House List • Purchased or inquired, 5-6 times better results

13. R-F-M • Recency • When was the last time they purchased? • Frequency • How often do they purchase? • Monetary • How much money do they spend?

14. Other Important Selection Criteria • Sex • State • SCF/ZIP • Age

15. Other Important Selection Criteria • Source • Direct mail sold • Print • Other direct mail media • (Renewals, M-G-M’s, Package Inserts, Co-Ops, Statement Stuffers, Syndicated Products, School Marketing) • Broadcast • Telemarketing • Take Ones, FSI’s, ETC. • Warranty Cards

16. Merge/Purge Advantages • Previously mailed names are eliminated. • Each prospect gets only one mailing piece. • Current customers are eliminated. • Bad debts are eliminated. • DMA pandering names are eliminated (House pandering also). • Inter-file duplicated are analyzed.

17. Merge/Purge Advantages • Multi-buyers are flagged for remailing. • Nixi’s are eliminated, (NCOA). • Demographic data can be appended. • Phone numbers can be appended. • Carrier route coding provides for postal savings. • Decoys are added in.

18. Planning Print Media

19. Planning Print • Step One: Establish Objectives -Direct Sales or Lead Generation -Image plus Action -Retail Support • Step Two: Determine Goals -Cost/Response or Order -Volume of Leads/Sales Needed -Budget

20. Planning Print • Step Three: Establish Media Variables -Target Audience -Seasonality/Responsiveness -Unit • Step Four: Response Projections -Based on Historical Data

21. Target Audience • Step One: Sizing the Opportunity -Syndicated Research • Step Two: Determine Media Usage -Broad Audience: Mass Publications -Narrow Audience: Targeted Publications

22. Seasonality/Responsiveness • Seasonality of Product • Most Responsive DR Months -January -February -September -October • Frequency Separation

23. Unit • Insert units vs. on-page • Balance of volume and efficiency • Larger, intrusive units • Volume • High Response Rates • Expensive out-of-pocket • Small space units • Low response rates • Low volume • Efficient CPO

24. Buying Print • Direct Response Rates • Corporate Rates • Frequency Rates • National vs. Regional

25. Positioning • Front of Book, RHP • Back to Book, Heavy DR • Editorial Adjacency • Competitive Separation

26. Test Structure • 2-5 Key Categories • 2 magazines per category • 2-3 unit tests • A/B splits • Creative • Offer • Units • Statistically reliable • Individual key codes for clean read

27. Direct Response Television

28. DRTV: What is it? • A direct marketing strategy… • Designed to generate a response… • Utilizing low-cost spot television… • In a variety of lengths...

29. DRTV: What is it? DRTV is often purchased for as little as one-quarter the cost of General Advertising • Time is bought in large blocks, I.e. dayparts rather than specific programming • “Hybrid” clients pay a higher rate guaranteeing select daypart rotations • Time is pre-emptible

30. Qualifications for Direct Response Rates • The offer should be exclusive and not communicated in other advertisements. • The commercial must have a strong call-to-action urging the viewer to call now. • The offer should be time-dated and good for a limited time. • A general oriented commercial with an 800# added will not qualify as direct response. Stations review story boards prior to accepting the execution.

31. Direct Response Television Process • Direct Response television commercials produce two types of sales results: • One-step process: • Utilized by most traditional DRTV advertising (subscription, low out of pocket items) • Telemarketing closes order obtaining all pertinent information

32. Direct Response Television Process • Two-step process: • Additional information is generally required to close a sale • Often utilized for items costing over $200.00 • Multiple product/service items exist • Requires more sophisticated support from either telemarketing or from in-person sales call • Advertisers include; insurance, home loans, financial products, exercise equipment

33. Direct Response Television Process • Direct Response Television is more like the Stock Market than it is television. • DRTV is: • A commodity • Extremely volatile • Difficult to second guess

34. The Planning Process • Media Plan prepared utilizing client and agency data from other clients on individual station response levels. • The “accountable” nature of direct marketing is the crucial determining factor used to plan each media campaign.

35. The Planning Process • Historical response analysis* is the foundation for the planning process: • Front end response • % response and cost per inquiry • Back end response • % quality of customer and lifetime value

36. Step: 1 Setting campaign goals/strategic approach • Leads/orders • Awareness Building • Spending levels

37. Step: 2 Select and Rank (priority) markets/stations • Previous history/back end data • Responsiveness • Efficiencies • Marketplace conditions • Anticipated clearance • Product distribution • Target audience penetration

38. Step: 3 Commercial Length Both :120’s and :60’s are strategically integrated into a campaign • :120’s • Base support on all spot stations • More responsive than :60’s • More cost effective than :60’s • Ability to clear on most stations and dayparts • Use on cable based on available inventory

39. Step: 3 (cont.) Commercial Length Both :120’s and :60’s are strategically integrated into a campaign • :60’s • 100%-150% higher cost vs. 120’s • Strategically schedule on selective dayparts • Where :120’s traditionally are difficult to clear • Demographically targeted • Base support for cable • :120 inventory is extremely limited

40. Step: 4 • Daypart Rotation • Responsiveness • Cost • Targetability of programming • Availabilities • During the buy management process, daypart rotations are adjusted: • Poor performing dayparts limited or cancelled • Increase spending in effective dayparts • Negotiate rates on marginal dayparts (keeping in mind the target audience)

41. Step: 4 (cont.) • It is important when beginning a new campaign to schedule a broad daypart rotation. This will maximize up-front learning and help extend the life of the campaign.

42. Testing An Added Value/Dimension • Testing is becoming more important for Direct Response Advertisers. • Viability as a DRTV campaign • Creative • Unit length • Copy variable • Offer variations • Premiums

43. Testing There are two primary forms of testing in DRTV: • Fixed-Spot Test • Matched Markets Test Each has its uses and list of specific characteristics.

44. Testing Fixed Spot Test (FST) • Fast • Controllable • Guaranteed • Costly-does not pay for itself • Campaign performance questions • “Little U.S.”

45. Testing Matched-Markets Test (MMT) • Slower • Feasibility test • Campaign projection • “Manageable” • Pays in volume generation • Pre-emptible • Replicated DR campaign • “As it Falls”

46. Managing the Buy Objectives are managed over the length of the campaign • Counts are received from the telemarketing services on a daily basis. • Exact times are received from the stations. • Buyers adjust schedules daily based upon performance and availability of air time.

47. Managing the Buy Responsiveness on a daily basis • Rates are renegotiated. • “No-charges” are negotiated. • Ineffective/inefficient dayparts are eliminated. • Spending is increased on well-performing stations. • Poor stations are eliminated. • New stations are recommended.

48. Managing the Buy As a result... • Flight dates are shortened or extended. • Alternate commercial lengths are tested and used. • Creative/product fatigue is assessed. • Individual station activity is added to, reduced, or cancelled.

49. Future Opportunities--Long Form (Infomercials) As a result of FCC deregulation, Long Form has grown in acceptance: • 30 minute infomercial • Marketer is the program producer • Integrated editorial/commercial message with response device

50. Future Opportunities--Long Form (Infomercials) Current uses: • DR marketers • Lead generation • Self-help and Self-improvement