1. Direct-Response Media
CHAPTER 11
Direct-Response Media
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2. Learning Objectives
Describe the various types of direct-response advertising
Explain the advantages and disadvantages of the various forms of direct-response advertising
Assess the factors considered in, and procedures used for, buying direct mail
Assess the strategies for delivering effective media messages via direct-response techniques.
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3. Direct-Response Advertising
Direct-response advertising is a form of media advertising that communicates messages directly to prospective customers.
Direct advertising is a form of media advertising that communicates messages directly to prospective customers. It is one segment of the direct marketing industry and it plays a major role in influencing consumer purchase decisions.
Marketer
Media
Customer
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4. Direct-Response Advertising
Direct-response advertising plays a major role in influencing consumer purchase patterns.
Direct-response delivers bottom-line results
Direct-response television in the form of infomercials accounts for an additional $20.8 million in revenues, or about one percent of all television advertising revenues. Direct mail advertising ranks third behind television and newspapers in terms of revenue.
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5. Trends Affecting Direct-Response Advertising
Factors effecting direct-response’s popularity:
Rise of video sites (e.g., YouTube)
Increase of infomercials
Targeting capabilities (database-management)
Measurement devices (customer-relationship management programs – CRM)
Ability to account for all dollars spent
Technology is fueling a shift to direct-response. With so many organizations practicing database management and implementing customer relationship management programs, direct-response techniques are the vehicles for reaching customers. Direct-response can reach customers more efficiently than traditional mass media.
The marketplace is moving away from traditional marketing and advertising and toward direct marketing and Internet techniques.
Direct mail has been around for years and at one time it was perceived to be the bottom of the marketing pecking order. How things have changed!
Traditional and conservative organizations who once scoffed upon direct marketing are now some of the heaviest users and believers in the strategy today (banks and other financial institutions, telecommunications companies, computer hardware and software companies, ads so on).
What an organization like Columbia House knew about marketing in the 1960s is now state-of-the-art marketing. Granted, it is a more complex version of it (e.g., database management techniques and interactive media to create awareness and induce action).
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6. Direct-Response Advertising
Advertising through any medium designed to generate a response, by any means that is measurable.
Direct Mail
Direct Response Television
Direct Response Print
Telemarketing
Direct-response advertising is advertising through any medium designed to generate a response by any means that is measurable.
The major types of direct-response advertising include the following:
Direct Mail – Advertising communicated via the postal service.
Direct-Response Print – A response oriented message delivered by magazine or newspaper.
Direct-Response Television (DRTV) – Advertising communicated by television (extended commercials or infomercials).
Telemarketing – personalized sales messages promoted via the telephone.
Direct marketing employs the media to get the message out.
Common techniques include direct mail, direct-response television, direct-response print, and telemarketing.
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7. Direct Mail The use of direct mail is widespread due to:
the ability to personalize the message with the prospect’s name
the ability to send lengthy messages
the ability to provide a high degree of geographic coverage commercially
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8. Direct Mail
Mail is the most common form of direct- response advertising. Options include:
Sales Letters
Leaflets and Flyers
Folders
Statement Stuffers
DVDs, Videocassettes, and CD-ROMS
Direct mail is the primary form of direct response advertising. The various types of direct mail alternatives include sales letters, leaflets and flyers, folders, statement stuffers (bounce backs), and DVDs, videocassettes and CD-ROMs.
Sales Letters - the primary communication in a mailing package; they are personalized but do look like a form letter in most cases.
Leaflets and Flyers - letter-sized pages that offer relevant information and accompany a letter.
Folders - sales messages printed on heavier paper; often accompany a letter; may be in the form of a postage-paid reply card.
Statement Stuffers (Bounce Backs) - advertisements distributed along with charge account statements (e.g., additional offers from Sears, The Bay and so on).
DVDs, Videocassettes, and CD-ROMS – organizations now send serious prospects information by more sophisticated means.
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9. Direct Mail Strategies
Solo
Direct Mail
Individually prepared offers sent directly to prospects
Co-operative
Direct Mail
Special offers from non-competing products in one envelope
Direct mail is divided into two strategic areas:
Solo (Selective) Direct Mail - Specialized or individually prepared and distributed directly to designated prospects. The advertiser pays all related costs. A mail package that includes only one offer.
Co-operative Direct Mail - Mailings containing offers for non-competing products that are distributed en masse to households. The costs are shared by participants.
A mail package that includes numerous offers but from non-competing products and services.
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10. Direct Mail as an Advertising Medium
Direct mail was avoided by packaged-goods companies, banks and financial institutions, and automobile manufacturers for a long time due to the negative images associated with it.
Now these companies are among the largest users of direct mail
Ideal medium for building a relationship with current customers
Continued…
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11. Direct Mail as an Advertising Medium (cont.)
Research indicates 84% of people will open a direct mail piece if their name is on it
77% are likely to read direct mail if addressed to them.
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12. Advantages and Disadvantages of Direct Mail
High cost per exposure
Absence of editorial support
Image and life span
Potential delivery delays
Audience selectivity
High reach
Geographic flexibility
Creative flexibility
Distribution of Incentives
Advertiser Control
Exclusivity
Measurability
The primary advantages of direct-mail advertising include audience selectivity (based on accurate lists), high reach, geographic selectivity, creative flexibility (long copy), distribution of incentives, advertiser control, exclusivity, and measurability (success measured by actual sales).
Audience Selectivity - targets are precisely defined in terms of demographic characteristics. Prospect lists can be acquired.
High Reach - solo direct mailings reach everyone the advertiser would like to reach; cooperative mailings offer mass distribution to selected Canadian households.
Geographic Flexibility – a proper mailing list offers an advertiser not only demographic selectivity but also the opportunity to deliver direct-mail messages to specific geographic locations.
Creative Flexibility – direct mail offer the flexibility too include long copy in advertisements. There is flexibility in terms of style, length, and format.
Distribution of Incentives – direct mail provides the opportunity to include items that will reach desired targets. It is a good medium for distributing coupons, free samples, and trail offers.
Advertiser Control - of message quality; and circulation in the case of solo mailings.
Exclusivity - mailings do not compete with other media at the time they are received, although they do compete for attention with other mail..
Measurability - success is measured in only one way--the sales generated by the mailing. Early responses in conjunction with historical data can accurately project sales over a longer period.
The disadvantages of direct mail include high cost per exposure, absence of editorial support (a reason for reading), image and life span (junk mail image), and potential delivery delays.
High Cost Per Exposure – when the absolute costs of production ,renting or purchasing lists, fulfillment (stuffing and sealing the envelopes), and mailing are tallied, the total can be higher than it is for other print alternatives.
Absence of Editorial Support – in comparison to magazines, where there is editorial support that encourages people to read, direct mail stands alone. It must grab attention without assistance.
Image and Lifespan – direct mail is not a prestigious medium. Many consumers perceive direct mailings to be junk mail, and pieces are promptly discarded when they reach the household. Many consumers do not perceive the special offers to be all that special.
Potential delivery delays – other print media have specific issue dates, so the time of message exposure is precisely controlled. Since direct mail relies on the postal service, and since it delivered third-class, there are no delivery guarantees.
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13. Buying Direct Mail
There are three basic steps involved in buying direct mail:
Obtaining Direct Mail Lists
Production
Distribution
There are three basic steps in buying direct mail:
Obtain Lists - Securing accurate lists from internal sources, directories, and other external sources is critical. Internal lists are referred to as house lists. List brokers are used to secure external lists. When purchasing lists of names, the price goes up as the quality of name goes up. High quality external lists are developed through a merge/purge process on a computer, whereby numerous lists are purchased, combined, and stripped of duplicate names. Geomapping targets an audience based on demographic, psychographic, and behavioural data. There are several types of lists: response lists (a list of proven buyers), circulation lists (lists of magazine or newspaper subscribers), and compiled lists (lists compiled from public or commercial registries).
Production - Creative design by the agency and then printing and stuffing by other organizations.
Distribution - Using the postal service or private organizations. Canada Post plays a major role and works very closely with clients to develop and implement direct mail campaigns. A number of options are available through he postal system: first-class mail, third-class mail, and business reply mail.
First-class mail – Advantages: quicker delivery, the return of undeliverable mail, and mail forwarding if the addressee has moved.
Third-class mail – Advantage: cost savings over first-class mail.
Business-Reply Mail – Advantage: an individual can respond at the expense of the advertiser.
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14. Obtaining Direct Mail Lists
Lists of names are obtained from internal and external sources.
Internal
Customer database—a house list
Development of prospects
External
List Brokers
Merge / Purge
The quality of a direct mail offer is directly linked to the quality of the list that is used.
Internal:
As the characteristics of the demographics become more specialized (e.g., additional characteristics are added), the cost of each name increases.
The best list is a list of current customers available from an internal database. Organizations must keep their database up to date.
External:
A list broker supplies a list of possible prospects on a cost-per-name basis, based on both demographic and perhaps psychographic profiles.
High quality external lists are obtained through a merge/purge process on a computer whereby numerous lists are purchased, combined, and stripped of duplicate names.
Canada Post also offers god information for accurate targeting of mailings. It is all done through postal code data that can be married to other data available from the government (e.g., census data and income tax data).
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15. Types of Lists
Specialized quality lists cost more. Names are bought on a CPM basis. Lists available include:
Response Lists
Circulation Lists
Compiled Lists
Typically, direct mail media costs are quoted on a cost per thousand basis for both printing the mailing piece and distributing it. Cooperative direct mail packages cost mush less than solo direct mail packages.
Response List - a list of proven mail-order buyers.
Circulation List - magazine subscription lists that target specific customers.
Compiled List - lists prepared from government, census, telephone, warranty, and other publication information.
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16. Direct-Response Television
There are three forms of direct response television:
60-second or longer commercials
Infomercials
Direct home shopping
In each case, the use of toll-free telephone numbers, websites, and credit cards makes the purchase more convenient for the viewer.
There are three basic forms of direct response television: 60-second or longer commercials, infomercials, and direct home shopping via television shopping channels. The infomercial is becoming more popular with all kinds of advertisers.
An infomercial is a commercial that runs for more than 12 minutes. Some run as long as 30 minutes and a program-like in terms of content. Infomercials encourage immediate action by using telephone numbers and buying on credit. The spectrum of direct response television advertisers includes pharmaceutical companies, banks and other financial institutions, automobile manufacturers, technology companies, and not-for-profit organizations.
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17. Types of Direct-Response Television (DRTV) Advertising
There are two types of DRTV advertising:
Short-form
Vary in length from seconds
Long-form
Commonly referred to as infomercials
May last minutes
Include characters and follow a script
The infomercial presents a sales message in great detail and asks for the order over and over again. The range of products now using this technique is endless.
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18. Direct-Response Television
Direct response commercials are classified based on the intent of the ad.
Traditional
“Buy now”or “Limited time offer.” Immediate action is the goal.
Growth in direct response television has caused marketers to consider using the medium differently. At one time it was a vehicle for stimulating immediate sales. Now it is also used to build brand and company image.
Direct-response television commercials can be classified into two distinct categories: traditional infomercials stress the buy now, limited time offers. Corporate or brand infomercials are designed to establish leads, drive retail traffic, create awareness and interest in new products, and help protect and enhances the brand image.
Traditional - an infomercial that stresses how to buy now. It tells and sells continuously.
Corporate or Brand - an infomercial that establishes leads, drives retail traffic, launches new products, creates awareness, and protects and enhances brand image.
Corporate
or Brand
Establish leads, drives retail traffics, create awareness, and build image (longer term strategy).
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19. Direct Home Shopping
Cable television channels (TSC – The Shopping Channel) offer products for sale by broadcast message.
Product messages presented by close-up shots
Ordering details presented frequently
Provides shoppers convenience
The explosion in specialty television channels in the 1990s spawned the Value Plus network and the Canadian Home Shopping Channel. Viewers can listen to the sales pitch and order directly via numbers.
The medium lacks glamour, but don’t underestimate its sales potential.
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20. Direct-Response Print
It is common for advertisers to communicate direct-response offers through newspapers and magazines.
Field leads for future marketing programs
Chanel prospects to a website
Get prospects to tale action immediately
Local market newspapers and magazines are good vehicles for delivering direct response print advertisements. Newspapers reach a geographic area while magazines can target certain demographic characteristics. The travel industry is one that uses direct response print techniques frequently in these media. Ads encourage potential travelers to call a number or visit a Web site for more details. Many people now make all of their travel arrangements online, a direct result of direct-response advertising efforts.
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21. Inserts Another direct-response print media alternative is the insert.
A single- or multiple-page document inserted loosely or stitched directly into a publication.
It can be strip-glued (a gum-like glue) or placed as a tip-in (place an ad and then attach the insert on top of the ad)
Inserts are commonly associated with direct-response print ads. An insert is a single or multiple-page document included in the publication (usually glued to another page containing an advertisement).
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22. Telemarketing
Much telemarketing activity is conducted through call centres.
A call centre is a central operation that handles all inbound and outbound calls.
Two types of telemarketing:
Inbound telemarketing
Outbound telemarketing
There are two types of telemarketing: inbound telemarketing and outbound telemarketing:
1. Inbound Telemarketing - The reception of calls by an order desk from customers through toll-free telephone numbers.
2. Outbound Telemarketing - The placement of calls by a company to a customer in order to secure leads or close a sale.
Telemarketing activity is usually handled by a call centre. A call centre is a central operation that handles all inbound and outbound calls. The role of call centers is expected to expand in the future for several reasons: companies are aggressively mining their database for opportunities and database software and telephone system technology make it cost effective for organizations to link their database to the phone.
As a sales and advertising technique, organizations must be aware of the perils of telemarketing. Consumers voice a lot of displeasure with outbound telemarketing practices, citing aggressive and sometimes abusive behaviour by callers. They also object to the timing of such calls (usually between 5:30 and 7:30 pm). The cost efficiencies of call centre operations outweigh by far, these disadvantages.
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23. Inbound/Outbound Telemarketing
Inbound – the reception of calls by the order desk, customer inquiry, and direct –response calls often generated through the use of toll-free or numbers
Outbound – calls that a company makes to customers to develop new accounts, generate sales leads, and even close a sale.
Telemarketing represents about 60% of sales generated by direct marketing techniques.
Inbound - the reception of calls by an order desk; the phones start ringing after the offer has been announced.
Outbound - calls that an organization make to customers to develop new accounts, generate leads, and even close a sale.
A drawback to telemarketing is the fact that consumers react negatively to it. A survey by Ernst & Young d that 75% of Canadians consider marketing calls unwelcome and intrusive; they are ranked by consumers as one of the least desirable sales techniques.
Marketers believe the cost efficiency of telemarketing outweigh the disadvantages.
Call
Centre
Inbound
Outbound
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24. Consumer’s Right to Privacy
In 2005, the federal government passed “do-not-call” legislation to further protect unwanted phone calls. Below are more details on the CMA’s privacy code.
As future marketers, what is your position with regards to telemarketing?
Insert Figure 11.14
Have students state their position. The cost of telemarketing is so much lower than other forms of communications that marketers are willing to tolerate the negative reactions of consumers. Much like a game in which the law averages kicks in, the marketer knows that for every so many calls made, someone will respond in a favourable way.
Discuss creative ways to reach the customer using inbound telemarketing or alternative outbound communications (CRM allows communications with customers in a variety of formats – mail, internet, etc.)
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25. Telemarketing
Telemarketing is cost efficient. It is much less expensive than personal selling and mass advertising.
Proper training and preparation of representatives is crucial.
The message delivered is as important as the medium itself.
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26. Strategic Considerations for Telemarketing
Scripting plays a significant role in the success of a telemarketing campaign. Here are some basic tips for the telemarketer:
Focus on the relationship
Adjust the script approach for your audience
Empathize with the receivers
Establish rapport and gain attention quickly
Keep it short and simple
Be prepared
Make it easy to say yes
Scripting plays a significant role in the success of a telemarketing campaign. Here are some basic tips for the telemarketer:
Focus on the relationship – long-term relationships and repeat business is the key.
Adjust the script approach for your audience – Be flexible based on unplanned objections.
Empathize with the receivers – approach each prospect as an individual with unique needs.
Establish rapport and gain attention quickly – Be honest and sincere immediately.
Keep it short and simple – Simple messages explained clearly work better. Use short words and sentences.
Be prepared – Through simulated role-play fine tune the presentation.
Make it easy to say yes – Structure the offer to reduce risk and ask for the order.
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