1. A Sales Channel They Can’t Resist The Secret to QVC’s Success Elizabeth Esfahani The Secret to QVC’s Success Elizabeth Esfahani

2. What QVC Was “Trailer-park housewives frantically phoning for another ceramic clown” “Vehicle for broken-own movie stars…” “Trailer-park housewives frantically phoning for another ceramic clown” “Vehicle for broken-own movie stars…”

3. In Reality $5.7 billion in sales during 2004 Twice as profitable as Amazon.com 3rd largest U.S. broadcaster in revenue 1.5 million viewers for every 10,000 orders received Birkenstock airtime is worth $8 million in traditional advertising $5.7 billion in sales during 2004 Twice as profitable as Amazon.com 3rd largest U.S. broadcaster in revenue 1.5 million viewers for every 10,000 orders received Birkenstock airtime is worth $8 million in traditional advertising

4. Seriously? Honing the art of TV retailing Blend of entertainment and retailing Moving away from cherubs and bangles to: Home décor Electronics Fashion Use products to build relationships with customers Honing the art of TV retailing Blend of entertainment and retailing Moving away from cherubs and bangles to: Home décor Electronics Fashion Use products to build relationships with customers

5. Live Broadcasting Powerful connection with viewers Very Human “Backyard Fence Sell” Want rather than need Caller testimonials Best elements of reality TV Powerful connection with viewers Very Human “Backyard Fence Sell” Want rather than need Caller testimonials Best elements of reality TV

6. Analysis Immediate changes in response to low sales volumes Change lighting Different camera angles Caller testimonials Emphasizing saleable features Immediate changes in response to low sales volumes Change lighting Different camera angles Caller testimonials Emphasizing saleable features

7. Not as Easy as you think 20,000 inquiries in 2004 4% were accepted Products that don’t sell may be liquidated Underperformers may not come back 20,000 inquiries in 2004 4% were accepted Products that don’t sell may be liquidated Underperformers may not come back

8. The Road to QVC Develop your story Will it sell? Apply to become a vendor 3-week turnaround Put your product through its paces Be prepared to fail Bulk up those inventories $20,000 worth of product Practice your pitch QVC University Develop your story Will it sell? Apply to become a vendor 3-week turnaround Put your product through its paces Be prepared to fail Bulk up those inventories $20,000 worth of product Practice your pitch QVC University

9. Win / Sort of Win Situation Name brands increasing QVC’s credibility Introduction of QVC brand products No name brands generally succeed Name brands may suffer Name brands increasing QVC’s credibility Introduction of QVC brand products No name brands generally succeed Name brands may suffer

10. Shedding Historical Baggage Gaining higher product credibility without alienating current clientelle Pursuing Branding Partnerships Antiques Road Show Collection Lucky Magazine special QVC edition Gaining higher product credibility without alienating current clientelle Pursuing Branding Partnerships Antiques Road Show Collection Lucky Magazine special QVC edition

12. The Online Ad Surge Brand advertising online has taken off--and it’s shaking up Madison Ave. Stephen Baker Brand advertising online has taken off--and it’s shaking up Madison Ave. Stephen Baker

13. What it was Dominated by obscure companies Dot-com crash of 2002 meant decline in online advertising. “A few years ago, it was kids with green hair selling ads.” Dominated by obscure companies Dot-com crash of 2002 meant decline in online advertising. “A few years ago, it was kids with green hair selling ads.”

14. What it is Cost of advertising on “major portals” has jumped $180,000 / 24 hr period $300,000+ / 24 hr period No Vacancy Internet ad growth at 28.8% Overall industry: 7.7% 2004: Online ad industry $9.3 billion Cost of advertising on “major portals” has jumped $180,000 / 24 hr period $300,000+ / 24 hr period No Vacancy Internet ad growth at 28.8% Overall industry: 7.7% 2004: Online ad industry $9.3 billion

15. Why so successful? Effectiveness is measureable Clicks = Dollars and cents Effectiveness is measureable Clicks = Dollars and cents

16. Effects of online advertising Other media- advertisers want similar accountability for T.V and print media The TiVO problem How to advertise to TiVO customers? New Innovations Weather.com weather bar links to ads Google and the paid search Rich media evolution Other media- advertisers want similar accountability for T.V and print media The TiVO problem How to advertise to TiVO customers? New Innovations Weather.com weather bar links to ads Google and the paid search Rich media evolution

17. Complications & Innovations T.V. Spots are easy Online advertising means infinite choices How big of a banner? Horizontal or vertical? Interactive or static? Rich media or text? Sound, video, both? Makes people nervous T.V. Spots are easy Online advertising means infinite choices How big of a banner? Horizontal or vertical? Interactive or static? Rich media or text? Sound, video, both? Makes people nervous

18. The Remedy? Packaging, packaging, packaging! Coupling online advertising with traditional media buys Coupling prime ad locations with ads on other sites Watch T.V with one eye, surf the web with the other E.g. Adidas Individual customer relationships from broad marketing Packaging, packaging, packaging! Coupling online advertising with traditional media buys Coupling prime ad locations with ads on other sites Watch T.V with one eye, surf the web with the other E.g. Adidas Individual customer relationships from broad marketing

19. Maintaining relationships Once we get T.V. viewers to the website, how do we keep track of them?