Direct Response TV Advertising FTC Update

DRTV Advertising and TV Infomercial Advertising rules changes as of December 1, 2009. The Federal Trade Commission announced the implementation of its new Testimonial and Endorsement Guides.

The new Guides go into effect on December 1, 2009. Here are a few areas of important changes as reported by John Hendricksen of Manhattan Advertising and Media Law:

“The Guides remove the “safe harbor” provision which previously allowed use of a text disclaimer such as “results not typical” or “results may vary” when presenting exemplary testimonials of the product or service. In short, marketers should be prepared to disclose the “typical” results which users can expect to achieve.”

“If bloggers or “word-of mouth” marketers have a “material connection” to the product or service, this fact must be disclosed when writing, posting, or otherwise promoting the product.”

“Celebrities must disclose their relationships with advertisers when making endorsement-like statements on talk shows, interviews, blogs, tweets, or in other social media.”

We always recommend that you have your scripts checked by a good attorney to make sure that you are in compliance. For more information and DRTV and Infomercial resources look here.

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!

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.

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.

TV Media Costs Update

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.

Infomercial Media Report

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!

Perlstein’s Infomercial Testing Strategy

Welcome to summer!  Vacations, theme parks, beaches, sand, barbecues, and lazy days. This is the time to test your infomercial and direct response strategy for a fourth quarter — as seen on TV success story. 

Stay away from media buys in the first two weeks of July, but make sure you have thoroughly tested, tweaked and discovered the strongest creative approach by September 1, 2009.  You will be ahead of the curve and in position to make lots of money on your offer in the 4th quarter of the year.

INFOMERCIAL LONG FORM 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.

Infomercial Production in the 21st Century

Let’s talk about infomercial production. Let’s talk about the latest affordable TV production techniques. Let’s talk about using 21st century computer technology to make your long form TV infomercial look like it cost a million bucks!

Green screen or Chromakey technology allows you to shoot against a green screen background and drop in any environment you wish. Well …. when you combine the latest Chromakey magic using an Orad system combined with top notch virtual sets by the leading Hollywood virtual set designer, your direct response TV infomercial will look like it was shot on a million dollar set.

Think of an infomercial shot ten years ago against a black curtain and no set and now for the same low infomercial budget, you can have a top quality 3D virtual set customized with your product identity. Lately you see green screen infomercials and direct response commercials often with testimonials shot against green screen backgrounds. We’ve had several short form infomercial rollouts recently like SnorEnz, Memacin, and Cinergy Health. Infomercial production costs are coming down in 2009, and the cost to produce great long form infomercials and test them has been driven down considerably from just a few years ago.

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.