Growth in the use of direct response television advertisements has been dramatic. According to research by BT and Channel 4, the number of ads carrying telephone numbers rose from 12 per cent in 1993 to 19 per cent in 1995. Such an increase would have been easier to understand and manage had it simply come from the wholesale adoption of TV by new advertisers, or from the extension of one-step selling across more product categories.
Instead, the expansion of response numbers is based both on wider adoption of the technique and on a technological development in DRTV. When C4 first held a seminar on the subject in 1992, it only had a handful of campaigns – BUPA, NSPCC, Automobile Association and Cornhill – to talk about. In its 1995 research, the mix of users was wider.
“The sample has grown substantially. Of that seven per cent growth, at least five per cent is entirely new users, such as catalogues, mobile phones, IBM or Escom sellers,” says David Stubley, business development manager at Channel 4. “Just about every sector of service-based products is using DRTV.”
The pressures for change are coming from above the marketing department, believes John Orsmond, chairman of Advertising Research Marketing (ARM).
“Where businesses are at a high level of market penetration, the object is to find new channels to market, separate from existing ones, or to find different and better ways to do business,” he says.
The need to demonstrate clearly the return on investment in marketing, combined with a massive investment in database technologies – some 300m was spent on IT suited to marketing in the fourth quarter of 1994 – has led inexorably to the use of responsive media. TV has become central as it yields high volumes of data in a very short space of time.
But while lead generation remains an important function of DRTV, Stubley also identifies an emerging distinction between two types of responsive commercials (leaving aside one-stage direct selling which has been priced out of all but the satellite marketplace).
“We differentiate between DRTV, which is a mature market, and brand response, which is underdeveloped,” he says. The first group of advertisers are out to generate as many leads as possible at the best cost per response. But for the second category, this might not provide them with the quality of respondent they need.
“For example, Orange wants ABC1 males aged 34 – you won’t get them watching Countdown. You need different airtime, a change to the product offer, and different programmes and end breaks,” he says. Daewoo is another example of an advertiser whose key audience is only to be found during weekend peak-time breaks. But by looking at the lifetime value of the customer, rather than just the volume of response generated, the cost can be justified.
This is a long way from the traditional approach favoured by financial products or charities. But even they are becoming more willing to consider spending 70,000 on airtime if it ultimately produces 500,000 worth of legacies or covenants.
Not that everybody is convinced of the usefulness of this approach. Orsmond, for one, believes that “media owners are promoting lower call volumes by talking up brand response advertising to eliminate the spikes of demand”.
The infrastructure for handling calls is unable, in many cases, to cope with peak-time TV slots. As it is, something like 30 per cent of calls are already being lost. The only way to ensure that the new generation of DRTV users remain on air, and do not back off for fear of alienating customers who cannot get through, may be to encourage them to adopt a lower-key approach.
Even if this is being encouraged by media owners, it is not the only reason for the increasing use of brand ads which also generate response. RAC has been running a TV campaign that includes a response number, but whose primary purpose is to reposition the brand. It does not just offer membership, but covers the whole range of services offered by RAC, including insurance and accident recovery.
“The direct response element is an acknowledgement that few TV ads go without a means to talk to the company,” says Jonathan Latham, head of direct marketing and telesales at RAC. “But it is not pure DRTV. The goal is not to generate huge volumes of business. It is repositioning RAC and also giving the customer a chance to talk to us about our services.”
Although the commercials primarily have a brand-building job to do, the response has still been “more than expected”. But Latham says that it is not possible to divide the effect of the creative work from the provision of a number in considering why callers have responded.
RAC is also running press ads, one of which is pure direct response aimed at recruiting members, the other being branded, but offering a telephone number “to give the opportunity to talk about the repositioning of the service”.
The second ad does not feature a coupon, but although RAC will evaluate the amount of business achieved from each, this is not a creative test.
Latham says he is a great supporter of DRTV and that it will be a part of RAC’s marketing mix in the future. Dealing with customer response is seen as part of the service the company should be offering. Had the ads been purely response-driven, a different media schedule might have been worked out.
“We would not have pursued that weight. Traditionally, DRTV ads are aired off-peak; ours are running in Coronation Street,” he says.
This is one way in which the process of planning response media differs from awareness work.
“You have to be as focused as possible,” says Laurie Austin-Olsen, director of strategic planning at CIA Direct. “You buy against your target audience in bite-sized chunks and follow them around their programme repertoire.”
DRTV commercials are looking for lower rating slots. If there are too many viewers from the target group, the level of response generated will overwhelm the telephone handling centre. Building frequency and weight by following the audience in small segments across their viewing requires an intensive level of planning and resource which has helped to deter many media shops from engaging with this sector.
It also means that response advertisers are looking for very specific day parts or slots. While this may appear to give media owners an advantage in negotiations, Austin-Olsen claims: “The real issue is the need to be confident that spots will stay fixed where they are needed.”
He argues that the weighting of response TV still needs to be high, even though the ads are intended to have an immediate effect. “For every person who picks up the phone and responds, there is a number who nearly do, but don’t. They may be prompted by seeing the commercial again,” he says.
In reaction to the complexities of putting DRTV commercials and schedules together, Sky Direct pulls together three of the key resources needed to get on air: media planning and buying through Mansfield Lang Direct Media; commercials production through Can; and response handling through Sky’s facility in Livingstone, Scotland.
“It provides expertise for somebody new to the sector,” says Ken Mansfield, chief executive of Mansfield Lang Direct Media. First-timers make up about 50 per cent of the client base, which he says is expanding rapidly, while the rest have already used DRTV. “But some have had their fingers burned because they didn’t do it properly.”
He has no truck with the view that response can be generated without following the industry “rules”, saying that he “feels sorry for our friends in above
the line who do not know how to produce direct response communications”.
Not only are there creative rules which have to be applied, such as length of time the number is on screen and use of the voiceover, he says there are also pitfalls for the unwary media planner. “I know which are the best spots to appear in. Through my experience with DRTV I know where best to place ads and which spots are graveyards,” says Mansfield.
Another advantage Sky Direct can offer advertisers is the ability to buy only those day parts which work best for responsive commercials, without having to take other expensive slots as part of a package. How other media buyers feel about this privilege and how it affects their attitude towards working on DRTV schedules is an open question.
But Orsmond believes it is a stance other channels may have to match. “Media owners need to open their minds as well as their minutage,” he says. Increased competition in all markets is fuelling demand for airtime and driving media inflation, which makes the cost per response of DRTV harder to justify.
But there is no getting away from the fact that received wisdom about what works is increasingly supported and proven by research. The analysis carried out by Channel 4 and BT on DRTV this spring is a case in point. It found that where the phone number appeared at between six and ten per cent of total screen size, response hit an index of 184 against other executions. With a voiceover repeating the number, the response efficiency was 144, against 39 without voiceover.
Day part response profiles also reflected what direct marketers have always claimed. Noon til 2pm led the pack, at an index of 230, with 9am to noon hitting 200 and 2pm til 4pm reaching 193. Even the on-screen duration of the number was as important as has been claimed, with 11 seconds or more achieving a response efficiency of 200.
Mixing DRTV with other media will also build response. Beverley Price, targeting director at Ogilvy & Mather Direct, says: “I think it is essential to have a full multimedia approach. TV is a call to action and is accountable, but it does help to include even Yellow Pages to uplift response,” she says.
Including Yellow Pages may also uplift the budget available, since the directory company has been known to contribute ten per cent of production costs if its logo appears in a campaign. And it is money which is at the root of much of the growth of DRTV. Accountable marketing is a key goal for most boards of directors. Taken with the need to build a customer database and to find new distribution routes, it is making the argument for responsive commercials overwhelming.
Perhaps, even more importantly, DRTV is also providing what consumers want. Austin-Olsen notes that in many focus groups used to pre-research awareness TV ads, consumers are increasingly saying they like the commercial, but how do they find out more? “DRTV is one part of the growth of a distribution channel, and the growth of direct selling is the result of the consumer’s agenda. It is not being developed by marketers for marketers, so we need to collaborate and co-operate to meet those consumer demands,” he says.