Although direct response television advertising (DRTV) represents only a fraction of telemarketing activity, its growth over the past two years has been dramatic.
Joint research carried out by BT and Channel 4 shows a 46 per cent rise in the use of DRTV since autumn 1993. Now 19 per cent of all TV commercials carry a telephone number.
The growth in use, however, has not been matched by a true understanding of the media by those in the marketing industry. The demand for capacity has not been met by in-house facilities or telemarketing bureaux.
“One in three calls is still being lost,” says David Stubley, business development manager at Channel 4. “DRTV is straightforward direct marketing on TV. If one in three calls is lost, then TV is not being evaluated as we would like it to be. These are red-hot leads making the effort to ring up and are simply being lost.”
Stubley is particularly concerned that bureaux are not investing enough money to increase capacity. “Capacity is the single most important issue. With the exception of one or two bureaux, most do not have enough live operators and the market is growing at such a pace that there is a likelihood that an even greater number of calls will be lost.”
He recommends that clients own their numbers rather than simply taking one from the bureau. “The owner of a number can ask BT for regular reports on call-effectiveness. This means they can see how many calls are being lost and it gives them control over the bureau. It’s surprising how many users simply don’t know what their call loss rates are.”
The response to the problem from most bureaux has been to introduce automated back-up. If all the live operators are busy, an electronic answering service can take details, and follow-up calls or mailings can then be made.
Stubley doesn’t think this is adequate. “The kind of people using DRTV do not want automated response systems. It’s no good just saying leave your name and number and we’ll put something in the post,” he says.
But providing a full, live-operator service where all calls are handled can prove expensive. “Ninety per cent of DRTV calls come in very short spikes following the ad,” says Simon Roncoroni, director of telephone user consultancy the L&R Group.
“It means that bureaux have to bring in staff to cover that brief period, and clients expect to pay them for the ten minutes or so they are operating. They want to buy on a commodity basis rather than for the service. The bureaux end up having to work on very low margins, which is not good for the industry. DRTV is the business that no telemarketing bureau wants unless it is on automated systems,” says Roncoroni.
Despite the problems of short-term staffing in bureaux and the alarming number of lost calls, live operator capacity need not be a problem, says Mike Gibson-Sharpe, marketing development manager at BT Telemarketing Services.
“If you look at the underlying data you’ll see it is a market of extremes. The 37 per cent overall loss rate drops to 23 per cent if you take out eight rogue campaigns. In one example, a campaign handled 1,400 calls but lost 54,000. Well-planned campaigns often achieve call loss rates of less than three per cent.”
Gibson-Sharpe points to the Comic Relief campaign, which used 2,750 live operators, overflowing onto 2,000 automated lines across 31 call-handling sites in the UK. In total, 445,000 calls were taken in one evening. “Even at its peak of 53,000 calls in five minutes, more than 60 per cent of callers got through first time,” he says.
“It demonstrates the capacity, resilience and flexibility of the network, and proves that with careful planning large capacities can be handled very effectively. No commercial campaign is ever going to generate that volume of calls, so there really is no need for the large numbers of lost calls.”
So what steps should a client take when planning a DRTV campaign? “You should start with your salesforce, see what volume of leads they can handle, and then work backwards,” says Gibson-Sharpe. “You’ll then be in a position to decide what volume you need to generate, which dictates how you run the ad campaign – how often you should do it, at what times and what audience to aim at.”
Telemarketing bureaux are keen to stress the importance of early consultation and better communication between themselves, the client, media buyers and ad agencies.
“Telemarketing bureaux are on the receiving end of a wide variety of DRTV campaigns,” says Merit Direct managing director Martin Shields. “We have amassed an enormous amount of knowledge about what makes a good one and what makes a bad one. It is essential that all parties are involved in the planning process from the outset. If communications between the media buyer and telemarketing bureau handling the responses are not what they should be, then all too often the bureau starts receiving unscheduled calls – calls it is not ready or staffed to accept.”
Although understanding and communication has improved, there is still a long way to go. Glenn Hurley, chairman of the Direct Marketing Association’s Telecommunications Council, highlights a recent instance when he showed a media buyer round a telemarketing operation. “The chap asked whether all the operators would still be round after midnight,” he says. “I told him they would if there was a specific requirement and he replied, ‘Oh well, I suppose it’s pointless for me to buy space after midnight without informing the bureau’.
“It shows there is a need to improve communication. Agencies must be sent media schedules well in advance if they are to be able to respond,” Hurley says.
When there is good communication between all parties, the one problem that still has to be overcome is predicting call volumes. Even if the bureau is fully briefed on the timing of ad schedules, a new campaign can prove unpredictable.
Despite the experience the industry now has, it is still very difficult to judge the number of calls that will be generated for campaigns – even if they are for similar products. One may have a more effective ad or the company may be better known. The advice from bureaux is to test before a full roll-out.
“The ideal is to start small,” says Debbie Hogarth, marketing manager at The Decisions Group. “Either use off-peak airtime or limit the campaign to certain regions, especially when the client is new to DRTV. Unlike advertisers, who have BARB data, you can’t go to a third-party that holds profiles by slot, product or industry. Building knowledge has to be done on a basis of parties co-operating and taking a step at a time.”
Roncoroni believes one seemingly obvious point is still often overlooked: “Predicting call volumes alone is irrelevant; it is the resource volume to meet incoming calls that is more important. Some calls last for two or maybe four minutes, whereas others can be dealt with in 20 seconds. The number of live operators needed depends more on the nature of calls than the number.”
Direct Dialog director Peter Gluckstein believes there are other factors that DRTV users have not grasped. “The DRTV element often seems to be bolted on at the end,” he says. “If you look at the majority of commercials, the telephone numbers are simply tacked onto the back of the ad.
“There are few examples where the telephone number or call for action have been incorporated into the creative treatment. The most notable being the creative use of numbers such as 40 40 40 by Forte and 28 28 20 by Guardian Royal Exchange, which has as its emblem an owl. Daewoo has also run commercials that make the phone number the focus of attention.”
The big danger facing the use of DRTV in the UK is not the high rate of lost calls. It is more that clients and ad agencies have decided to run campaigns without properly thinking through all the elements. UK companies have looked at the industry’s phenomenal success in the US and decided it is easy to repeat here.
Roncoroni points out that the two markets are very different: “In the US, there are three different time zones, so there are two peak rates per day for DRTV. It means that US bureaux effectively have six peaks in which to operate. Staffing is, therefore, a lot easier. You don’t bring people in for a three-hour shift and have them working for ten minutes. The US also has more TV channels, so DRTV can be more widespread and better targeted.”
Users in the UK must make a greater effort to understand the dynamic of DRTV and the difficulties faced by the bureaux. Campaigns that have been professionally run from the outset tend to be highly successful, but there are still plenty that do more harm than good to both client and industry.