Direct Response Television: The Retail Sales Supercharger
DRTV advertising fuels wild retail sell-through and acts as a force multiplier across all marketing channels
As marketers we’re always attracted to new ways to reach our customers effectively. Witness the boom in ecommerce led by astute marketers who’ve mastered how to reach their target customers digitally on a direct-to-consumer (D2C) basis. Despite such success, however, there’s a much larger game to be won, a great majority of brands still achieve their greatest success at brick-and-mortar retail. For such traditional retail-focused brands, (or ones that aspire to be), the path to explosive, long-term growth isn’t through digital–it’s through direct response television also known as DRTV.
Insight #1: Retail is alive, well, and where the growth is
While a thriving D2C channel can be both valuable and deliver high margins, the potential to grow a brand’s bottom line at retail represents an infinitely richer possibility. For all the talk of growth online, domestic ecommerce sales still stand at a fraction of overall consumer transactions (and Amazon represents half of all ecommerce dollars in the US), approximately 9 out of every 10 consumer sales are made in brick-and-mortar aisles. It will likely be decades, if ever, before online sales reach the level of retail sales volume. So, while you read headlines espousing the notion that all of the growth in overall retail is happening online, real exponential sales growth still exists in an environment where a shopping cart is pushed versus pressed.
TV reaches over 110 million US households daily over hundreds of channels. Nearly every TV watcher ends up making decisions in retail stores multiple times a week. Given the pervasiveness of retail shopping, even the best marketers who don’t have an offline DRTV scale strategy are missing out on significant retail sell-through potential.
Insight #2: DRTV efficiency is unrivaled at scale & creates demand across all channels
In media terms, the basis for DRTV is remnant airtime on linear TV. Channels competing for advertising dollars don’t always sell out of all of their top-tier inventory and are thus willing to sell valuable airtime at a fraction of what premium advertisers pay- sometimes 80 percent less. These aren’t just fringe channels, but also premium, first-rate channels and networks delivering first-rate content to the masses. The networks offer this media at such deeply discounted rates because there is no audience guarantee liability associated with the airings. Because DRTV represents last minute, unsold inventory, marketers also gain the advantage of longer creative lengths that can extend from 60- to 120-seconds. This offers advertisers ample time to create interest and tell their brand story in the most compelling light, inspiring customers to learn more or purchase across their preferred retail channel. In short, DRTV can have an indelible impact and a long tail effect when consumers encounter your product in the retail aisle.
The second driver of overall DRTV campaign efficiency is the virtually real-time revenue from direct sales that creates an immediate return on advertisement spend (ROAS). These direct channels can include web, telephony, and marketplaces such as Amazon. Direct revenue, often measured in terms of a Media Efficiency Radio or MER (direct revenue divided by direct media spend), can offset advertising costs, and, in the best-case scenarios, generate a cash-positive marketing effort with an ability to scale enormously. Even campaigns that don’t achieve cash flow positivity can still justify increased media investment as these direct revenues further discount the cost of remnant rate media, further widening the efficiency of DRTV to traditional spot advertising.
Thirdly, DRTV drives efficiency throughout a brand’s entire marketing funnel; highly-qualified top-of-funnel offline consumers are more likely to engage with a DRTV-driven brand at every step, leveraging hard-won Amazon reviews, expensive PPC placement, and driving large volumes of remarketing-ready traffic through direct and organic site traffic.
Insight #3: Nothing Tells a Story, or Sells, Like a Long TV Ad
All advertising mediums have their limits creatively, but an audio/visual story given enough time to develop is the most compelling advertising format yet. Compared to traditional 30-second TV spots, display, print, or even radio messages, 60- to 120-second DRTV ads allow consumers to actually see what the product does over a trusted medium. Effective DRTV advertising allows prospects to emotionally engage with the most relevant attributes of a product or brand, moving from awareness to consideration to purchase intent in the same advertising message.
It’s essential for retail-focused DRTV advertisers to recognize that for every customer who purchases via DRTV, there are hundreds of other qualified customers won over by the message that will respond on their own terms; customers that are likely to convert the next time they encounter the product on-shelf or online. This is the audience that drives sell-through sky-high. It turns out that a well-qualified shopper who’s aware of your brand’s unique selling proposition and peppered with product knowledge is your best candidate to buy off the shelf.
Today’s consumer walking the aisles of a big box, mass, or specialty retail store are largely on their own to make decisions about what to put in their shopping carts and what to pass on. DRTV fortifies them with knowledge so that when they do discover your product in the retail aisle, they may have a vague or even vivid idea of what it has to offer them. DRTV’s ability to tell a story helps marketers breakthrough clutter for mindshare and retail shelf space that manifests itself in manifold sell-through.
Insight #4: DRTV offers flexibility
The performance nature of DRTV compliments another important facet of the medium: its inherent flexibility and ability to scale. Hundreds of local, regional, and national cable channels are competing for DRTV marketing dollars, and nimble DRTV agencies can have marketers on- or off-air completely within a few days; can trim or boost their advertising schedule on a daily basis, and when the time comes, turn up the volume at an astonishing scale. Best-of-breed DRTV marketers have been known to spend tens of millions a year against a single winning creative because the return on advertising spend warrants their tremendous scale.
Ultimately a brand’s success at retail isn’t a matter of mastering a handful of effective marketing channels, but educating and empowering large volumes of customers to make their purchase choice through effective broadcast advertising messaging.
DRTV’s unrivaled ability to deliver value, in terms of long-term consumer demand, is far greater than the immediate direct revenues, but measured in the sum of the influence made at each step of the marketing funnel, and ultimately in the store aisle.
The simple economics are undeniable; DRTV’s efficient media cost, effective storytelling capacity, ROI-positive impact across all channels, and vast scalability make it the most powerful lever a retail-focused consumer brand has in its toolbox.
About the author: Peter Sengenberger is a DRTV growth expert with 20 years of experience scaling D2C brands in North America, Europe, and Asia. Clients include WayFair, Beachbody, Shark/Ninja & Sharper Image. He lives with his family in Salt Lake City. Peter can be reached at (503) 560-7148 or via email at firstname.lastname@example.org.