Direct Response 101

Direct marketing reminds me of Chuck Norris trying to sell me the TOTAL GYM at 2:00am on a Wednesday morning. It never struck me as an efficient way to communicate with customer and sell them a product or service. Not until I did some research on the subject did I really understand what it fully entailed, and that is when I realized just how effective this form of marketing is.

For those of you who do not know what Direct-Response Marketing is, here is a definition: A type of marketing designed to generate an immediate response from customers, where each customer response and purchase can be measured and attributed to individual advertisements. In this form of marketing, there is no room for middlemen or retailers. That would inhibit the company from determining which marketing technique was successful in attracting business. The main forms of Direct-Response Marketing (or DRM) are the following:
DRTV (direct response television)
Radio
mail
Print Advertising
telemarketing
Catalogues
Internet

Direct response television how Chuck Norris attempted to sell me his TOTAL GYM. The difference between a regular commercial and a direct-response commercial is the company's intention. Let me give you an example. Nike released a new running shoe and they wanted to run an ad on ESPN to promote the shoe and increase sales. The commercial may tell you about the shoe, maybe demonstrate the unique characteristics, and then tell the viewer where the shoe can be found and purchased. Now think of a 30 second ad for the PERFECT PUSH UP. This ad does everything that the Nike ad did, but then they added something extra. They displayed a phone number and/or a email address in which the workout equipment can be purchased. By including the phone number and/or email, it gives the customer a direct line of purchase to the manufacturer. This tactic enables businesses to track where customers purchases and analyze there marketing tactics effectively.

Radio Advertising. Or not?

I am a DJ at Saint Michael's College. As part of being a DJ on campus, they train you on the rules and regulations of being on the air.  There were a lot of them - no swearing and no inappropriate language were obvious, but one of the rules took me by surprise. That rule was "no advertising". The instructor gave us an example: If a band were playing at a venue and you wanted to talk about it, you can say anything you want, except how much ticket prices are and where to get tickets. So all the information you give other than ticket information is not considered advertising. What do you think? Dictionaries define advertising as "

a paid announcement, as of goods for sale, in newspapers or magazines, on radio or television, etc." or "A notice or announcement in a public medium promoting a product, service, or event or publicizing a job vacancy".  So by not being paid by the artist or venue, we are not allowed to tell where to find tickets or prices. This is an interesting logistic to being on a radio station.

SuperBowl Ads

Companies use the Super Bowl as a way to reach millions of viewers by running ads during the most watch sporting event of the year. These ads are so compelling that they can be used to attract viewers to the Super Bowl. With so much emphasis on the new ads for the Super Bowl, why is it so easy to see the "Super Bowl Ads" online days before their television premier? Why would a company want to release the ad prior to event which inspired the ad in the first place?

It is expensive to run ads during the Super Bowl. The average price for a 30-second ad in the 2012 Super Bowl is $3.5 million - the highest average NBC has ever charged.  Airing the ad online would allow them to be seen by more viewers prior to the game. It could build anticipation to see the ad again. M&M has a strategy of building up anticipation for the debut of Ms. Brown, the newest member of the M&M crew. She has a twitter account and tweets frequently. She has built a large following of anxious fans who can not wait until the unveiling of her during the game. This is a way for M&M to attract viewers to the game and ads who normally would not watch the event on live television.

It will be interesting to see where Super Bowl Ads go in the future. In 1985, ads for the Super Bowl cost companies $1 million for a 30-second ad (adjusted for inflation). That is an increase of 200%.  NBC does not sell more ads, so they chose to raise the price for them in order to maximize revenue. But who can blame them? If the companies are willing to pay, why not charge them more. Running a Super Bowl ad has become a level of stature for a company. Does your company have enough revenue to support a $3.5 million 30-second ad? That exceeds the yearly advertising budget for most companies in the United States, let alone for a single ad. Economists predict that the price of ads could double in the next 10 years, but only time will tell.