CheatSheet | King Direct

DRTV CheatSheet

If you want to make it in this business, you're gonna want to read this...

DETERMINING IF YOUR PRODUCT IS DRTV MATERIAL

Does your product solve a common problem or fulfill a dream?
Does your product transform your lifestyle?
Does your product appeal to impulse buying? Does it hit hot buttons?
Can the product be easily explained or demonstrated in a visually interesting manner?
Does your product have mass market appeal?
Does your product have a fascinating story to tell about its development and/or use?
Is your product's perceived value at retail 5 times greater than the cost to manufacture?
Is your product an incredible value - a bargain that cannot possibly be missed?
Does the product have the potential for ongoing sales (refills, supplies, etc...)?

If you answered ''yes'' to at least most of these questions then your product might well be DRTV material. The next step is a consultation with a King Direct representative.

UNDERSTANDING THE IMPACT OF DRTV

Over a product's life cycle, DRTV sales typically represent 7%-14% of total unit sales. However, for many new products DRTV will represent over 80% of sales in the first 1 to 3 years of a product's existence or 45% of sales for the same period after initial DRTV launch of an established product.

Impact of DRTV spans past direct results

DRTV can also help open up new international territories at reduced costs. Markets like Canada, The UK and many others are open to DRTV advertising. The availability of a strong performing DRTV commercial also opens up an entire parallel universe of International DRTV distributors who run DRTV media and also distribute to retailers and the multi-channel marketplace in their local territories. Examples include Spin Master (Canada & UK) and Razor & Tie which is currently using the DRTV strategy to expand it’s Kidz Bop® brand in the Canadian market.

Ultimately, for every direct-to-consumer sale, expect 5 to 10 sales in the stores.

For small-medium sized companies, with access to retail distribution, DRTV can solidify retail placement, not only in the related category aisle but also alternatively, in the high velocity As Seen On TV section at major retailers. The DRTV strategy of going on air early (before retail set) can increase velocity and consumer demand. It can also catch the attention of larger companies interested in acquisitions. An example being the Glow Crazy™ brand which launched its DRTV campaign in early 2011 and resulted in almost 100% sell through during the Fall 2011 selling season, was recently acquired by Techno Source (LF Products).

For Medium-Large sized companies with established retail placement, DRTV with its significantly lower media rates can reduce a brand’s advertising to sales ratio (A:S Ratio) and allow media to start before retail set to generate awareness, pent up demand and immediate velocity once the products set. As DRTV can run early in the season, it can result in retailers chasing more inventory within the same season, resulting in significant growth. Spin Master is a prime example of a medium-large sized company that effectively leveraged DRTV for significant growth.

These are how many hours a day a potential client is tuned out to your message if you aren't advertising on television.

THIS IS HOW MUCH YOU'D HAVE TO PAY FOR A DRTV COMMERCIAL

..if you weren't our partner!

So if you'd like to be your own investor, odds are you will need at least $36,000 for your commercial before you take into consideration other costs like a test media budget.

p.s. being your own investor includes when you work with most other agencies as they will have you front these costs.

Sources:

http://www.infomercialdrtv.com/infomercial-production-09_07.htm

http://www.hawthorneblog.com/content/drtv-key-elements-tough-times

http://www.infoworx.com/short_form_spokesman.shtml

http://www.busyboyproductions.com/infomercial-company-drtv-production-producer
http://www.hawthornedirect.com/tim_hawthorne_articles/?post=drtv_fundamentals

http://drtvinfomercial.wordpress.com/tag/cost-of-infomercials/

What other agencies are saying on the internet..

TEST BUDGET FOR MEDIA

''There are two phases to be aware of: test and rollout. Budget $35,000 to $50,000 for an adequate test.''

''After a successful two-to four-week test, roll out aggressively, yet with caution. A strong infomercial can spend the following media dollars in rollout: month one-$250,000; month two-$500,000; month three-$1 million.''

''High priced agencies usually quote media test budgets of $50,000 to $100,000. ''

'' For short form (2-minute spot), media typically ranges from $125,000 to $250,000 for a launch, depending on how much you want to learn about dayparts and networks, and how well you want optimize your call center and digital response. ''

Most agencies will insist on alot of pretty pennies for your commercial. In fact, you'll have to come up with an average of $75,000 for a "test media buy". If youre lucky, you might find a smaller agency willing to do a lower test at around $15,000.

You will find, that between your production and test costs, the bills will be mounting up rather quickly.... and we haven't yet discussed consulting fees or telemarketing fees.

IF we believe your product has what it takes to perform well with direct response we'll partner with you to produce and run your test media buy and set the stage for an aggressive roll-out and growth strategy. You'll get further, faster and for less cost then virtually anywhere else could offer.

Sources:

http://www.directresponseacademy.com/artcl.MsrngPrftblty.html

http://klmediapartners.com/tips.php

http://www.cpodirect.com/world_mediabuy.html

http://www.mediabuyingservice.com/what-is-media-buying.html