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October 30, 2006

Brand Advertisers Enter World of Direct Response, But Still Missing Out

The advantages of direct response advertising are no secret to brand advertisers anymore. According to TNS, this influx has made direct response the fastest growing medium for the last two years.

One clue to this is that the last year of cover stories on the DR industry's leading magazine, Response. Gone are the get-rich-quick cover stories that appeared not long ago. I distinctly remember seeing a cover story about some stress-busting weight loss product and how it's magical "integrated marketing" approach made it a success, only later to find - courtesy of the Federal Trade Commission - that its success was fueled instead by false claims.

To illustrate, here's a list of the blue-chip companies that have graced the cover of Response going back twelve or so months:

September: DuPont (yes, the maker of Teflon that ranks No. 66 in the most recent Fortune 500)
August: Coldwell Banker Real Estate Corp.
July: Lions Gate Entertainment
June: Schering-Plough (pharmaceuticals)
May: Wagner Spray Tech Corp., a wholly owned subsidiary of international painting and decorating giant Wagner Holding Inc
April: Armani
March: Ronco
February: Phillips Medical Systems
January: CNN
December: Gateway Computers
November: MTV

And the list goes on to include Craftsman, Wal-Mart, Vonage, Discovery Communications, and Microsoft.

What are the implications - for the direct response industry - of this influx of brand advertisers who are now "drinking the Cool-Aid" of direct response? Here are two of the more interesting that come to mind:

It means the entry of advertisers with significant sophistication - but in a totally different advertising sphere. They'll bring an influx of discipline, they'll ask tough questions. But they'll also need to be tactfully educated in the direct response perspective. The outcome of this should be positive for all involved - a "hybrid" of the best of both worlds, each pushing the other to greater heights.

It means an influx of more patient advertisers. Deeper pockets, longer timelines. Imagine coupling the power of direct response with the creativity and patience and deep pockets of brand advertisers. The outcome will be fascinating to see. The combination of these elements with DR will mean more experimentation and that will spawn new ways of leveraging the combined power of direct response and brand-building. Already "hybrid" agencies are popping up. They won't be hybrid for long, they'll be the new "integrated".

Typical of these kind of "a-ha" industry evolutions, Television - the most visible medium - is getting the first look by brand advertisers. The power and advantages of direct response radio remain largely undiscovered.

Sure, companies like Dell and GEICO have long embraced radio, but they have yet to turn to a true direct response radio agency to do their work. Too risk averse, perhaps, but nonetheless they haven't really seen what a pure direct response radio agency can do for their business.

Those of us in direct response radio aren't worried. We know what's coming. Radio is an extremely good compliment to DRTV (see our article for specifics on why this is true and how to execute on it). Like any great product, direct response radio speaks (loudly) for itself. Our message to brand advertisers is very simple: don't take our word for it. Test direct response radio and check the results for yourself. The cost and time required are minute compared with TV, and the upside is substantial - just the kind of "risk" that a prudent businessperson would embrace.

Posted by Brett Astor at 12:40 PM | Permalink