Electronic Retailer - February 2012 - (Page 49)

BY DICK WECHSLER Supporting Retail: Is This the Answer? CHANNEL CROSSING: DRTV Here’s one big question often asked by many direct response television marketers: How much advertising do I need to run to support retail? This is a tough question to answer because retail support often occurs after a successful DRTV campaign has enjoyed its greatest scale and efficiency. Scott Boilen, president of Allstar Marketing once explained that the company advertised Snuggies to support retail sell-through. Scott admitted that they didn’t know how much to spend, but that they erred on the side of spending more, rather than less. They simply didn’t want too little advertising to be the cause of poor sales. Whether or not the advertising had an impact on sales remains unknown. Recently, we’ve been working with a marketer interested in learning if and how much media was needed to stimulate retails sales of a product that enjoyed broad retail distribution, no brand awareness and that had never before been advertised. In other words, we had the opportunity to understand the direct impact of advertising on retail sales. Here are the significant learnings: 1. The results were immediate! Advertising started on Day 1 and sales jumped on Day 1. 2. Sales improved dramatically and equally whether a 60- or 15-second commercial ran. It’s important to note that in this case, product benefits could be completely communicated in a 15-second spot – no easy feat. 3. Far less media weight than expected was needed to increase sales. The results of this test run against prevailing convention and may provide an empirical foundation from which to answer the question, “How much media is necessary to support retail for a DRTV product.” For example, a packaged goods company like Procter & Gamble would support a brand with 150 gross ratings points (GRPs) a week. It likely would target women 35-64, so it’s really a targeted ratings point (TRP). Each GRP or TRP represents 1 percent of the TV audience. A company like P&G might run the campaign anywhere from three to 10 weeks. If each TRP for a 30-second unit costs $7,000, the weekly budget exceeds $1 million. That is too rich for even the most successful DRTV advertiser. What we learned with this recent test is that an effective media spend might be significantly less and prove to be reasonable for many DRTV advertisers. There are, however, two variables that need to be pointed out. The first is that this is a great product. People really like it. The second is that the creative is clear and compelling. No amount of media is likely to help an undesirable product with ineffective creative. The test looked specifically at the impact of commercial length and media weight on retail sales for this product in specific markets as compared to the national average at that same time. Daily sales data came from Wal-Mart. Flight One involved running 50 TRPs a week in three markets with a 60-second unit. Almost immediately, daily sales of the product in Wal-Marts in these markets exceeded weekly sales in all other markets. In fact, stores in these markets ran out of inventory. The planned three-weekly media flight was canceled after two weeks because of too much success. Flight Two involved running 25 TRPs a week in one market with the same 60-second commercial. Weekly sales in Wal-Mart stores more than doubled compared to the national average. Flight Three included running 25 TRPs a week in one market with a 15-second commercial. The results were identical to the second flight. Sales in Wal-Mart stores more than doubled compared to sales in WalMart stores that received no advertising support. Can 25 TRPs a week with a 15-second commercial effectively support retail for a DRTV product? If the commercial were clear and compelling, this test would indicate yes. The fact that the weekly cost of media would be $43,750 compared to P&G’s $1 million makes the findings of this test all the more interesting. The nature of local broadcast media is another factor that needs to be considered. It’s easier to achieve share of voice in a local market than it is to do so nationally. And the ABC, NBC, CBS, Fox and independent stations that make up local buys, reach a different audience composition than national cable networks. The key, when applying the local lessons nationally, is to make every effort to replicate the day parts and media types used in each local market cell. That means including syndication and broadcast networks into the media plan. So, “How much media is necessary to support retail?” According to a test we just completed, 25 TRPs a week with either a 60- or 15-second commercial, just might do the trick. Dick Wechsler is president and CEO of Lockard & Wechsler. 49 February 2012 | electronicRETAILER http://www.electronicretailermag.com

Table of Contents for the Digital Edition of Electronic Retailer - February 2012

Calendar of Events - Upcoming Industry Events February through May
Your Association, Your Bottom Line
Industry Reports - Connect, Collaborate and Discover with MyERA
FTC Forum - Where the FTC Says Facebook Went Wrong
eMarketer Research - Who is the U.S. Hispanic Market?
IMS Retail Rankings - The Top 25 Shows and Spots
Jordan Whitney’s Top Categories - The Top 5 Shows and Spots and the Top 3 Categories
Lockard & Wechsler’s Clearance & Price Index - Index for 30, 60 and 120 Seconds
Ask the Expert - Who Says Kids’ Products Don’t Sell on DRTV?
From the Executive’s Desk - Create the Complete Package
DR Disruption
Bienvenido a Miami!
Interactive TV: Just a Click Away
What Your Consumer Says About You Matters
Guest Viewpoint - For Hispanic Vote, the Campaign is On
Guest Viewpoint - Own Your Own Online Media
DRTV - Supporting Retail: Is This the Answer?
Fulfillment - Are You Delivering a Great Customer Experience?
Teleservices - Stop Losing Thousands of Leads
Member Spotlight
Advertiser Spotlight - Highlighting This Month’s Advertisers
Bulletin Board - DG and Discovery Launch Digital Distribution System
Advertiser Index
Rick Petry - MINI Me

Electronic Retailer - February 2012