Reprinted from Retailing.org Magazine

One of my clients put it this way.  In today’s economy, he said, there are two kinds of smart advertisers:  those who are using DRTV, and those that wish they were.

Indeed, direct response television (DRTV) has been a growing trend for more than 10 years and shows every sign of continuing. More and more companies are discovering that it allows them to reduce the cost and risk associated with bringing new products to market, and then to improve the reach and effectiveness of their advertising once they are there.

DRTV Defined

The concept of DRTV is fairly simple. Obviously, it uses television, the world’s most powerful medium, with its ability to instantly reach millions with the unequaled impact of sound and moving images. But it directs that power within the discipline of direct response, a century-old marketing strategy that doesn’t rely upon traditional retail stores and distributors to make sales. Direct response ads are designed not to drive customers to stores but to make them respond immediately and directly to the advertisements themselves.

How DRTV is Better

How is DRTV different from traditional TV advertising?  Well, in regular TV advertising, you see short :30 messages that the advertiser hopes will make you notice, remember and think positively about his particular brand of beer, bank, cereal or what-have-you. In a DRTV ad or infomercial, which is usually two to sixty times longer, you’d get all of that, plus a harder sales pitch, details on a specific offer, and the opportunity to “Order Now”!

Since 1984, the percentage of DRTV advertising on television has mushroomed. Critics may say that this rise in infomercials has meant a decrease in the quality of television in general, but most marketers see it differently. Quite simply, they believe DRTV has opened up the marketplace.

Directing actors

Traditional Retail

To illustrate their point of view, consider the plight of an entrepreneur in the days before DRTV. Even if he had truly invented the better mousetrap, he faced truly Herculean obstacles before he could effectively sell it.

First he’d have to finance and complete the manufacturing of, say, 50,000 units. Then he’d have to line up a network of distributors to warehouse and ship. Next, he’d have to convince the buyers at a handful of retail giants to give (or even rent) him shelf space to try his product on what was essentially a consignment deal. Part of this negotiation would often include the marketer promising to give the retailer co-op advertising money, or even run a multi-million dollar ad campaign.

The marketer would have to ship his product to hundreds of individual stores. He’d have no control over where the product was displayed or how or if it was explained by clerks. When his advertising ran, he’d have no idea if either his message or his media buying was effective. All he could do would be to hope.

If the product sold, the marketer would have to manufacture and ship more, which would mean another round of financing. He’d be short of cash, you see, because he’d have to wait six to nine months before the retailers, distributors and other middlemen finished their accounting and actually sent the marketer his first actual payment.

If the product didn’t sell, our poor marketer would have to take all of it back. He’d even have to pay for the shipping.