Traditional or mainstream TV is a powerful medium. An estimated 100 million households in the US watch the four major networks. But traditional TV tends to deliver measurable advertising results only for true mass-market products—in part because you need about $15 million to begin even the smallest mainstream TV campaign.
Cable TV, on the other hand, is a powerfully viable alternative, delivering much higher ROI on much lower budgets in a national campaign. With cable TV, significant impact can be seen from as little as $500,000 in media spending. Why?
- Specialized audiences have emerged from "topical networks" like Speed Channel, Oxygen, and more. This opens a golden opportunity for niche products to reach the viewers who want to know about and, more important, buy them.
- The large number of cable networks (100 and growing) means you can get superb media deals with emerging networks—if you negotiate the right bargain.
But, to get high impact with small budgets on cable TV, you need to change the way you plan and execute TV campaigns—to include response measured advertising. Because only measuring consumer response to your advertisement will ensure that you're reaching these specialized audiences in a cost-effective way and getting the best deals on cable TV media.
In other words, you need to combine traditional planning methods with Direct Response Television (DRTV). In fact, relying on response measurements can increase impact (ROI) per media dollar by 4-10 times—using that $500,000 budget to deliver equivalent impact of $5 million spent through traditional media planning.
Three Myths
Why? Three key myths still persist in media planning that affect your ability to maximize cable TV ROI. It's important to understand these myths, and the truth about them, if you're to take advantage of cable's potential:
- Myth #1: "Brands can only be built around traditional advertising."
Truth#1: Direct Response advertising is a very cost-effective way to create and build a brand—whether you decide to just generate leads or to generate sales as well. Experience shows that a targeted DRTV campaign is highly effective at building brand recognition. Plus, while you are generating visibility, you can also generate sales that impact your bottom line with a higher ROI. In fact, cable TV provides the most cost-effective brand medium in television today.
- Myth #2: "You can use Nielsen data with cable just like you can on major networks."
Truth #2: A tremendous amount of cable TV falls into the "too-small-to-be-measured" category. Reliable Nielsen data is available only for the large cable networks and often only for primetime programming. However, many of the best deals on cable are on smaller, emerging networks with audiences too small to generate significant Nielsen ratings. Unfortunately, many traditional agencies make the mistake of taking whatever numbers they can find about a given network and providing them to clients without knowing whether they're valid. Measuring response ensures that you know what impact you're getting from your media.
- Myth #3: "A 'hot' cable show has a massive audience."
Truth #3: Cable audiences are smaller than you might think. Even the hottest shows have relatively small audiences. For example, the popular "American Chopper" typically has an audience of less than 800,000 (compare this with 13 million viewers for "Survivor"). This is good news for niche advertisers. Smaller channels comprise viewers who are actively interested in the subject matter, and therefore more likely to purchase related goods and services. Plus, smaller channels are hungry for ad dollars, so they are more willing to negotiate very favorable terms. In fact, it is the small—and specialized—nature of the audience that makes them an attractive DRTV outlet.
An Example
Here's how we delivered an impressive ROI for DuPont's newest Teflon nonstick coating.
DuPont's Teflon coating can be seen as a "Kleenex" product that buyers take for granted. So DuPont needed to reignite consumer interest and make their products distinct from other nonstick surfaces.
In 2005 we delivered a DRTV campaign to DuPont highlighting cookware coated with its newest product, Teflon with Radiance Technology. Traditional media planning demographics indicated that Home & Garden and Food network should be primary in our media plan. However, after we put it on air, we watched the volume of phone calls and saw that Home & Garden and Food shows were 4-8 times less effective at moving consumers to action. This is in part because of the premium charged by the national channels and in part because traditional demographics can't show whether the consumers who watch are purchase-ready. It turns out that many more cookware buyers watch Soap Net and Lifetime Movie!
The key to success for DuPont was a coupon-driven campaign for which we combined TV, internet, and retail, because the coupon allowed us to measure the media's effectiveness. The resulting data identified which cable channel generated which level of response, resulting in hard numbers to verify cost-effectiveness. And since DRTV can be purchased on short notice, we were able to change the campaign on the fly to eliminate the media that didn't produce cost effective results.
As a result of this campaign, higher-margin cookware sets—instead of individual pots—became the hot sellers, because the DRTV spot established the uniqueness of Teflon's new surface, and the coupon drove purchases of sets. Even better, our follow-on research showed that a lot more people believed the promise made about Teflon than typically believe promises made in traditional brand advertising.
Next Steps
You can use cable TV to deliver tremendous impact for a new range of specialized products. But you must plan carefully and use direct response to tweak your media buy to get the biggest possible impact.
If you have a product that would benefit from the broad national exposure of TV but a limited advertising budget, here are some "next steps" to start down this path:
- Conduct research to be sure you know what's distinctive about your product—what makes consumers buy it.
- Look for innovative ways to generate measurable response, including coupons, information packages, or even selling the product on TV. And, of course, deliver this in a great creative campaign.
- Track those responses and use those measurements to adjust your media buy. Or, partner with an agency that knows how to do so.
Then sit back and watch the profits roll in!
