The Unification Theory

With some notable exceptions, the marriage between TV and web commerce has yet to solidify, at least when it comes to most major brands. But trade group the Electronic Retailing Association and Jack Kirby, the association’s Board chairman since September 2003, are out to change that.

With long experience in direct TV and an understanding of the web’s possibilities, Kirby has a vision of something quite different, a world in which the Internet and direct response TV would routinely harness each other’s strengths in the cause of consumer marketing. “People don’t view themselves as a web consumer, a TV consumer, a radio consumer or a catalog consumer—they just see themselves as a consumer,” Kirby says.

Boosting its outreach

Accordingly, the ERA, historically focused on direct TV marketing, is now boosting its outreach to Internet retailers with efforts such as expanding programming geared toward web retailers at its annual and spring conferences. In the same vein, it’s increasing data specific to web retailing in its annual marketing research study slated for release in April.

ERA is turning up the volume on the fact that it supports a strong government affairs effort on issues of interest to web markets, such as spam, privacy, and Internet taxes. A new membership director has prioritized expanding membership among Internet as well as radio direct marketers, and the ERA is seeking to help that along by creating the category of affiliate membership for members of allied professional organizations, something it’s discussing with several trade groups. Meanwhile, it’s actively pursuing Internet companies such as AOL, whose interactive division joined in November.

So what possibilities does the world of direct response TV and membership in an industry group most often associated with infomercials hold for Internet retailers? Sharing knowledge and integrating capacities equals more marketing power for both sides, says Kirby. “TV is a powerful and emotional medium that has great reach. The web has great depth and speed to create a transaction, and it’s convenient. If you can marry them by driving traffic back and forth between them, you have one plus one equals five,” he says. “Marketers who use different mediums have a lot they can teach each other.”

Kirby cites three overlapping trends as the basis for the rise of electronic commerce in all its forms. The first is technology, starting as far back as the telephone. “People got a catalog in the mail, and they could call a toll-free number to order. Twenty-five years ago with the Home Shopping Network, people had a television set and a telephone with which they could order. That was electronic commerce,” he says. “It’s gotten a lot more sophisticated since then and the web in the ’90s was the next wave of it.”

Consumers have adapted to those developments, making the changing patterns of consumer behavior a second trend that is helping to develop electronic commerce. The increasing diversification of media is a third trend that feeds into electronic commerce as marketers try to connect with consumers across a wider network of media choices they can dial up or tune into.

Opportunity knocks

The mainstream convergence of Internet and TV marketing may seem a long way off to web marketers more focused on the day-to-day struggle with the bottom line. But through his career, Kirby has demonstrated a knack for recognizing when opportunity is knocking while others are still trying to figure out who’s at the door.

After starting professional life as a TV news and radio talk show producer with tours of duty on CBS Night Watch, the Larry King show and the Charlie Rose Show, Kirby moved into TV program development. At a TV station in Santa Barbara, Calif., in the late 1980s, he got acquainted with some early direct TV marketers who were using the station’s facilities to produce infomercials. To the forward-thinking Kirby, the concept of using TV to sell directly to consumers was an answer to a rising trend that was starting to cut into spot advertising revenue: media fragmentation that was diluting the ad revenues to be generated from any single outlet.

While he grew up watching five TV stations in his hometown of Boston, by the time Kirby reached Santa Barbara, the TV channel universe numbered more than 60. “Today we’re in a 500-channel universe with digital satellite broadcasts,” he adds. “The web exploded in the mid 1990s, and radio has always been diverse because of the many formats that exist. Media is fragmenting, and it’s going to be harder as a broadcaster or cable caster to make money in the future unless you can figure out a way to take viewers and turn them into customers.”

The unique ingredient

Kirby signed on to bring his TV production experience to the infomercials, launching a business that he sold to National Media Corp., a global direct response marketing company, in 1995. Eventually he became that company’s president and later went on to head up HSNi, the interactive division of Home Shopping Network, where he played a major role in building HSN.com. He currently is CEO of direct marketing company Continuum Commerce.

Guide to E-Commerce Technology

While companies like HSN and QVC have been interactive for decades via telephone and television, the web brings something new and unique to the marketing mix, Kirby points out. Unlike time- and space-constrained TV, the web can provide expanded information to answer any of thousands of questions a customer may have about a product or service. “When you are driving traffic to a specific web site, but using the conventional medium of the day, TV, to do it and create commerce at the site, it’s very powerful,” he says.

Powerful, as in cost effective, for unlike brand advertising on TV, direct TV commerce—if it generates traffic and sales—can pay for itself quickly. While purchasers of conventional TV spots must wait for the quarter or even the year to learn if campaigns are driving results, direct TV provides an immediate read. “Direct-to-consumer television advertising is the most cost effective form of TV advertising because if you do it right, it’s self-liquidating,” Kirby says. “Week to week, as you see what is working or not working, you can adjust your media spending strategy.”

A 30-minute infomercial may cost $150,000 to $200,00 to produce on the low end and $700,000 to $800,000 on the high end. Though infomercials are still an industry mainstay, direct response TV has expanded beyond them to include other formats, from as short as a one- to two-minute spot to what Kirby calls “transactional TV” in which a conventional TV show such as a soap opera sells the apparel or jewelry worn by characters in the show.

Though it’s moved beyond its early roots, recollections of some of those early late-night infomercials, cheaply produced and hawking merchandise of questionable value, hang over direct TV today, one possible reason that more of the established, traditional brands haven’t yet rushed to embrace it and hook it up to their web sites.

That’s an issue Kriby tackles head-on. “You have good infomercials, bad ones, some that can look like a great work of film and others that look pretty cheesy,” he says. “To indict an entire form of marketing because there are a few people who have done less than stellar infomercials in terms of their production values is silly. It’s a lost marketing opportunity.”

Attracting mainstreamers

The opportunity is not lost on some big marketers. Dell has sponsored programming on QVC to drive traffic to both its web site and its 800 number, while audio manufacturer Bose sponsors programming on ShopNBC. At Internet retailer Buy.com, plans to add a direct response TV component have been in the works for more than a year, the company confirms.

The Sharper Image took the plunge into direct response TV on its own five years ago. Though it started cautiously in 1998 with an initial half-hour show for which production and the media buy combined cost in the low six figures, Sharper Image has since become a major buyer of direct response spots 30 minutes and shorter across outlets as varied as CNN, the Discovery Channel and even the Weather Channel.

With catalog and online advertising a more targeted endeavor, COO Tracy Wan says Sharper Image pursued direct response TV because of the medium’s broader reach. “We were really well positioned to take advantage of this advertising medium,” Wan says. “The first product we launched was a proprietary Sharper Image design. It was unique in the marketplace, we had a good margin structure to support it, and with our three-channel selling strategy—stores, catalog and Internet—it made sense.”

The TV spots promote sales at all three channels, and Wan is satisfied the web gets its share. But she says getting to that point took effort and staying there requires of Sharper Image the same “relentlessness” it puts into quality control for all the other forms of advertising it does. “There are different types of infomercials,” she says, admitting that the existence of some poorly-done examples initially caused some at Sharper Image to cringe at the prospect. “Going in, you have to take the time to communicate your objectives on quality in the creative. The room settings and the customer testimonials in our TV infomercials are very stylishly done, so if you saw it, you would think that could be my living room, my child, my situation.”

While these brands and others have experimented or plan to experiment with direct TV, their numbers are as yet small. That doesn’t mean other brands and other Internet retailers aren’t watching the space to see what happens, but many are busy balancing other demands. “Direct response TV of the type that HSN or QVC does is a very different from of direct marketing,” says Carl Rosendorf, CEO of 4-year-old pure-play Internet discount retailer SmartBargains.com, which does no direct response TV and isn’t currently planning to. “A company like Sharper Image has a lot of catalog experience and they certainly may be applying that experience to direct response TV. Many companies will be successful at it, and many won’t. A lot will depend on qualitatively, how they go about it. Just because you are good in one, you may not necessarily be good in another; you have to develop the skill sets for the different mediums.”

Consumers decide

Kirby is hardly the first to say that marketers today need a presence in multiple sales channels, but he’s among the first to seek to expand the definition of must-do multi-channel marketing into direct response TV. “Consumers will decide how they want to reach you as opposed to the other way around,” Kirby says. “So you have to surround them with the same marketing message and make the product available to them through all channels of distribution.”

It’s his hope that web marketers and TV marketers will come to see themselves and their respective media as part of one continuum, and making that case to web marketers will be a priority at ERA in the time ahead. “If you’re doing business on the web, you already have that communication going,” he says. “Why wouldn’t you want to extol the benefits of your product line on TV? And why wouldn’t you want to have a response mechanism, and drive customers to your web site?”

mary@verticalwebmedia.com