Why Direct Response is Thriving in Today’s Economy

(As published in the May 2009 issue of Response Magazine)

We all remember when the dot-com bubble burst shortly after Y2K. It was a time of panic for some and opportunity for others. Today’s economic environment is not unlike the instability experienced at turn of the century. With major national brands cutting costs due to sales declines, advertising is often times the first line item on the P&L to get cut. However, for some products and service companies, this is the ideal time to look for opportunities that will deliver a competitive advantage and possible gain in market share through cost effective advertising.

The key to succeeding in an unstable economic climate is to spend your money wisely. Ensure you are investing in the vehicles most likely to generate the highest value and return on your investment (ROI). The media environment is more fragmented now than ever before. Delivering the message to the right channels is critical. Direct response marketers have an advantage in this marketplace because we buy media based upon pure ROI. We see the results of that media down to each spot and program, print ad or online buy. We know what the media unit is worth and we’ll negotiate based on the results. If response is down 20 percent, we are quick to renegotiate immediately.

Effective media buyers take swift action and are not complacent. A substantial benefit to using direct response in tough times is lower media cost, but more importantly, it is critical to track response. Response can be tracked at retail, online and through the use of 800 numbers in TV or print ads. If you do not have the ROI you need, recalibrate front-end offers, creative and back-end offers to help lift profitability. In rough economic times, many general rate advertisers pull out of the marketplace leaving high-profile availabilities for direct response advertisers to capitalize on. Now is the time for direct response advertisers to benefit from these high-profile opportunities, which are simply not available to them in a strong economy.

Direct response is not for the faint of heart. Advertisers must understand that all advertising efforts, even if goals are not met, are valuable due to the key learnings they metrics are key elements of success and failure. If you’re not going to measure results, why spend the money?

Direct Response Accountability

It was evident across all media that 2008 billings from traditional advertisers experienced a decline, however the direct response sector actually increased in a down economy. Why? Accountability and the ability to react quickly to your developing sales trends! With the right analytics in place, you can act swiftly to take advantage of media opportunities aimed at optimizing sales in a very short time frame.

On the flip side, if we see marginal or no success to the messaging, we know the product or creative did not resonate with consumers, so we work with our clients to reconstruct the creative messaging, or create new offers that might make consumers more responsive. If that doesn’t work, we start over or move on to the next project thus minimizing our client’s out-of-pocket risk.

Icon Media Direct works with some top consumer brands utilizing a hybrid model of direct tactics coupled with traditional metrics to optimize results-driven consumer response. It’s the combination of measuring direct results and point-of-sale at retail. They go hand-in-hand. The competitive advantage of having intelligence in place and possessing the ability to react quickly is what can save a sinking ship or help ride the highest waves. It’s not enough anymore to rely solely on the traditional model of advertising for many products or services. Not all rating points are created equal and “behavior graphics” is a buzz word that really means direct response. If you see a response, you know you hit the mark and found a responsive demographic. It’s the best of both worlds when you can optimize the combination of diversity, consistency and accountability of your advertising dollar.

The value shopper is savvier than ever: cutting coupons, comparing prices and researching what they can get for the best value; which is especially prevalent in a down economic environment. True as this may be, we have seen premium priced products do very well in this economy because the products offer value in solve a problem, etc.) As the agency for OxiClean for nearly a decade, Icon Media Direct has implemented many strategies over the years flowing with the current consumer trends. OxiClean is a prime example of value for a savvy shopper, as it is the number one product in the laundry pre-treatment category. Consumers understand that the value is not only buying one product that works, but also in its versatility, so they don’t mind paying a premium price for it.

Whether the economy is on the mend or in a time of trial, Direct Response offers the unique ability to stay in touch with the pulse of the consumer. Consumers are ultimately the gatekeepers to a product’s success, avoiding an open line of communication is a recipe for failure. The current climate may be attracting traditional advertisers interested in media savings, but once they experience the infinite value of tracking consumer response to their specific product, you can bet they’ll be using Direct Response for years to come.