Q&A: Hawthorne Direct's Tim Hawthorne Comments On Future Of DRTV
Tim Hawthorne, founder chairman and executive creative director of Hawthorne Direct Inc., is often referred to as the father of the modern infomercial. DRTV News Weekly's Sarah Littman asked him to gaze into his crystal ball to predict what lies ahead for the DRTV industry.

DRTV News Weekly: May 15, 2006
By Sarah Littman

Q&A: Hawthorne Direct's Tim Hawthorne Comments On Future Of DRTV

Tim Hawthorne, founder chairman and executive creative director of Hawthorne Direct Inc., is often referred to as the father of the modern infomercial. DRTV News Weekly's Sarah Littman asked him to gaze into his crystal ball to predict what lies ahead for the DRTV industry.

What are some of the biggest changes you've seen happen in the direct response television business in the last five years?

First, DRTV is gaining more acceptance among brand advertisers and the Fortune 500. Not so much in long form -- infomercials -- which still suffer from the "Popeil" effect, but definitely in short form (60- and 120-second) commercials. Every day, we see more DRTV commercials from brand advertisers promoting two-step, lead-generation offers for consumer product goods, automobiles, computers, banking, insurance, investing, nonprofit associations, pharmaceuticals and travel. And brand advertisers are using discounted DRTV media rates to make their media budget go much further.

Second, consumers have become smarter and more jaded about new products from non-brand name entrepreneurs. I'm amazed there continues to be such a strong market for fitness gadgets. Every garage in America has to have at least two ab machines collecting dust. Yet, the big six motivators -- quick, easy, greed, new, fun and vanity -- continue to fuel the one-step DRTV marketplace.

Third, the Internet is no longer an afterthought. Every DRTV commercial includes a URL along with the toll-free number. Internet orders have gone from averaging 3-5 percent to 20-50 percent. Some DRTV commercials drive as much as 70 percent of all orders to the Internet.

Fourth, backend services need to be best of class to increase the odds of a long form infomercials' success. Telemarketing scripts and service can make the difference between success and failure. We've seen the effects of adjusting telemarketing scripts increase sales by 30 percent. And using the right telemarketer can increase sales by as much as 20 percent.

Can you give examples of how some of your Fortune 500 clients are successfully using DRTV to their advantage?

Nissan realized that its share of the female market lagged that of its two major competitors, Honda and Toyota. This was a problem because in 80 percent of car sales, women make the decision either alone or with husbands, of what car to buy. Nissan wanted to increase the number of women who chose to buy an Altima. We created a storymercial called "The Art of Buying a Car," which helped women feel comfortable at a car dealership by educating them about the process and the right questions to ask. Leads were generated by viewers calling an 800 number for the special "How to buy a car" package. Potential customers could also get a package at a local Nissan dealer.

The infomercial was tested in Dallas and Phoenix and resulted in a cost-per-lead of less than $20 -- a record for Nissan. More than 12,000 "How to buy a car" packages were picked up at Nissan dealerships and 312 automobiles were sold in the two test markets, giving Nissan gross revenues of over $6.2 million.

In 2005 Evinrude launched a 20-week DRTV campaign called "The Six Challenges," with the goals of giving its new E-TEC engines a dramatic introduction, driving dealer traffic and sales, capturing leads at low CPLs and elevating the brand by demonstrating E-TEC's superiority over competitors' outboards. We created a compelling story with high production values and a high-value offer -- $1,000 discount -- with the result that the 14-week long-form beat CPL projections by 40 percent and the six-week short-form beat CPL projections by 65 percent.

For one of our clients marketing -- a brand name prescription drug -- a copy test of our two-minute DRTV commercial versus existing brand 30- and 60-second spots revealed that DRTV demonstrated lift in believability by 18 percent, enhanced brand recognition by 22.6 percent, persuasiveness by 37.5 percent, enjoyment by 37 percent, informative by 41 percent, engagement by 55 percent and trial Intent by 20.7 percent.

What are the biggest challenges facing DRTV advertisers today?

DRTV is threatened by the divergence of video platforms (TV, Internet, video on demand, mobile) and emerging TV viewing habits. As more viewers take control of their viewing content via VOD or DVRs, how will advertisers entice consumers to view their commercials, whether brand or DRTV? I believe the average volume of commercial content viewed per person will soon take a precipitous drop.

It's certainly probable that EPGs will list specific infomercials in the future, and VOD showcases will have DRTV commercials "at ready" for consumption. But will viewers elect to watch them? Some DRTV addicts undoubtedly will. But the majority of our current long form audience comes from the TV channel "grazers." These consumers will disappear when confronted with interactive, VOD technology.

Other ways will be needed to attract viewers to watch any kind of advertising, not just DRTV advertising. No one has figured out all the means of attracting viewers to advertising yet, though we see early experimentation. BMW's mini-films will be a popular device, and certainly earning "coupons" and "TV viewing credits," similar to airline miles, will be implemented. My prediction is that the DRTV product marketers will suffer in this new interactive world, while the DRTV service companies, the ad agencies, media buyers and DRTV producers will flourish.

In addition, DRTV based "nutraceutical" (herbal supplements) products continue to be the hottest, and most dangerous, new category in entrepreneur, non-brand name DRTV. Everyone's looking for the next Propolene or Enzyte. Meanwhile, the FTC, and many of us in the industry, are much disturbed about this burgeoning category, which is rife with unsubstantiated and exaggerated claims.

How can direct response marketers best take advantage of the convergence of digital media and TV?

The Internet is increasingly becoming an important adjunct to the DRTV business even now. It provides supplemental sales, it allows reticent DRTV buyers who may need more info or time to make a considered decision, to graze the Web site. It creates a database of buyers for our clients to further dialog with or create an Internet-based relationship. It is a marketplace unto itself with e-commerce potential via eBay, the client's own Web site or "As Seen on TV" distribution Web sites. And it creates additional credibility for our clients that only "It's in print!" media can do.

While it's DRTV's greatest threat, the new world of diverse video platforms is DRTV's greatest opportunity. I think the golden age of DRTV is yet to come.

Linear broadcasting, the world as we know it now, will be here for many decades. But interactive and VOD TV, whether TV, computer or mobile based, are already being accessed by millions. How will advertisers reach their markets when the TV viewer has complete control of what they view? Advertisers will need to give consumers more value in their advertising messages. Part of this value equation will be providing more in-depth product information in commercial formats longer than 30 seconds (four-, eight-, 12-minute chapters). And these ads will be more accountable with Internet or telephone response mechanisms imbedded. This is DRTV.

Online infomercials create some unique opportunities due to the control and interactivity available to the viewer. The ability to start/stop/replay and even download is unique to online or your TiVo. The ability to choose more information in a number of different choice categories is unique. Both of these are advantages to infomercials online versus offline.

Looking into your crystal ball, where do you see the industry five years from now?

Online and VOD: More infomercials will be going onto the Net and into cable systems' video on demand. This is just the beginning of a strong trend that will see much DRTV migrate to the Internet and VOD over the next five years. Producers will soon begin re-editing their long form shows into multiple chapters appropriate for these new interactive delivery channels.

Mobile: At this point, direct response has not made inroads to the mobile marketplace, but will soon. In fact, general advertising will look like DR, since the majority of mobile ads will have some kind of response mechanism built in. But don't look for 120s, 90s or 60-second ads. Most will be 15 to 20 seconds max. Then press # for more information, or to automatically download a long form commercial to your DVR at home. A complete new lexicon of very short form DRTV will need to be developed.

An example: a DRTV company selling health products might share tips, advice and reviews for their products --- something with real value that may indirectly lead prospects to the actual products. Content that helps consumers right now, while they're in the doctor's waiting room.

True, not everyone will use mobile TV, online commercials or VOD. For the next four or five decades to come, there will be those viewers who'll watch TV the old fashion way, flipping and running haphazardly across DRTV spots and infomercials -- but that's a shrinking market. The DRTV community needs to adapt to the myriad platforms now emerging, or risk a long, slow extinction.

Tim Hawthorne, founder chairman and executive creative director of Hawthorne Direct Inc., is often referred to as the father of the modern infomercial. DRTV News Weekly's Sarah Littman asked him to gaze into his crystal ball to predict what lies ahead for the DRTV industry.