Sunday, July 11, 2004

Lights, Camera, Company

Direct Response TV has come a long way since infomercials

By Cliff Peale
Enquirer staff writer

Anne Chambers is the CEO of Red, a Woodlawn company whose growth is being driven by Direct Response Television. She bought the company, then called Redna Productions, from Procter and Gamble three years ago.
Steve Cates, first camera assistant, changes the lens during a commercial shoot in Wyoming for Red. The company produces commercials and helps analyze the feedback.
The ad is direct: Six Greater Cincinnati women touting the benefits of Procter & Gamble Co.'s Olay Regenerist.

At the end, a narrator urges viewers to call a toll-free number for a $3 coupon for the skin-care product.

It's not exactly the long-running late-night Ginsu knives commercials, but the method, called Direct Response Television, is essentially the same. And a quarter-century after the first of a generation of direct-response commercials started running, it's driving the growth strategy for one small Woodlawn business.

"This is really our niche," said Anne Chambers, owner of the 15-employee company, called Red. "I think we've really helped to drive that evolution."

While the cheesy 1970s ads and home-shopping channels have drawn plenty of late-night satire, nobody's laughing at direct-response anymore. It drove more than $90 billion in sales last year, according to trade group Electronic Retailing Association.

Direct-response advertisements generally are longer than the traditional 30-second television ad. The Regenerist ad, which Red produced, was four times that long. At the end, the ads always call for action by the viewer, usually through a toll-free call or a Web site.

"Their great advantage is that longer form," said Bill Westbrook, owner of a Virginia consulting company that has worked with Red on the direct-response channel. "This agency does it well. The history of direct-response television is doing it not well. It's not filled with great, shining moments of creativity."

While the old ads were mainly low-budget product demonstrations, the new ads are filled with testimonials from happy consumers.

And more and more, big-time marketers such as P&G are looking to take advantage.

That's the trend Chambers hoped to tap three years ago when she bought Red, then called Redna Productions, from P&G.

Under P&G, Redna Productions mainly shot demonstrations and corporate videos. Chambers is trying to broaden the business to more of a full-service agency specializing in direct-response business.

She's even starting to spread beyond Procter, doing production work for consumer-products companies including Sara Lee Foods, Hamilton Beach and Alcoa.

In the three years since she bought the company, Chambers says she has more than tripled sales and employees. While she wouldn't reveal revenue numbers, she said Red was not profitable when she bought it from P&G but has passed the break-even point now.

Red doesn't just produce the commercials but helps write the strategy that leads to them and analyze the feedback from consumers and the resulting media placements. The business model is simple: Marshal creative and account resources and provide a one-stop shop for companies for all production work but outsource the production talent.

'They know what to do'

Set in the middle of an industrial park, Red's Woodlawn building can house shoots in kitchens, bedrooms and bathrooms, many shot by independent producers.

Companies such as P&G love the direct-response commercials because they can measure the impact, in both numbers of calls and product sales. Red is one of a handful of Procter's direct-response agencies.

"What we do is try to define the return," Chambers said. "We believe we are delivering quality-aware consumers. We believe they are really big believers. When they get to the shelf, they know what to do."

One demonstration last fall was another P&G brand, Mr. Clean AutoDry. Red designed a commercial that ran for four months with no other form of advertising for the product. The ad sold tens of thousands of the Mr. Clean kits, Chambers said.

She calls it Brand Response Television.

Whatever you call it, it's getting bigger, said Barbara Tulipane, president of the trade group Electronic Retailing Association. That's because it's measurable, she said.

"You're not just putting an ad up there," Tulipane said. "You know, either by the number of hits on the Web, how many people get the coupon, or how many people pick up the phone."

There are several other differences in using direct-response. For example, marketers mostly buy "remnant media" from cable operators instead of paying the up-front network rates that are the highest in the industry. That way, it can switch station buys week-to-week and find its target audience.

Red's business also fits neatly into the trends at P&G, which is trying to find more ways to communicate with its mostly female target audience rather than relying on the 30-second television commercial.

Chambers, of course, knows that. And that led directly to her decision to buy Redna Productions just as the unit was being forced to compete with other bidders both inside and outside P&G for production work.

"We really didn't want to be a traditional agency," she said. "We wanted to do other things. And we thought it could be much bigger than it was."


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