Advertising

In a sign that karma does exist, a major business Weasel was sent to prison this week.  Steve Warshak, founder of Berkeley Premium Nutraceuticals (better known as Enzyte - the so-called hard penis people) was sentenced to 25 years in prison.  Warshak, his mother, and several others were accused of bilking customers out of millions of dollars via false advertising and bogus credit card transactions. In fact, they took so much money that they were also fined $500 million dollars in addition to the jail time! 

Viewers may remember the “Smilin Bob” Enzyte commercials that promised to turn every average Joe or Bob into a sexual powerhouse.  Warshak was indescriminate in his dishonesty.  In addition to stealing from customers, he would also refuse to pay his advertising agencies, claiming he was going bankrupt and tying them up for months in court in an attempt to delay and ultimately reduce payment.

It’s always good for the advertising business and consumers when these kind of scam artists get sent away, but although Warshak deserves it I was still a bit suprised at the severity of the sentence.  25 years!  He apparently underestimated how serious men are when it comes to their erections. ”Steve Warshak preyed on perceived sexual inadequacies of customers”, said the Judge when he handed down the sentence. 

One must wonder if there are any disgruntled customers where Steve is going. Perhaps the fact that Enzyte doesn’t work will make prison a less painful experience.   

Next month, for my 15th consecutive year, I will trek to Las Vegas for the direct response television industry’s annual gala, the Electronic Retailing Association convention. I attended my first ERA convention when the organization was in its infancy and called National Infomercial Marketer’s Association. Because the word “infomercial” conjures visions of screaming, steroid-pumped fitness gurus and badly coifed, get-rich-quick pitchmen sitting around pools, the board wisely changed the name. In the early days of NIMA, a couple hundred people would gather in Vegas to argue about juicers, ab-machines and the rising cost of media time. ERA has grown rapidly in size and sophistication, and thousands from around the world now attend. While they still discuss the above, the convention has become a good resource to meet DRTV’s players and service providers.

I have a love/hate relationship with the show, frequently vowing not to go and changing my mind at the last minute. This may have something to do with the location. Though I am pleased to see Vegas abandon ill-advised marketing toward families and return to its seedy, wonderful roots of gambling, nudity and excessive alcohol consumption, I have grown more sedate and don’t enjoy these activities as much as I once did.

Clients often express interest in attending, which I discourage. Though it has interesting vendors and good educational opportunities, it can be bizarre for someone unaccustomed to DRTV culture. Wild-eyed inventors stop you in the hall, begging to rub your leg with a solar-powered, cellulite-reducing wand or encouraging you to drink brown liquid from a filthy coffee mug that they claim will reduce the size of your prostate.

A craziness seems to infect all who attend. Competitive agencies are unabashed about trying to steal clients; they stop me in the hall to pitch my client in front of me. A decade ago I boarded an elevator with a Fortune 100 client when a well-known television pitchman saw his name tag, cornered him and began poking him in the chest, yelling “Stay out of the DRTV business!” For years, a strangely muscular old man known as Doc roamed the convention halls surrounded by buxom girls in bikinis. Clad in a skin-tight leotard like an elderly but fit Richard Simmons, Doc’s goal was to be discovered as the next Jack LaLanne. Jowly, sad celebrities last seen sailing The Love Boat hang out in the cocktail lounges, soliciting gigs as infomercial hosts.

Perhaps the freakiest and best experience is the awards ceremony. Most ad competitions stress creative execution, but the ERA awards tend to honor campaigns that succeeded financially. Winners can run the gamut from “awful but worked” to truly inspired.

Years ago I had two major clients attending the awards, both with campaigns nominated in the Best Corporate DRTV category. The host showed beautiful clips from the spots as my clients smiled, but their expressions turned to confusion as the final nominee’s entry was shown. Their competition was a spot for a new kitty litter box, and the screens around the room were filled with images of cats defecating on a tiny conveyer belt, the innovative system whisking away the offal into hidden poop containers. To my dismay, one of my clients tied with the kitty litter box. But in defense of kitty hygiene, I am told the box sold millions.

I am excited that this year’s awards ceremony features the musical styling’s of one of my favorite infomercial hosts, Esteban. He became famous on HSN and infomercials selling his guitar course.

DRTV has made enormous gains in popularity and acceptance the past few years, and every year the convention tends to reflect this. I suspect this year I am more likely to see major corporate executives roaming the halls than characters like Doc. While I applaud this professionalism, somehow I think an ERA convention without a few crazy inventors would seem lacking. Most of the products we buy originally came from the minds of slightly eccentric entrepreneurs with a vision, and I would miss their energy.

At Respond2 (my direct response advertising agency) we have always specialized in DRTV campaigns; but more recently we’ve realized the importance of pursuing new media as an additive to DRTV for our clients.

During the past few weeks, Respond2’s new media duo has put together a pretty impressive campaign for our Bosley (hair restoration specialist) client. It is still too early to measure ROI, but I am convinced that when done appropriately, a smart web campaign can compliment DRTV, thus bringing more value to clients.

In short, BattleAgainstBald.com documents Seth Garon’s (Respond2 Creative Director) battle against hair loss, which he is taking "head-on" by going through the Bosley Hair Restoration procedure. Daily blog entries, pictures and soon-to-come videos will let visitors partake in his journey. And while his hair is growing, Seth writes about topics related to hair loss and hair restoration. It’s kind of like what Jared did for Subway, except that his progress (we hope) can be seen in real-time. Plus, Seth is much more of a meatball sub guy anyway.

Your reputation precedes you. A successful Warrior (and, for that matter, a Worker) ultimately develops a personal brand. (Please note that the concept of “personal brand” is not something I originated; it has been espoused by others in business circles. I just find it to be an essential Warrior tool.) Just as you trust that BMW is synonymous with world-class automobiles, that Wal-Mart means low prices, and that Nike shoes feature an athletic heritage, style, and quality—so should you have a positive “personal brand” that is synonymous with you and how you use your tools. Your personal brand (assuming it is positive) should precede you into many business and social situations. Regardless of where you fall in the scope of the Four W’s, you will have a personal brand whether you like it or not, so it is always best to take control and hone it in a positive way.

If you live life as a Warrior and utilize the Warrior’s tools, you will develop a personal brand that is partially based on the integrity, honesty, and drive that are a regular part of your life. That is one of the advantages of being a Warrior—you tap into an existing positive basis for your personal brand, almost like buying into a franchise. But past this point, you should endeavor to develop a unique and compelling component of your personal brand that really separates you from the masses. Your personal brand might be simple, e.g., “Extremely Reliable,” or “Willing to Put in the Extra Work to Make a Project Really Special.” Or it can be more complex—e.g., “A Great Asset on Complex Deals.”

Over the last two decades I’ve helped hundreds of brands navigate the wonderful (and sometimes seedy and terrifying) world of direct response marketing. It’s exciting to see quality companies come into the industry with innovative products and ideas, but equally distressing to see many of them fail.  Despite my and many other expert’s best consul and efforts, a large percentage of the Fortune 500 have difficulty implementing successful direct strategies.  Perhaps it has something to do with the heritage of direct versus the necessary entrenched bureaucracy of most mega-corporations.  Direct is all about scrappy, efficient marketing, salesmanship, testing to success, and measurement based on performance. Conversely, the traditional agency world has convinced corporate America that advertising is really about voodoo exposure ratings, obscure and often unintelligible creative genius, and hopefully a Super Bowl spot.    

OK, perhaps it is professional suicide to write a column that mentions “client” and “stupid” in the same title, but I am continually disturbed by the fact that many great companies that could utilize direct as a valuable part of their advertising and marketing mix make the same mistakes.  Unlike the traditional agency model that hits clients with huge fees on the front end and then develop unaccountable systems designed to make it difficult to get fired, a direct agency’s compensation is typically tied the client’s profitability.  So we take it personally when mistakes destroy both our bottom lines. Here are a few of the most common “stupid client tricks” I see repeated:

Allow the brand agency to manage the direct campaign.  This is akin to having Jennifer Aniston manage Angelina Jolie’s career.  Brand agencies not only don’t understand how direct works, but by their very nature they are opposed to it on multiple levels. 

Failing to identify and stick to clear objectives for the campaign.  Direct is all about measurement.  What is the goal, and how will we identify and measure success?  Corporations are often shifting objectives so quickly that it is difficult to establish and stick to a single goal.  Many clients enter the industry without a clear vision of what they want to achieve, and consequently never know if they are successful.

The consultant conundrum.  Companies new to the industry often seek the assistance of consultants.  While there are a handful of experts that can be of great assistance, many of the so-called direct experts have not been active in the business for years, or have very limited hands-on experience.  Direct is incredibly dynamic and changes on a monthly basis, so if your consultant’s most credentials are more than a year old, they are probably out of touch with the industry. It is common to claim unjustified credit for successes.  If you elect to use a consultant, check them out in-depth to make sure they are current in the industry and that their stated credentials are real.  Make sure you know how they are compensated.  A consultant that takes “referral fees” from vendors might not have your best interests at heart. If you choose the right agency, chances are that you won’t need a consultant. 

Utilize brand research to make direct decisions. Clients frequently want to fall back to their brand research to make creative and strategic decisions regarding their direct efforts.  While product and demographic research can be helpful in constructing offers and the product pitch, it is largely useless as a predictor of success in direct.  A focus group environment does not equate to grabbing a consumer and enticing them to buy.  There is no replacement for live testing. 

Back-end mismanagement. Proper telemarketing, web, and customer service management, and fast and accurate reporting from all response channels are essential to a successful campaign.  Yet a high percentage of clients insist on using their in-house resources that typically cannot handle the spikes and peculiarities of direct. The agency needs fast and accurate response data to optimize media. Without it, you waste money.

Analysis Paralysis.  I often see very appropriate products for direct fail because of corporate bureaucracy.  Sometimes they are even successful during the test, but never roll out due to internal issues.  Direct is a fast-paced marketing channel that involves testing and changing to optimize the campaign.  If your corporate structure does not allow for a bit of internal entrepreneurship, then the format might not be appropriate for your company.

Spending based on budget – not results.  The beauty of direct is in the immediate response data.  When successful marketers hit goals, they keep spending as long as they stay within the ROI target.  They never establish fixed budgets that would be too much if they were unsuccessful and too little if they have a hit.

Working with the right resources and really heeding your direct agency’s advice assures that a client doesn’t make the above mistakes.  The power of direct is its accountability, and when properly set-up and orchestrated everyone is incentivized to make the client successful. 

Over the last two decades I’ve helped hundreds of major brands navigate the wonderful (and sometimes seedy and terrifying) world of direct response television. It’s always exciting to see quality companies come into the industry with innovative products and ideas, but equally distressing to see many of these great brands fail miserably with their television consumer direct strategies.  Despite my and many other expert’s best consul and efforts, a large percentage of the Fortune 500’s DRTV efforts are failures.  And most disturbing is the fact that they fail because they continue to make the same errors that could be easily avoided.  Here are a few of the most common mistakes I see brand marketers make when they expand into DRTV:

•    Utilize their brand agency to orchestrate their DRTV campaign.  This is akin to having your dentist perform foot surgery.  Brand agencies not only don’t understand how DRTV works, but by their very nature they are opposed to it.  A DRTV campaign requires specialized creative, data-base driven media buying and tracking, and backend management.

•    Know your objective.  What is the goal of your campaign – and how will you judge its success?  Many clients enter the industry without a clear vision of what they want to achieve, and consequently never know if they are successful.

•    The consultant conundrum.  Companies new to DRTV often seek the assistance of consultants to lead them through the new and strange territory.  On paper this seems like a good idea, but in practice it often leads to failure.  Unfortunately, while there are a handful of experienced experts that can be of great assistance, many of the so-called DRTV experts selling themselves as consultants have not been active in the business for years, and have very limited hands-on experience.  The DRTV business is incredibly dynamic and changes on a monthly basis, so if your consultant’s most recent credentials are more than a year old, they are probably out of touch with the industry. Also, it is quite common to claim unjustified credit for successes.  If you elect to use a consultant, check them out in-depth to make sure they are current in the industry and that their stated credentials are real.  Make sure you know how they are compensated.  A consultant that takes “referral fees” from vendors might not have your best interests at heart.  And if you choose the right agency, chances are that you won’t need a consultant. 

•    Utilize brand research to make DRTV decisions.  Traditional brand clients frequently want to fall back to their brand research to make creative and strategic decisions regarding their DRTV efforts.  While product and demographic research can be helpful in constructing offers and the product pitch, it is unfortunately largely useless as a predictor of success in DRTV.  A focus group environment does not equate to grabbing a channel-surfing consumer and enticing them to buy.  There is no replacement for live on air testing.  It there were, the product marketing companies that make their living via DRTV would have adopted these methods instead of the tried and true method of on air testing.

•    Back-end mismanagement.  Proper telemarketing, web, and customer service management, and fast and accurate reporting from all response channels (including retail sell-through), are essential to a successful campaign.  Yet a high percentage of brand clients insist on using their in-house resources that typically cannot handle the spikes and peculiarities of the DRTV consumer. Your media agency needs fast and accurate response data to optimize your media, and if you can’t provide it you are wasting money.

•    Analysis Paralysis.  I have seen many great companies with products very appropriate for DRTV fail in the format because of their internal bureaucracy.  Sometimes they are even enormously successful during the test, but never roll out due to internal issues.  DRTV is a fast paced marketing channel that involves testing and changing to optimize the campaign.  If your corporate structure does not allow for a bit of internal entrepreneurship, then the format might not be appropriate for your company.

•    Spend based on success – not on budget.  The beauty of DRTV is in the immediate response and data.  When successful marketers hit response goals, they keep on spending as long as they stay within target.  They would never establish a fixed budget that would be too much if they were unsuccessful and too little if they have a hit.

Working with the right resources and really heeding their advice assures that you won’t make the above mistakes.  The beauty of DRTV is its accountability, and when properly set-up and orchestrated everyone is incentivized to make the client successful. 

Here comes my first advertising-related post, which is from my editorial in DM News.

Yesterday Lexus lost the opportunity to sell me a new car. They also wasted enormous advertising dollars while allowing their agency to take them down the “advertising as art” path that continues to plague the advertising industry.

Last night my wife and I had cuddled up with our TIVO, ready to watch a little “pre-selected” TV, when I noticed an ad on the TIVO main screen for the new Lexus. Since I’m curious about the Lexus, I was excited to click through. I wanted details that would potentially convert me to a buyer. What does the car look like? Tell me about the available interiors and special features. Is there a hybrid model, and what are the mileage stats and technical specifications? Basically, I wanted a video test drive and sales overview without an annoying pushy salesman breathing down my neck, and getting it via TIVO seemed like a great option.

Instead, Lexus delivered two little art films; one hosted by a Belgian chef extolling the wonders of chocolate, and the other featuring a French winemaker singing the glories of Champagne. At the end of each film there was a three or four second shot of a car – a Lexus I am assuming – but I can’t be sure because it came and went so fast. These were lovely films with very high production standards, and I am sure the agency creative team that created them had a ball traveling around Europe shooting them. But the concept had nothing to do with Lexus, and the attempt to elevate the Lexus brand by associating it with chocolate and champagne was a silly waste of money.

This is a classic illustration of Madison Avenue’s dirty little secret. Many advertising professionals don’t want to work in advertising. They want to be film makers or fashion designers or movie directors, and they have hijacked advertising in an attempt to use it as a bridge to their desired careers.

OK – a caveat here. There is certainly a lot of very effective and incredibly creative advertising out there that does make me want to buy a product. For instance, I love the new Chiat Day work for Apple that combines creativity with product salesmanship that makes me want to purchase the products on several levels.

But many agencies are doing their clients an enormous disservice by ignoring the real intent of advertising. Clients hire agencies to help them sell their products. Consumers watch advertising to learn about products and perhaps be inspired to purchase them. The connection should be natural, but when a client is led down incredibly obscure “branding paths” the two sometimes never meet.

TIVO provides an interesting opportunity for a company like Lexus to tackle a variety of advertising issues. TIVO has been heralded as the potential death nail to television advertising, and Lexus could be an incredible innovator by finding a way to use the technology to their advantage. But first they need to accept that TIVO is essentially a direct response delivery method (I know this because our agency and several others currently have direct response initiatives with them), and accordingly they should track their advertising effectiveness – both media and creative - on a cost per inquiry and qualification basis. They could use the added time the format offers over traditional television advertising to really sell their product to consumers in a very non-threatening manner, and solve their “retail problem”. Let’s face it – most consumers dread dealing with car salesmen, and a high percentage of retail salesmen don’t really understand their products or really know how to sell. Via TIVO Lexus could have bypassed that problem with a controlled, finely honed sales pitch and lots of data that made the pre-qualified and motivated viewer really want to buy. Then they could have offered a compelling call-to-action that could be tracked through the final purchase, so they would know exactly how their advertising is working.

Or, they could broadcast little films that have nothing to do with cars but make me hungry. Seems like the choice would be obvious.

Buy Warriors, Workers, Whiners, and Weasels at Amazon.