Direct Response Television is one of those phenomena that are an unavoidable part of modern life for anyone who watches television. Yet, few of us know much about the nuts and bolts of actually preparing and running one not to mention whether it is something that makes sense for our products. That is why I asked Robert Yusim, a leading expert on direct response in the toy category, to write a blog about it.
Rob began his career working directly with Raymond Kives one of the founders of K-Tel and Quality Dino Entertainment. In 2006 Rob crossed over into the toy category and started Spin Direct, Spin Master Ltd's DRTV division, with the launches of Rocket Fishing Rod, Moon Sand, Storm Launcher and Reflex Heli. Over the past 5 years Rob has launched or licensed over 100 toy product campaigns in the US, Canada and UK. In 2010 Rob launched Product Counsel to provide complete turnkey DRTV services to clients in the toy industry.
People often ask me, how do you know if a product is right for DRTV? The answer is that there are a number of important criteria that if adhered to, will significantly increase the chances for success. One thing I’ve learned is DRTV is a great strategy for toy marketers because its proven to be very effective across a broad range of toy sub-categories, including Activities, Bath, Collectibles, Compounds, Dolls, Food Fun, Furniture, Novelties, Outdoor, RC & more.
Let’s consider the following list of toy specific product criteria for DRTV success:
Is the product New, Unique & Innovative? If the product is a brand new innovation or technology then DRTV could be the ideal launch strategy. DRTV, with its longer: 120 &:60 formats, is ideal for telling the story by introducing, communicating & demonstrating a new product’s features and benefits. While DRTV can be effective for products that have previously been distributed, it works best for brand new innovations.
Does the product have Demo-ability or a Magical Transformation? Do the product’s features, benefits & play pattern demonstrate or is there a magical transformation? If yes, then DRTV
provides a great opportunity. DRTV is ideal for toys with a process (Activities, Food Fun etc…), toys with a new technology (RC) and almost any toy that causes the consumer to go WOW!
Margins – A rule of thumb in the DRTV world is that products need a 4:1 ratio (or more) of selling price to cost of goods. But with a number of DRTV specific costs that need to be accounted for, I prefer to use gross margin of an entire offer, to determine potential for success. Optimally, a campaign with 50-55% DRTV gross margins has a good chance for success but I have seen many successful campaigns with lower than optimal margins.
Value – Does the offer provide value? The equation I use to determine potential is whether perceived value of an offer is at least equal to the proposed selling price. It is important to find a balance between value and gross margin that allows for a compelling offer and a potential financial return.
Broad Market – While there are examples of successful gender specific products, a product that crosses over both boy & girl will generally have a greater chance for success. Further, a product with a broader potential age range will have a better chance than a product with a very narrow targeted age range.
There are other considerations such as… Is the product credible? Is it easy to explain? Is it easy to handle & ship?
Use these guidelines in evaluating a potential DRTV product and you will have a greater chance for success!
In the coming weeks, I will introduce a number of topics in the DRTV channel relating to the toy industry. If you have any questions feel free to contact me directly by phone – 204 977 6102 or by email to: firstname.lastname@example.org