Brands win with TV 2.0 and the new direct mail

Discussion
Source: SCOTTeVEST TV Commercial
Jun 11, 2018
Matthew Stern

While a lot of marketing talk focuses on making the most out of social and other new media, some brands are having the most luck with good old-fashioned TV ads. At the Internet Retailer Conference and Expo 2018 (IRCE) in Chicago, Marshall Rule, president of SCOTTeVEST, and Jenni Friedman, director of brand strategy at Hello Fresh, discussed how they’re getting new value out of old media advertising.

SCOTTeVEST is an 18-year-old Idaho-based brand with only 10 employees that sells multi-pocketed clothing. In 2012, the company’s traditionally lucrative PR outreach began to stagnate. As management pursued web marketing, it found owning search terms and Facebook promotion ineffective. During the 2016 holiday season, SCOTTeVEST invested $150,000 in TV ad buys and created a $6,000 commercial for DirectTV in-house. Throughout 2017, the company continued to invest in TV ads.

“TV customers on certain channels really saw an increase in lifetime value and repeat purchases, which is where our business has always driven most of our revenue,” said Mr. Rule. 

The company experienced a 95 percent topline sales increase in 2017 after five years of stagnant growth or losses.

Ms. Friedman discussed how Hello Fresh applies its quick digital startup mindset to creating and placing advertisements in the slower, more expensive and production-heavy world of traditional advertising. She called the model TV 2.0. Rather than creating a single spot, the company’s production method allows for 50-some variations on the same commercial with minimal budget increase. The spots mix-and-match and test elements like filmed customer testimonials, front- and end-card colors and so on.

“To do this kind of testing, you need to think of a format that allows that,” Ms. Friedman. “If you had one talking head in the front and they spoke the entire commercial, it’s really hard to edit that.” In response to an audience question, Ms. Friedman also discussed Hello Fresh’s direct mail campaigns.

“It’s very successful for us at the right times of the year. It creates very loyal customers,” Ms. Friedman said.

“Someone once told me [direct mail is] popular again because nobody gets mail anymore. … So direct mail feels a little less like junk and more like a present in your mailbox.”

DISCUSSION QUESTIONS: Are brands mistaken in turning away from traditional television advertising and direct mail? What other types of brands and retailers could benefit from pursuing these two companies’ “TV 2.0” media strategy?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"It all comes down to relevancy. "
"Direct mail is far from dead as it’s the second highest response medium."
"Let’s not forget that broadcast TV is still a dominant channel that has immense reach and rivals the most popular streaming channels."

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20 Comments on "Brands win with TV 2.0 and the new direct mail"


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Max Goldberg
Guest

Marketers need to consider a mix of media to create successful marketing campaigns. Utilizing new technologies, TV can be added to the mix without the traditional lead times and, in many instances, without the traditional cost. We are way beyond the era of three television networks controlling television viewership and ad pricing.

Bob Amster
BrainTrust

TV is not dead and, surprisingly, neither is direct mail. If that is so, then advertising on these two types of media is advised. Consumers still watch TV and I enjoy receiving a good-looking glossy catalog from some companies. Furniture, smaller hard goods and even apparel companies can successfully use the TV 2.0 approach to advertise.

Charles Dimov
Guest

The new world of marketing is all about experimentation. It is a constant A/B testing environment. It is also about continually trying new … AND OLD things. If everyone else ISN’T doing it, it could be your opportunity. However the key is to TEST. It could be that everyone else isn’t doing it because it really doesn’t work. Don’t bet the company on one campaign or channel.

Lyle Bunn (Ph.D. Hon)
Guest

Smart brands exploit the range of highly targeted, relatively inexpensive audiences in TV, cable and online programming. The “long tail” has served them well as has product placement and native advertising that allows the brand to align with inquiry, lifestyle and interests. The harm is done when consumers do not have the option of skipping an ad, which should tell those smart brands when their message is not relevant or an annoyance. Treating banner ads like information-based targeted messaging is a waste of marketing investment as it de-brands, rather than fulfilling its intent.

Ken Lonyai
BrainTrust

This is a limited strategy that doesn’t compare to national TV advertising campaigns typically produced by major brands. For targeted audiences and off-prime TV times or niche channels/markets, the reach of small campaigns and limited production commercials may prove effective. Trying to scale, however, would put this approach out of its league both in reach and budget and likely flop.

As ineffective as it is in our home, we haven’t seen any lull in direct mail and wouldn’t view it as a present, so I’m skeptical of the claims there.

Phil Masiello
BrainTrust

Television advertising can still be effective for brands. However, the effectiveness of the ad comes down to how well the creative speaks to the audience and how much the spots costs.

Today, the cost of production has dramatically decreased. That allows brands to test different creative and different messages, very effectively.

Because of the number of channels available, brands can do a very good job of targetting their correct audience. Wayfair is a great example of advertising on channels like HGTV and DIY.

I am not so bullish on direct mail. In my opinion, the returns were never there and have gotten worse. I have never seen direct mail work.

Art Suriano
BrainTrust
As the article points out, there are still many pluses to using TV advertising. However it is costly, and those buying the ads need to be very strategic in terms of knowing where and when to buy airtime. Today many people who watch TV tend to DVR their favorite programs so they can watch them at their convenience and fast forward through the commercials. Today there are so many commercials, it can become tedious to watch all the ads because a stop set of four minutes can have as many as ten different businesses. Nevertheless, TV can still be useful. Keep the message simple so that it doesn’t get lost. I liked the SCOTTeVEST spot because it did that. In seconds, I understood what they were selling. However, I found Hello Fresh to be less effective. Keep in mind that because there are so many commercials today, it is not uncommon for the viewer to walk out of the room to get a snack. When there is no sound other than music, as in the… Read more »
Evan Snively
BrainTrust

Direct mail can be a bit daunting from a cost and measurable ROI perspective, especially with many of the new click or conversion models that online provides. New acquisition through direct mail is a tall order, however it can be very successful at increasing the lifetime value of existing customers – especially those who have recently engaged or are part of a loyalty program.
Make sure the piece is distinct and messaging is clear! Personally, I will have sorted what is going in the garage recycle bin vs. what I will be taking inside to actually open within the 20 steps from my mailbox to my door.

Jasmine Glasheen
BrainTrust

It all comes down to relevancy. Most customers are activated by a combination of marketing methods — social media ads, email, TV ads, direct mail — and it’s all about using the right combination at the right time to get the job done.

Will TV and direct mail become more of an investment for retailers as time goes on? I sure hope that if they are, the retailers using them do their due diligence in market research. I can see how traditional marketing methods like mailers could appeal to old school and Gen Z consumers, but let’s be real: direct mail from retailers has never once felt like “a present in my mailbox.”

Celeste C. Giampetro
Guest

Direct mail is far from dead as it’s the second highest response medium. New forms of direct mail — as the USPS calls it “Digitally Reactive Direct Mail” — combine online intent with the power of direct mail. (Full disclosure, my company invented Programmatic Direct Mail®.) This is not the junk mail most consumers are used to. This new channel is based on relevancy and online intent and most importantly respect for the consumer and their experience, unlike the barrage of digital ads we’re inundated with.

Ed Rosenbaum
BrainTrust

Traditional marketing and advertising is in a state of transition in my opinion. As long as there are people in their 50s and older with strong buying power, traditional marketing is necessary. This group looks at TV, and to a lesser extent newspapers, as a main source of information. Thus they make buying choices based on the way traditional marketing is swaying their judgement. Those in the younger age groups tend to find what they need through social media outlets. This is where the transition is occurring. As we continue to age we will see the swing in marketing away from traditional TV channels to those bringing us what we prefer to see. And now we can understand why we get less information and advertising in newspapers but are being charged more for it.

Ray Riley
BrainTrust

A good strategy encompasses a tested balance of tactics which would include TV advertising. With localized TV advertising, retailers can pinpoint their audience by postal code and quantifiably measure success as opposed to using the broad brush approach of the past. Brands are absolutely mistaken to completely turn their backs on any channel, especially traditional formats, as our digital inboxes and smartphone screens are inundated with noise.

Shep Hyken
BrainTrust

Someone once said, as it applies to marketing, PR, etc. that “the magic is in the mix.” Different marketing/PR strategies will go in and out of favor. I struggle with a TV strategy when a big chunk of the viewing audience is watching the shows on their recorded devices and speeding through commercials. Still, there is a percentage of the audience that doesn’t record their shows — or likes the commercials. And sports and news are typically watched in real time. Social media, content marketing, Facebook ads, direct mail — they’re all viable for the right audience. The trick is knowing which one (or more) to focus on. The secret is knowing where your customers are and how they engage in the different areas. Only then will you have a successful campaign, be it TV, direct mail or any other type of promotion.

Ken Morris
BrainTrust
Ken Morris
Principal, Boston Retail Advisors
1 year 3 months ago

As with most things in business, a try-and-measure strategy is the best approach. With enhanced micro-targeting TV advertising capabilities, even small local businesses can afford TV advertising with “reasonable” rates to just air their ad in a targeted geographic area within a convenient radius of their business.

With increased competition for key word search terms and web and social media display ads, retailers need to explore all options and TV and direct mail are still effective if you have a creative and compelling message and the reach is targeted to manage costs. If you can’t measure it, you shouldn’t do it, so it is critical to religiously track your marketing spend and TV and direct mail spend and head back to the future.

Gene Detroyer
BrainTrust

I am blown away by the reduction in cost of TV advertising as it is described here. Forty years ago, both production and media were 10 times the numbers quoted here. Maybe I am missing something?

I guess I am terribly influenced by my own behavior. I either stream shows or record them. Except for sports and news, no commercials reach my eyes. As far as direct mail, it hits the recycle been before it even reaches my apartment. Even the overbearing RH catalog.

Ralph Jacobson
BrainTrust

Let’s not forget that broadcast TV is still a dominant channel that has immense reach and rivals the most popular streaming channels that tech-savvy Millennials and others utilize. This is all about knowing your audience. If your products and services have a wide target, as in traditional supermarkets for example, then TV and potentially direct mail may hit the mark. This is not a one-size-fits-all situation, though. You can’t get sloppy in your approach.

James Tenser
BrainTrust
Some brands that have been traditionally promoted using digital-only strategies seem to have discovered they are trapped in marketing “echo chambers” of their own design. Broadcast media offers a way to broaden awareness and connect with new potential customers. There are some notable examples of digital-first retailers who are pursuing alternate approaches. In addition to the Scott and HelloFresh examples here, a current standout might be Wayfair.com, the home furnishings retailer, which has maintained a heavy ad schedule on TV recently. It’s axiomatic that a small digital brand cannot afford a sustained broadcast media blitz for very long, but if TV ads (or newspaper inserts, or radio spots etc.) generate a measurable spike in web traffic, then the investment may be warranted. One more observation: In the “mad men” heyday of broadcast advertising, the only measurement of effectiveness available was store take-away. Stocking stores with a new product could represent a costly gamble. In the digital era, online traffic and conversions enable a rapid read on ad effectiveness with lower inventory and distribution commitments. Using… Read more »
Doug Garnett
BrainTrust
The shocking thing is … that these marketers are talking as if it’s a surprise. Amazon, Google, Uber, Facebook, Apple and Microsoft all spend massively on TV to support their brands and drive immediate results. From the reports I read, I believe each is spending roughly $500M annually on traditional TV. The reason? They cannot achieve scale (mass marketing) any other way. What about TV 2.0? That probably makes the board really happy because it sounds innovative. But TV agencies have always prepped and planned for multiple ads and to get as much as possible out of campaigns. That said, constantly shifting message is NOT often as effective as people might think. The truth is that more non-target consumers see each ad (digital or TV) than target consumers. So you need to be careful not to confuse the market. All-in-all: If a retailer doesn’t have an effective TV strategy at this point they need to be finding one. But don’t just look at big ad agencies — they tend to offer the brand advertising hammer… Read more »
Carlos Arambula
BrainTrust

It all depends on the category and your consumer target. Not all categories/consumers behave the same and using the TV 2.0 strategy for other products might yield dissappointing results — im certain a bit of sleuthing will find the same TV 2.0 approach disastrous for other products.

My advice to all is to learn everything possible about your category and consumer target and design a media strategy that will yield resutls. There are many examples of media mixes that produced success, but the only commonality between of all of them is thorough strategic planning.

Mike Osorio
BrainTrust

My guidance as always when looking at potential marketing platforms is to start with the DNA of the brand/retailer/product and an analysis of where the desired customer consumes communications. If the limited TV 2.0 platform described here or direct mail allow for a message in alignment with your DNA and is shown to be a place where your target consumer consume information, then test it by all means! There is a limited marketing budget, and a plethora of platform choices. Companies should focus on a small number of platforms, while leaving some budget for testing others.

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Braintrust
"It all comes down to relevancy. "
"Direct mail is far from dead as it’s the second highest response medium."
"Let’s not forget that broadcast TV is still a dominant channel that has immense reach and rivals the most popular streaming channels."

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