Response-Driven TV: the Newest Channel of Commerce

In a world of time-shifted TV viewing and increased advertising accountability, is direct response television (DRTV) the future of advertising?

Stay with me.

Since the earliest days of television, direct response commercials have leveraged the technology of the times. From the USPS "send your check or money order to P.O. Box …” to the telephone "Don't wait, call now!" to the Internet "Visit us online at ...", the evolution continues, and DRTV stands at the threshold of a giant leap forward.

Take for example the TiVo and PayPal announcement about their game-changing alignment designed to give TiVo viewers the power to buy advertised products with their remote and pay for them safely and securely through PayPal. Wow. Suddenly advertisers can turn 30-second spots and interactive TiVo placements into “actionable purchasing opportunities.” In other words, TiVo and PayPal just opened a new line to the cash register. But what it all boils down to is a new spin on DRTV.

“We see television as the newest channel in commerce,” said Scott Dunlap, vice president of emerging opportunities and new ventures for PayPal. “Teaming up with TiVo will help us connect merchants and consumers via the TV set in the fastest and safest way possible. We are excited about the prospect of delivering a more complete and seamless couch commerce experience."

A “seamless couch commerce experience.” No doubt this evolving technology will make buying products on television as easy as everything else TiVo offers. So what are the key implications for advertisers and agencies?

Greater Levels of Accountability

Determining the success and ROI of an ad spot will be easier than ever. Measuring its response rate and actual sales via PayPal will enable advertisers to evaluate a spot’s impact more accurately. If the spot works, break out the champagne. If not, what then? Partnering with an agency that understands the nuances of direct response — and how to revise creative or media strategy quickly and effectively — will be critical.

Harder-Working Creative

Creative utilizing this technology will need to sell. Instead of generating emotion and awareness, it must motivate viewers to click the remote and take action on the spot. Advertisers may consider versioning spots. By leveraging TiVo’s targeting capabilities, multiple versions of one spot could be tailored, featuring different offers for different markets. This can make the spot more relevant and appealing to the viewer and thereby increase response rates.

Savvier Offers

Not every offer is right for a DRTV approach. The TiVo/PayPal combo will entice advertisers who have never used DRTV before to try it. Invariably, they’re going to run direct response spots for products and services that are positioned poorly for this advertising method: spots missing a product demonstration or failing to use an incentive when an incentive is crucial. Advertisers will need to develop DRTV know-how, and this is only possible through hard experience or bringing in people who know what they’re doing.

While TV has been an important channel in the digital commerce arena for years, the TiVo/PayPal alliance and other trends will attract a wider range of advertisers than ever before. For DRTV to be the future of advertising, however, advertisers and their agencies must educate themselves about the connection between the ads they create and the actions they want viewers to take. As soon as they become skilled at making this connection work, a new era in accountable, response-driven television advertising will begin.