a price that will allow them to maintain an attractive
selling price and a sustainable model for DRTV?
Lee: It is definitely affecting the marketer’s margin and forcing
more and more marketers to move to subscription-based modeling.
Orsmond: What we have seen is more U.S. companies considering setting up DR operations here in the U.K. The immediate
advantage for U.S. companies is that they will benefit from the
sterling-to-dollar exchange rate which still stands at $1.95:£ 1.
The stronger pound definitely makes the U.K. an attractive
market for American and Canadian DR advertisers right now.
Sarnow: From August 2007 until May 2008, the dollar dropped
almost 20 percent against the Euro. For marketers that have
products manufactured in Europe trying to sell those products
in the U.S. market via television has become more difficult
because of the rising cost of goods sold. From August 2006 until
now, the exchange rate against the Chinese Yuan has only
dropped about 15 percent, but the largest drop has been in the
past 12 months. These numbers make it clear that marketers
must have a downstream revenue alternative besides DRTV to
make their projects profitable.
Stacey: Goods from China and many other places are priced
in U.S. dollars. However, as the cost of steel, fuel and other
imports has skyrocketed, manufacturers have had no choice
but to pass these increased product and shipping costs onto the
importer who may or may not be able to pass them onto the
consumers or resellers. It’s important in this environment that
marketers plan into their forecast and pricing models the probability of continual cost increases.
How are changes in the retail marketplace affecting DR
products that are seeking to find that ever-yearned-for
Bruckheim: Latin American retailers are becoming increasingly
open to DR products, especially considering the amount of television exposure the products are getting. Concurrently, local
distributors are multiplying their owned-and-operated stores
in many countries, and adding to traditional retail sales significantly also.
Eden: It’s creating a more expensive entry to market. Many are
finding that having a continued presence with one product or
another is helping to break into major retailers.
Medico: Retailers love DR. The more an offer is seen on TV, the
greater the sales at retail. Getting consumers into the store to
buy is what our mutual goal should be.
Stacey: The retail marketplace has consolidated significantly,
so there are fewer retailers but they are very large in size. Small
marketers with “one-off” items will need to work through estab-
lished retail vendors or reps to get placement. It is increasingly
important to have a differentiated and competitively advantageous product, with good media support, good packaging, good
margins and good price/value proposition.
Given the current state of the DR industry, what would
you change to ensure its continued health and growth?
Bruckheim: In Latin America, pan-regional cooperation has
always been an important key to success. That will never be
more important than in the coming year, or we’ll quickly price
ourselves out of the market. With a cooperative approach by
product and media suppliers, we can ensure a more stable and
profitable future for the clients we share.
Fays: My largest concern is ensuring networks and agencies take
the time to hire young, bright, energetic people to support the
business. Fair and just compensation needs to be discussed in our
business to ensure some of the best and brightest young minds
come our way as opposed to national ad sales. We, as an industry, have to invest in people or we are only fooling ourselves.
Lee: As a marketer, I would make sure that my vertical has
touchpoints in all the various marketing channels.
Medico: As an agency, our ability to adapt to a client and his or
her individual need is key. Having skilled workers to execute a
plan in as nimble a way as possible is also crucial. There is enormous pressure on traditional marketers to succeed in developing
a market for their products, and they see DR as a means to this
end. It’s a golden opportunity for the DR industry.
Orsmond: In the U.K., it comes down to changing the OFCOM
Broadcast Rules to allow a wider range of advertisers and
products to be sold on TV channels. OFCOM also must allow
infomercials to generate leads rather than just selling products
within the so-called home shopping windows that are available
on a growing number of U.K. cable and satellite TV channels.
Sarnow: Health and growth in the DR industry depend on consumers that believe the products that are offered on TV are
reputable, well priced and deliver on the promises made. When
marketers take shortcuts, looking for ways to make a quick buck
instead of taking a long-term consumer-centric perspective, our
entire industry suffers. If consumer confidence falls, then buying
products on TV will take a backseat to the Internet and other
Savage: Growth and prosperity will come with increased media
availability across all channels and sellers willing to price their
media affordably, based on its real value to the marketers who
need it to reach their consumers. It’s up to the marketers and
agencies to create compelling products and advertising to keep
the consumers interested.