USA-style DRTV is becoming a success story in other parts of the world now, says Digby Orsmond (pictured), bringing an update on European Direct Response TV.

The European Union has been with us for more than 50 years and what started out as a treaty between six founding countries now includes 27 member states with a total population of circa 493 million. Together, these countries account for less than 22 per cent of the world’s population, however their combined economies produce an impressive 37 per cent of the global GDP and they own more than 32 per cent of the world’s telephone lines – making Europe the ideal target for DRTV and home shopping.

DRTV, of course, is not a new concept. It has been used successfully as an advertising medium in America since the mid-1950s. The real boost for DRTV came with the availability of freephone numbers and the advent of credit cards as the preferred means of payment.

According to Teledirect Magazine, 68 per cent of all US TV commercials now carry a telephone number or URL, and this figure rises to around 87 per cent after 10pm.

Western Europe only embraced DRTV in the mid-’80s, however it is estimated that television shopping revenues in the EU are likely to grow to around €6.4 billion by 2012.

Product categories

There are no DRTV sales data for all European countries, but the increasing availability of longform airtime at very low airtime rates in the UK has meant US marketers with  ready-made infomercials are now taking the major share of the ‘direct to consumer TV’ business there.

The best performing UK categories are cosmetics plus health and Fitness, with Guthy Renker and Thane being the most successful US companies right now in the UK.

Time-Life Europe shut down in 2009 and this has left a gap in the market for music-related products which for many years was the top DRTV category.

Many DRTV advertisers thought the expansion of the European Union to 27 countries  linked with the continued growth of cable and digital channels would open up new and profitable markets.

Consumers in Austria, Germany, Holland, Italy, Ireland, Spain and UK have populations that like using their televisions for all manner of home shopping. Interestingly, these west European countries have the most call centres per head of population.

Central European countries also want to buy innovative DRTV products, but the logistics (lack of call centres and credit card usage) in those countries will continue to throw up challenges, meaning that DRTV operations might take several years before they deliver acceptable sales and ROI.

An upside, however, is that advertisers can test DRTV for a much lower entry cost in these countries and DRTV sales are predicted to forge ahead of their less progressive neighbours.

Another country where DRTV is growing fast is Poland, the only downside being that this country has not yet joined the euro and products have to be sold in zlotys.

The cost of both short and longform airtime is very competitive (when compared to the USA) and the British have always been inclined to buy products offered in US-style creatives. Another added advantage in the UK is that TV audience levels can be tracked using BARB (Broadcaster’s Audience Research Board) making media planning and buying TV airtime more accurate than any other country in Europe.

To highlight just how much the UK (population 59 million) has embraced tele-shopping, there are more than twice as many home shopping-styled TV channels in the UK than in Germany (population 84 million). So, Britain continues to be the best performing DRTV market in Europe.

Culture awareness

DRTV is primarily about generating maximum and immediate return on investment, ie, the product or sales message being seen more often in more places at the lowest airtime cost.

Direct marketers need to consider payment methods, as credit card usage in Europe varies significantly from country to country. In Britain, plastic money is the norm with around 96 per cent of orders being paid for by credit card, while in France the figure drops to 54 per cent. And in Germany, the biggest European economy, only around 32 per cent of buyers choose to use plastic – the purchase method of choice being Cash On Delivery.

Many US marketers still do not know that most of Europe now broadcasts using 16:9 PAL widescreen instead of 4:3 NTSC.  This means every US creative has to be converted into widescreen PAL format which can substantially change the supers and screen layout.

Taking inbound calls also requires very careful country-by-country planning as Europe does not have a national freephone (0800) service, so every country requires its own unique telephone number. Also, at present, there is no single pan-European telecoms operator covering all 27 EU member countries. This makes the call-to-action end tags on many pan-European DRTV ads or infomercials very complex – some carry as many as 15 different telephone numbers next to the flags for each country.

A DRTV advertiser, running a pan-European campaign on Eurosport, would be best advised to consider setting up inbound call handling facilities in each country. The number of facilities differs substantially from country to country, for example, both Britain and France have more telemarketing bureaux than Germany, even though their populations are smaller. In terms of the average cost-per-call in Europe, Britain is one of the least expensive, Spain the most costly.

Guidelines changes

Pan-European advertising will not have been affected by the USA’s FTC Guidelines, however it can be a nightmare scenario of incompatible regulations and consumer protection legislation. If a DRTV product has sold well in the USA, there are plenty of takers who will be keen to test the product in their own European countries. However, quite often they have to soften the sales message or considerably alter these USA spots and infomercials to get them approved by their local TV broadcast regulators.

Creative changes can often have a detrimental effect on the sales. For example, editing out or revising testimonials to comply with EU broadcast regulations because of unacceptable product claims means the sales message often loses it’s punch and, ultimately, generates lower sales. Another problem is that translating American colloquial expressions into non-English European languages is sometimes impossible. Imagine trying to translate Americanisms such as ’World’s best fat busting machine’ as used in one American exercise DRTV ad into German – almost impossible!

Sometimes, whole product categories are banned. For example, it is still not possible to use DRTV spots or Infomercials to sell weight-loss, dietary or vitamin supplement products in the UK. In Germany, it is not possible to use doctors, dentists or anyone else claiming to be in the medical profession to endorse your products and selling to children is still highly regulated.

Electronics must be adapted as the European standard is 220 volts (USA: 110 volts). Not only do manufacturers need to produce different product versions, they must get the product passed by local trading approval boards, such as the BEAB in the UK and TUV in Germany.

Uncontroversial product categories like fitness, housewares, collectibles, music and videos, plus cleaning products, tend to be the strongest sellers and least controversial with both broadcasters and viewers.

Monitoring and tracking results

My London-based media agency, ARM Direct, recognised several years ago that the best way to help DRTV clients enter the European market and keep ahead of their competitors was by investing more than US$500,000 in creating a bespoke media analysis software called Armada.

The rewards for our DRTV clients have been considerable as the software allows remote access to their data online (password protected) from wherever they are based in the world. This is essential as many DRTV companies are now

multi-national and it is important their executives can securely view TV sales data in a variety of ways – everything from daily orders by individual TV channel and telephone number to airtime and budget reconciliation per DRTV creative. The DRTV world is a global village and campaign tracking and analysis reports need to be shared with different management levels or locations on a regular basis.

Online activity

Compared to the USA, online activity in Europe is catching up at high speed with the total amount of Internet users, estimated as being 425.7million – up 305 per cent 2000-2009. Compare this to North America with an estimated Internet user population of just 259.6 million.

To gain an appreciation of Internet penetration in Europe, it is important to consider each country on its own accord. There are significant differences between the countries in north, west and southern Europe, in terms of online access and online purchasing.

The massive variance of Internet usage in colder Scandinavia, when compared to warmer southern Europe, illustrates these differences.  The further south people live, the less they surf the ’net. Sweden, Norway, Denmark and Finland have an average online connection of 86.9 per cent.

In stark contrast, in the sunnier southern countries of Spain, Portugal, Italy and Greece, we find that only 52.8 per cent of the Internet population has been active online. Purchasing habits also reflect this limited Internet usage, with just 37.6 per cent having ever made a reservation or purchase online (compared with 64.8 per cent in Scandinavia).

Caught in the middle, both geographically and statistically, are Switzerland, the Netherlands, Austria, Germany and the UK, where 77.4 per cent regularly surf the ’net.

While the Scandinavian online connection percentage is impressive, it is worth noting the UK and Germany are the most important online markets in Europe, accounting for more than 78.4 per cent of online sales.

It is estimated that the former east European countries will take a further two to four years to reach penetration levels found in the US.

The danger, however, for already successful US DRTV advertisers lies in assuming that what they can do on one side of the Atlantic can be automatically repeated on the other. The challenge is to learn from and then develop each individual market, finding ways to target the desired audience at a low cost per order.

Smaller audience numbers, as most advertisers in the USA are fully aware, are not necessarily a problem in the direct response arena. What matters is the equation between the cost of the airtime and the number of sales or leads generated.

An experienced DRTV media buyer with expert knowledge of the European market will be able to identify the type of audience demographics required for a particular product and book airtime accordingly to generate maximum response.

Pan-European DRTV is all about reaching the right number of target viewers in each country at the lowest cost-per-response and in airtime which will enable the multi-national response to be captured efficiently.

The UK and Germany have the most DRTV media avails in Europe – mainly driven by the sheer number of digital satellite and cable channels in those countries. The UK has the most Infomercial and home shopping airtime and my recommendation is to test in the UK first and then maybe consider Germany, Holland, Belgium and Spain – in that order.

Evolving shopping channels

Recent figures have showed that home shopping sales have grown fastest in the cosmetics and health and fitness sectors as these creatives have proven the most popular with consumers aged 25-45 years.

Infomercials have been a mainstay of advertising in the US for many years, however many European companies are still reluctant to fully exploit longform.

The continued success of traditional 24/7 ‘live’ home shopping channels – such as QVC, HSE24 and Ideal World Home Shopping, plus the many popular auction-style channels, proves that consumers are     not averse to purchasing off their TVs.

Recent UK media research by ITV confirms that more than 25 per cent of the 458 UK television channels now broadcast some Infomercial content every day during the ‘tele-shopping windows’ as currently allowed by Ofcom (UK’s broadcast regulator), making Britain the obvious first choice to test longform in Europe.

With regard to creative style, however, it is important for marketers to acknowledge that European consumers have very distinct tastes and that cultural or language differences must be tackled at the initial production stage. For example, British consumers are less impressed by US film and TV celebrities appearing in Infomercials, as these personalities are often viewed here as being ‘past their sell by date’ – whereas some have achieved almost cult status in Germany on YouTube.

There are many DRTV companies already successfully selling their products right across Europe. International DRTV companies such as Guthy Renker (short-form and Infomercials for a range of exercise equipment, DIY and cosmetics) are enjoying considerable pan-European success right now.

This is why it is so important to find the right partners from day one. Each European country presents its own set of challenges and it is therefore better for direct marketing companies to seek out the most successful DRTV media and creative agencies that already have a proven track record.

How long has DRTV been around?

DRTV HISTORY – USA

• Started late 1950s, fronted by fast-talking salesmen.
• Cheap live commercials selling products of limited value mainly for the home.
• First specialist Direct Response agencies started in the USA in the 1960s.
• Growth in US DRTV maintained by these specialist agencies expanding into longform, ie. Infomercials in the early ‘90s.
• Today, 87 per cent of all US TV ads after 10pm are transmitted with response mechanism.
• More importantly, many major brands now use both DRTV spots as well as half-hour infomercials.
• These include: APPLE – AT&T – BRAUN – CLUB MED – COCA COLA – DISNEY – GM – HOOVER – KODAK – MCDONALD’S – NISSAN - PLAYBOY  – PROCTER & GAMBLE – TIME-LIFE – WEIGHT WATCHERS.  And a growing list of others.

Digby Orsmond is CEO & creative director, ARM Direct.