"Understanding Media Buying"
By Greg Sarnow

Media buying is where the rubber meets the road in direct response television marketing. Understanding how to manage DRTV media can make or break a campaign.

Successful DRTV media campaigns spend between $100,000 to $20 million. A savvy media manager can save 10 to 20 percent of the total media cost

A DRTV campaign is unique because it gives marketers a package of benefits.

1. Creates sales.
2. Builds a database of customers.
3. Creates brand awareness.
4. Increases market share quickly.

Measuring Profitability
Whereas general advertising measures cost per point (CPP) or cost per thousand (CPM), reach and frequency, eyeballs and awareness, direct response measures profits. DR media is often referred to as "Accountable Advertising", because every airing is tracked and profits or losses are measured.

The main way professional direct response marketers calculate profit is with a cost per order (CPO) model. This model accounts for the direct profits of each product sold and the media costs per order.

Every product sold has costs associated with that sale. For example, costs could include the cost of goods sold, telemarketing, shipping and handling, fulfillment and merchant account costs.

Every sale creates revenues: product sold, upsells, membership clubs and shipping and handling all add up to create total revenue. Subtracting the expenses from the revenues gives you the gross profit of each item sold.

Each airing can then be analyzed by its profitability, and this is the basis for creating and managing a media campaign. The nature of DR media buying is very dynamic. A media campaign changes daily, with buys being added and subtracted based on yesterday's results.

Testing Strategies
The next step in media buying is creating a test to find out how the creative production, product offer, and the price points impact sales. There are several factors that go into determining how much money should be spent on a test, but the goal of the test is to find out if you have a commercial that is profitable.

Testing Correctly is Critical. There are four iron rules for testing:

1. Define a successful result before you start! The diversity of direct response campaigns demands a unique understanding of your marketing goals and how to translate the media results into total return on investment. Marketing models should account for continuity programs, upsells, clubs, retail and catalog sales.

   Brand awareness is an intangible, which is difficult to give value to but will quickly be felt, especially in retail, if you are running enough media.

2. Include enough stations in your media plan to give you examples of how different types of audiences react to your product. For example, in long form you might take about 20 local broadcast stations and four or five small cable stations. In short form, you might take six or seven cable stations which target your primary demographic. This will give you enough information at the end of the test to draw conclusions. Too little information can mean a disastrous mistaken evaluation of the value of the commercial being tested.

3. Choose crème de la crème media outlets. A test is exactly what it says, a TEST. Everyone thinks they have a home run, but the fact is that even singles and doubles can earn excellent profits.

   Your media buyer should give yo the very best media they have which they can prove works for the targeted demographic of your product. If the media is profitable, you can move forward from a point of success. If the very best media doesn't work, then you know where you stand, and you won't have to second guess forever.

4. Analyze results thoroughly after the media test is complete. Don't make decisions about the success of your test until the test is completely over and all the results are in. Each airing can reveal important information and the telemarketing reports have to be compared to the media that actually aired to know the results.

Even in very successful campaigns, clues about rolling out need to be studied. Which airings were profitable which weren't, how many people ordered, percentage of upsells taken and average revenue per order are all important statistics.

The purpose of a test is to accumulate enough information to know how to move forward with assurance. Accumulating this info does not take very long, so let the process unfold before you move forward.

Time and Money.

A media test usually takes between one and two weeks and the results are finalized in just a couple of days. Short-form media tests usually run in the $10,000-$15,000 range, and long-form tests usually run between $10,000-$30,000, depending on the quantity of parameters being tested.

If your show tests well, you are on the road to a successful product launch. Direct response TV marketing is often referred to as "the goose that lays a golden egg" because of the impact DRTV marketing has on the entire marketing strategy. Television marketing enhances the results of every sales venue. It also leads to marketing opportunities in home shopping, catalogs, retail distribution, e-commerce and international direct response marketing

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