Insight

Pay for Performance TV – Ignore the Hype, Embrace the Opportunity

Sally Dickson, Managing Partner, R2C Group and President, MMSI |

No risk! Guaranteed! Cheap!

These are just a few of the colorful descriptions I’ve heard about PITV, known these days as pay for performance TV. As a seasoned leader in the pay for performance world, I’ve seen the industry evolve from its early hype-filled days to the strong segment of the DRTV marketplace that it is today.

How are DRTV marketers using pay for performance effectively? By knowing what to watch out for. And working with the right people.

More and more agencies—and individuals—have added pay for performance to their direct response offerings. But before you jump into the market for cost-effective results, learn to identify what’s hype and what’s reality.

PITV is low risk, but it isn’t “no” risk. You’re paying for more than just the responses generated. You are making an investment in developing a compelling TV spot, dubs, call handling and the infrastructure to handle it all. This investment can represent significant risk if your pay-for-performance strategy isn’t sound. So make sure you’re working with a reputable partner who can help you manage the process.

Look for the direct connection. Most PITV agencies won’t tell you what media you are running on. Why? Because they don’t know! Choose an agency that deals directly with the media. Otherwise your cost per lead — call, action or however you define it — will be devoured by a payment to your agency, payment to the agencies you’re farmed out to, then payment to their agencies … and on it goes. Agencies that work directly with the media will optimize your placements. They will eliminate sources that don’t deliver quality responses and add more that do. It’s that simple.

Be realistic when determining what will count as a “lead.” You may define it as capturing contact information, counting calls of a certain duration, counting web registrations or something else. Work with your PITV agency on this. If it can’t be measured and tracked back to the media source, it won’t fly in the PITV marketplace.

And speaking of tracking. Ideally, your call to action will direct viewers to a toll-free number and/or URL. A unique toll-free number for each media source ensures that credit is given to the station or network that drove the response. It also helps your agency determine which media generate the best responses. You need a unique URL for the same reasons, but keep it simple. A URL with back slashes and numbers isn’t memorable, and it doesn’t look good. Your agency can help with this.

Don’t go looking for “cheap” leads. If you are already airing a DRTV campaign, use the cost per “lead” you consistently generate from your buys as your starting point. The PITV cost per lead should be similar—and certainly no more than 10 to 15 percent lower. For a new-to-television campaign, don’t balk at a DRTV test. This is the best way to figure out the strength of your creative and consumer interest in your offer. Those results will help shape your allowable. Your PITV agency should know who your competitors are, how they define their lead and what allowable they use. Your agency’s knowledge and experience will help you enter the PITV marketplace in a competitive position.

Eliminate roadblocks. Restrictions, such as limited call center hours or call volume maximums, mean fewer media opportunities. If you are driving phone traffic, overflow and after hours calls are inevitable—and you have to have a way to capture them. There are many affordable ways to do so. Work with your PITV agency to assign an appropriate value for those responses.

Trust your PITV agency. Or find a new one. This is a partnership! Your agency professionals should be asking you lots of questions about your business, your campaign infrastructure and your expectations. With that, they can make sure that all systems are go for the PITV launch. If there are pieces missing, they should offer you workable solutions. Work with professionals who know what to look for before they start your campaign.

This is the time to embrace the benefits of pay for performance TV. Learn what works best and you’ll save money, avoid some major headaches and get the positive results that everyone is seeking in today’s direct response marketplace.

The Sky is Definitely Not Falling