Field Report: The Commoditization of DRTV

by Jordan Pine on Aug 30, 2016 12:00:00 AM DRTV

The_Commoditization_of_DRTV-579648-edited.jpgCompetition in the short-form business has reached unprecedented levels. We have reached the point where no major rollout will remain uncontested, and there will almost certainly be two versions of every hot product on store shelves. This is not exactly news, but I think few have paused to consider its implications.

Interestingly, we are also now past the “knockoff.” The word never had an accurate denotative meaning (because it only applied to copying someone inside the industry), but now the connotative meaning has also lost its accuracy. This is not widely understood. Many still assume certain marketers wait for an item to hit TV and then copy it. However, based on several recent cases I have observed in the field, that is now the exception rather than the rule. Today, marketers are receiving the same information at approximately the same time—and that time is well before TV testing. As a result, which marketer is first to appear on TV is now completely irrelevant as to who will ultimately win in the marketplace.

The result of all this is the commoditization of DRTV. By that I mean there is no longer anything meaningful to differentiate one DRTV company from another. All of the major players are aware of the same products, equally capable of blanketing the airwaves with their commercial and have access to all of the same retail accounts.

“If you don’t have a point of difference,” said the great Jack Trout, “you’d better have a very low price.” But even prices aren’t a point of difference in this case. There are only a few meaningful price breaks, and everyone is restricted by the same margin requirements.

So what’s left? Superior strategy and expert execution. These are the twin weapons that are determining who comes out on top. In the field, I have seen it time and again. The dominant players strategically outmaneuver their competitors and do whatever it takes to execute at a high level when an opportunity presents itself. A case in point: Take a look at the True Top 50 hits chart for the first half of this year, and you will see two major brands standing alone that faced dual competitors when they first launched. Sometimes there were lawsuits involved. Sometimes retailers initially bet on the competition. None of that mattered in the end. Strategy and execution won the day.

As for the rest of the industry, this state of affairs presents new opportunities. World-class vendors, who provide services that once seemed like commodities, suddenly stand in stark contrast to lesser competitors. I’ve seen it with producers, suppliers, media agencies, and web-service providers. Part of that “superior strategy” I mentioned involves having a proper “A-team” that can handle the expert execution part of the battle. Pretenders can cost their clients a campaign.

There’s also good news for smaller companies that are willing to feed the bigger fish. This is a growing trend with about 20 percent of items appearing in my True Top 50 coming from outside sources. Product is still king and these “feeders” often find or create their own information rather than getting it from common sources. This has the potential to shift the power from the major players to the minor ones because only the latter has something truly unique to offer.

Photo by Stuart Miles/FreeDigitalPhotos.net

Jordan Pine is a consultant specializing in short-form DRTV and the author of The SciMark Report (scimark.blogspot.com).
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