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1. Competition will get even fiercer.I recently declared 2014 “the year competition reached a whole new level” and used jeggings (i.e., leggings that resemble jeans) as my prime example. By the end of last year, no less than four marketers had launched a jeggings project. While a battle with so many marketers is rare, precious few hit campaigns in 2014 had the field to themselves. I used to preach “there’s only room for one,” but the industry is determined to prove there’s always room for two—profitability be damned. I predict that trend will continue to accelerate in 2015. What this means for top players is they will have no time to waste when they discover a hit. Retail placement at all major accounts will have to be secured immediately, before the circling sharks catch the scent of blood in the water. For smaller players with a new hit, the strategy is even clearer: Keep your mouth shut and partner with a top player ASAP. The days of ‘doing retail yourself’ are long gone, as many cautionary tales from last year attest.
2. Some key direct-selling practices will be banned.Every few years, government regulators take a close look at DR sales tactics. Unsurprisingly, they always find something that offends them. Regardless of past rulings and past compliance, or the inherent vagueness of their laws, they decide changes must be made and fines must be paid. From what I am hearing in the field, 2014 was such a year. The government came knocking, and the resulting shakedown is going to create some significant changes to direct-selling practices that every DR marketer should know about. As this is not my area of expertise, I’ll leave it to others to explain what those changes should be. Look for a column (or two) from my friends in the legal profession.
3. DR ad spending will continue to look more like traditional ad spending.
I used to laugh when DR dilettantes asked me about my budget for a particular campaign. They failed to understand that if my metrics remained in-line, there was virtually no limit to the amount of media I could buy. These days, however, budgeting is no laughing matter. “In a few years, people will be amazed at our tales of the days when TV made a profit,” a friend said to me recently. I corrected him: “That time is already here. In a few years, people will be amazed we were able to break even.” There are many reasons why DR advertising will continue its inexorable migration from the income column to the expense column in 2015. One is the government intrusion mentioned above: Government regulators don’t care about profits. Another is the ever-increasing expectations of consumers, which are set by companies that don’t care about profits (see Amazon)—at least not immediate profits.
Direct selling, or hard selling, is a dying art. We’re beyond even soft selling as I’m reluctant to call the entertainment that passes for advertising these days “selling” at all. And that means DRTV companies that still aren’t prepared to view advertising as an expense subsidized by retail sales can expect to have a tough year. Waiting for that one mega-hit that makes it feel like the good ol’ days is the new path to bankruptcy. Of course, few are that foolish. What I see more often in the field is marketers leaving money on the table because they are more focused on ROI than response.
Image courtesy of Stoonn/FreeDigitalPhotos.net
Jordan Pine is a consultant specializing in short-form DRTV and the author of the industry blog The SciMark Report.