Katie Williams: Beating the high cost of Media

Katie Williams: Beating the high cost of Media
By David E. Kopf

When you’ve been in the DRTV game as long as Williams Television Time CEO Katie Williams, you don’t really expect the rules or size of the playing field to change drastically. But DRTV isn’t a game, and veteran media buyers like Katie Williams have seen DRTV grow from a simple, untried marketing concept to a $4.5 billion industry.

In fact, Williams portrays perfectly the entrepreneurship-to—corporation theme that colors the history of DRTV. Williams started WTT in 1987 with $2,000 and a couple credit cards. In 1995, Williams Television Time recorded billings of approximately $70 million. Besides buying airtime, WTT now offers creative and production services, as well as consulting and marketing program management for a client list that includes Fortune 500 companies and the entrepreneurs that are DRTV’s mainstay.

Since its inception, DRTV`s rapid evolution could be likened to mankind growing from a tree shrew to Homo sapien in roughly a decade. That rapid growth has been a bumpy ride filled with much change.

For media buyers like herself Williams says one of the major growing pains the DRTV industry has felt is the jump media rates have taken in the past few years.
Williams says that most DRTV marketers cite an increase in rates during the past two years, but that Williams Television Time (WWT) has perceived a steady rise in rates that has been building steam for the past Eve years for an overall growth of 40 percent.

But for any research in media rates that Williams Television Time has recorded, Williams says that rates vary from market to market and station to station, and figures that completely and accurately survey the media buying landscape for a given period are very hard to arrive at. However, the causes of any growth in airtime costs are easier to trace.

One of the reasons for a five-year increase in media rates is the growing number of channels and even networks, Katie Williams says.
“There are more channels than ever before,” she says. "Now we have four serious networks [Fox, CBS,
ABC and NBC] and a couple of wannabes [UPN and Warner]."

The result for media buyers, according to Katie Williams, is less audience (market) share, and hence, response, on a given cable channel or network. “The audience is diluted,” she says.

Greed also factors into the modem media buying equation. In the past, infomercial revenue was never a sizeable part of station and network budgets, because it was a relatively new and untested advertising medium.
"But now it’s been recognized as a good contributor," Williams says.

The result, according to Williams, is that stations Williams Television Time dealt with almost arbitrarily added 15 percent or so to their rates when they finally I realized DRTV’s potential.
All the factors contributing to rising media rates came to a head this past year, which many DRTV marketers felt was rough all around.

The past year was “a tough year for most people in the industry,” according to Katie Williams.
"Luckily some of our clients have been exceptions."

But 1996 has been rung in, and with the upcoming elections and Olympics many television marketers are afraid that 1996 may signify even higher media rates.

The discussion among media buyers has focused on whether the squeeze on airtime caused by 1996’s large—and long—media events will create more valuable time by putting ads up against great programming or create incredible price barriers for precious time.

Katie Williams says that she thinks the overall influence of the elections and Olympics and their resulting airtime crunch will fare poorly for direct marketers.

“It’s an obstacle,” she says. "We’ll see upward pressures on rates due to the Olympics and elections.”

What makes the actual rate increases hard to predict is that although the Olympics follow a set schedule and consume a specific amount of time, the elections will be a wild card time wise.
“The elections will have a broader impact [on media rates],” she says. “They spend a longer time on air."

Profits versus cost
But for all the gloom-and-doom predictions anyone may make for the coming year, there is still money to be made. Katie Williams says that as tight as things may get, there are several steps direct marketers can take to beat the high cost of media. The main thing is to perfect a DRTV plan and get it down to a science so that however expensive time may be the dollars spent for that vital half—hour or 30 to 120 seconds will be tuned for maximum pay off. To do that, Williams says there are four key considerations marketers should examine:

• Look at different formats
Katie Williams says that direct marketers shouldn’t stick with just long-format infomercials or short—form spots. They shouldn't even limit themselves to a particular medium, as enticing as one might be.
In fact, print campaigns, other electronic media like radio and other forms of televised direct marketing like home shopping channels may be a better approach depending on the product and the marketing strategy.

• Ensure an agency specializes in DRTV
Katie Williams says prospective Direct Marketers should shop around when looking for an agency to ensure that the organization they finally end up with will know how to create and execute a successful direct marketing effort on television.

• Test things out. Williams says that once marketers form the basic framework of a DRTVeffort, they should tweak everything from the creative to the length, from the telemarketing scripts to fulfillment. From back end to front end, marketers should test different theories to maximize the money they spend on time.
"Look at the variables that can be tested to End the best combination," Katie Williams says.
To illustrate, Katie Williams recalls one Williams Television Time client that made an additional $1 million by simply adding a dollar to shipping and handling.

• Explore international markets. Katie Williams says she is "shocked” by the number of people who ignore foreign markets due to some kind of geographic myopia.
Katie Williams uses Canada as the perfect example of how U.S.-grown DRTV efforts blindly blunder past our neighbours to the north, despite the fact that their culture and media are similar and that the overwhelming majority of Canadians speak and understand English fluently.

Thinking globally
Where the global DRTV market is concerned, there are several regions that are very receptive to infomercials, and their numbers will continue to grow.
“We’ll see in five years a situation where many countries will be as interested in infomercials as the [United
States],” she says.

Currently, Katie Williams says, Germany, the Scandinavian countries, Japan, Indonesia and Spain are the main countries outside the Americas that are proving to be fertile territory for international DRTV efforts.

Regions and countries with much DRTV potential, but many barriers to overcome before marketers can realize that potential, are Latin America, India, China and Russia. If and when these nations evolve past their barriers, DRTV marketers could have a heyday
“People who crack them will do quite well," she says.

But before this happens, these nations will need to develop reliable telecommunications infrastructures, adequate distribution systems and effective payment collection. Other problems
Williams says these regions must overcome before DRTV can enter are currency disparities, crime and graft.

But any and all problems one nation faces certainly do not apply to other countries, according to Katie Williams. One thing is for certain: It is not a world market—yet. "Each country has to be judged on a case-by-case basis," she says.

For instance, Katie Williams says approximately 80 percent of viewers in the United Kingdom only watch four channels, leaving fewer than 20 percent who receive their television signals via satellite dish. France offers marketers a similar situation to contend with, but other countries in the European Union do riot. Telecommunication regulations are still left to the sovereign member states to regulate.
Then again, Williams says that direct marketers can access pan European channels or CNN International but still have to contend with a plethora of laws and regulations for each country they want to reach. Katie Williams used advice a friend once told her to describe the complexities of inter national DRTV: "This business sounds simple but has millions of nuances."