Interview with Katie Kathleen Williams of Sylmark

If your not all that familiar with direct-response television - DRTV or infomercials, for short -you soon will he.

Meet Kathleen “Katie" Williams, one of the founders of DRTV and chief executive officer of Williams Worldwide, Inc., one of the world's leading global direct response television and marketing agencies.

In this interview, Katie Williams, who founded her own company 10 years ago with $2000 and a few credit cards, explains why DRTV has become the advertising vehicle of choice for companies all over the world. "The informercial format allows you the time and luxury to come into consumers' living rooms and and bond.

Founded in 1987 by Kathleen "Katie" Williams and based in Santa Monica, California, with offices in New York, London, Tokyo, Mexio City, Sao Paulo and Ogden, UTAH, Williams Worldwide Inc.specializes in global direct-response televsion advertising and is currently marketing products internationally on television in more than 60 countries. In 1996, billings exceeded $100 Million.

Your biography says: "Katie Williams likes to compare direct-response television media buying to trading on Wall Street." Why this comparison?

For several reasons. One is the pace. The pace is just incredible, and it is very different from the normal advertising world. This is accountable advertising; you are always looking at your bottom line just as someone on Wall Street manages a portfolio for a client, we have to manage a media portfolio. We are also always looking at results: What happened yesterday? What’s the market doing? What will the trend be? Everyday we make changes to our media portfolio. It‘s not static at all, it is constantlychanging.

Williams Worldwide is one of the largest infomercial advertising agencies in the world. It’s been written that you started your business in 1987 with only $2,000 in cash and a handful of credit cards. Is that true, and what was your vision back then?

It is true. l had a couple of thousand dollars, some money from my folks, and some money I had put aside from a previous job. For the first few months, I just used my credit cards to the max.

I had started working with infomercials in 1984 when the FCC first deregulated advertising time. So I came in on the ground floor, and I saw the power they had. I think infomercials and direct-response advertising are the most powerful marketing tools that exist. Of course, they can’t be applied to every product, but they are extremely powerful.

At that time, and still today, the only people utilizing those tools were traditional direct marketers, entrepreneurs - really, a lot of cowboys. No large corporations were using them. I thought there was incredible potential for direct response to become part of an integrated marketing approach and to be the most powerful marketing tool within a company's array of marketing tools.

How can CEOs and corporations benefit from the services Williams Worldwide provides?

There are myriad ways that direct-response advertising can help a client. We are talking about television and, rather than just advertising, accountable advertising, So it is extremely visible. We can tell clients exactly what every dollar they’re spending generates.

l’m amazed at the number of companies I visit with 55-million or 510-million budgets, where when I ask, "What types of sales do you expect to see coming fromyour budget?" the marketing managers and brand managers don’t have an answer. They don’t know. Whereas with direct-response advertising, if we sit down and put together a plan, we can say, "OK, a 55-million ad budget will create x, y and z. We can measure it. And if it doesn’t create that, we will stop spending the money before we spend it all. That's the first thing, it’s accountable advertising. Second, the infomercial format allows you the time and luxury to come into consumers’ living rooms and bond with them at a cost-effective price. lt lets you give detailed information about your product and tell a story of magic about it. That’s extremely powerful.

Williams Worldwide says its bottom line is summed up by this question: "Did we move product?" Can you provide a few examples of corporations whose sales shot up dramatically as a result of direct-response advertising you initiated? Direct-response television can create tremendous brand awareness and increase distribution. lf you have a product with limited distribution, it can create distribution by creating cousumer demand. lt can launch new products. One of our clients has a new product called Ab Flex. In its first year in the United States, AbFlex did about $120 million in sales. We took Ab Flex internationally aswell. ln the last 12 months, it sold one-million units worldwide.

There is a large, privately held company that has a packaged·goods product in the pet-food arena. Within 10 weeks of running their infomercial campaign, their sales increased about 240 percent. Over a period of six months, their distribution increased 200 percent. Hoover is another company we’veworked with. We‘ve done several infomercials and short-form direct-response campaigns for them. In every single case, we have seen significantly increased con-sumer demand at retail for their product, usually in the range of 20 to 50 percent. Every campaign is a little bit different, but with Hoover we actually send the product directly over TV, while also targeting it regionally.

So Hoover is not only getting TV sales, but retail sales as well.

Are there any companies you consider competitors and, if so, what makes Williams Worldwide unique?

There are several companies that do facets of what we do, but none we consider competitors. Outside the United States, our bigest competitor would probably be Quantum National Media. How are we different from them? Our goal is to go deep into markets and take the brand awareness we create from TV, which is very strong, and maximize it. Not just sell things off TV, but integrate TV with print campaigns, catalog sales, direct mail and retail sales. Quantum National Media has a broader approach. Their main interest is TV, and they typically don’t integrate it. Domestically, ad agencies like Wunderman or Eicoff would be competitors. Eicoff is strong in short-fund direct response, but does nothing with infomercials.Wunderman does much more mail and database marketing. They do no infomercials and relatively little DRTV. One of the services you offer is called "i.M.A.P.," which stands for"Infomercial Marketing Action Plan." Can you describe that service? First of all, we turn down a lot of business, because this is an accountable form of advertising, and we want to have successes. We know immediately after the test period what products will fail. Part of that test process involves doing an "i.M.A.P.," where the client comes in and we look at its marketing objectives. Is it a new product launch? Is it increasing distribution? Increasing retail sales? Is it generating leads and building customer relations? We consider the objectives and look at how they should be integrated into other marketing areas, and how television or DRTV should be integrated. Then we put together a pro forma idea of what can be achieved: a worst-case and a best-case scenario. We put together a creative strategy, with all the nuts and bolts, so we have a road map. After that, we sit down with the client and say "Here’s what we think is the best strategy," and they give it ago or a no go. It reduces their risk, because now they know what will be involved. It also helps us, because it gets us really oriented toward the client’s objectives.

One of your stated goals is to strengthen Williams Worldwide Television, Ltd. (WWT), your overseas direct responsc agency, in international markets. What are your long-term strategies worldwide?

Obviously, international is a big part of our growth, and we are committed to it. We are already marketing products or sublicensing them to subdistributors in over 60 countries. Our goals are to apply the knowledge we have learned in the States about integrating, and to unleash the power of a direct marketing campaign.

When I look at how we do business in a lot of these countries, as compared to the United States, we still have much to learn. In many cases, the local infrastructure isn’t developed enough, there are media restrictions, etc. lt is a question of time, work, money and patience. We will be able to duplicate what we have here abroad, but it’s going to take awhile.

You are especially interested in European markets, the former Soviet Union and certain Latin Americanmarkets. Why are you concentrating on those in particular?

There are burgeoning economies in many of those markets, and there is tremendous consumer demand, a lot of it for American products. Even in markets where the econony has been unstable, such as Mexico, we have had tremendous success. In many cases, the challenges are the same as in more developed countries. There is a lot of potential there.

You’ve talked about securing what you call “unique partnerships" in international markets. What type of partner do you look for, and how do you see those partnerships evolving in years to come?

We feel it is extremely important to have local partners. Our strengths are in understanding media, how to value and negotiate media, direct response and marketing. We do not have indept knowledge of each international market, or of how to work with customers in different markets, or of the infrastructure in each country. So we look for partners that have strengths it those areas.

Primarily our partners are been companies in the direct marketing business on the support-services side, although that isn't always the case. Sometimes they are direct marketers themselves, but they have telemarketing, they know how to handle transactions with consumers. That’s always been a big problem overseas - getting people’s products to them reliably. Processing orders and delivering products is probably the biggest challenge. We are and have to be strong in that area.

You are astute about what prod-ucts to take on. After your infomercials for Brooke Shields Pantyhose ranon TV in Spain, the company receivedmore than 4,500 orders per day. How do you know what’s going to work?

Actually, certain products have universal appeal. People all around the world want to look good. In many cases, that means fitness and apparel products. They also want to be healthy, to experiment with different types of cooking and different houseware products.

So, first, we look for products that have universal appeal. Then we look for things that will make our lives easier. Products that are more diflicult to handle overseas are typically hard to market, electrical products for one. We will handle them, we just have to go through each regulatory authority to get approval for the electrical units in each country. We also might have to do local manufacturing. In most cases, we look for things that aren’t too expensive, although cost varies by market. If we are working in japan or Europe, we look for things that aren't too big. In the United Kingdom and japan, especially, people have smaller homes and don’t have the space to put a Nordic Track, for instance.

We look at the universal appeal and the local market attributes. We try to find things that don’t have too much of an American orientation. We rarely take on relationship products, for instance, like how to have a better relationship, because they `just won’t translate to other countries.

How will the industry be different 10 or 20 years from now?

That depends what country we’re talking about, but I think it will be vastly different everywhere. We are going to see very different media landscapes.

ln a mature market like the United States, that’s going to mean eroding market shares, viewing shares, for all the different TV stations. That also will apply in many countries.

We are going to see a lot of deregulation, a lot of media competition. There will be much more available time, which can only help us. One of the biggest restrictions is media availability. We are going to see that really loosen up.

We are also going to see a lot more growth in other forms of media, such as the interactive environment. The lessons we have learned from television, direct mail and print are applicable to the Internet or the interactive environment, because they’re about getting someone to respond.

We are in the interactive environment already. We are also on the Internet, constantly creating new features and services, We are responding to what we hear people and clients want - that’s how we manage to build and maintain such strong synergetic relationships. And that’s what will take us into the future.