Monday, January 28, 2008

Direct Marketing Success Story Pt. 1

Starting from scratch, Peter Koeppel has grown Koeppel Direct into one of the leading direct response media-buying firms in the U.S. Peter is a Wharton MBA, with over 25 years of marketing and advertising experience. Koeppel has helped Fortune 1000 businesses; small businesses and entrepreneurs develop direct marketing and infomercial campaigns to increase profits. Here is part one of an interview of Peter Koeppel by John D. Schulte.

JDS: What was your life like when you were a kid? Were your parent's business owners, or show other entrepreneurial traits?

Peter: My father was an entrepreneur. He owned a car dealership. It was a family business. I worked there growing up doing everything from answering the phones, to moving cars, to helping out in the service department. My parents believed in a good education, so they moved to an area with a good school system in New York. Many accomplished entrepreneurs lived in the area, so I was exposed to a wide range of hard working business people that had achieved financial success by starting their own business.

JDS: Did you have any business people you looked up to, or wanted to be like?

Peter: I was greatly influenced by my uncle, who was an extremely successful entrepreneur. He was a son of an immigrant, who started with nothing and built a banking, real estate and hotel empire. Starting as young boy and through the time I was in college, I worked at his hotel during the summer in various positions, such as a caddy, being in charge of the golf carts and working as a front desk clerk. This experience gave me insight into how a successful business was run and it also gave me the opportunity to see how my uncle conducted business. My uncle was a very hard nosed and intimidating businessman, but he had a soft spot for kids and enjoyed helping them with their careers and other life issues. So he was definitely a mentor to me during my formative years.

One lesson my uncle taught me still stands out in my mind today. My cousin and I were running the driving range at his hotel one summer. While we were picking up golf balls on the range, we left the cash register (it was actually a cigar box) unattended. Later on that day, our boss came by and asked us for the proceeds from the register and then we noticed that the money was missing. He informed us that we were in big trouble and that we needed to tell my uncle about this. My cousin and I were quite nervous about telling my uncle about the loss. We decided that I would be the one to tell him. After he listened to my story, he let us know that my boss had taken the money when we weren't looking to teach us a lesson about keeping track of the company's money. It's a lesson I never forgot.

JDS: What made you want to start your own business?

Peter: I helped build a general ad agency business over nine years with three other partners prior to forming Koeppel Direct. I started working with a few of the franchisees for direct response television marketer, Hair Club for Men, towards the end of my time at that agency. I really liked the accountability of direct response advertising, but the other partners at the agency were more brand advertising oriented and were more interested in winning awards than generating results. They, like many other general ad agency people, looked down on direct response advertising and considered it more selling than advertising. At that point, I felt it would be best if I parted ways with that agency and I decided to start up a direct response media buying business, where I could focus on working for clients interested in measuring and tracking the ROI from their advertising campaign.

It was scary breaking off on my own at a time when I had two young children and my wife wasn't working. My wife was supportive of my endeavor and believed that if I worked hard I could make it a success. It turned out to be a good move. Based on strong results, I was able to secure the media buying for most of the Hair Club franchisees within a year of starting Koeppel Direct. The franchisees then introduced me to the parent company, which was struggling, and they tested my company against their current agency, a big direct response media-buying firm in New York. We were able to reduce their cost per sale by 75% and eventually won their entire business.

Tuesday, January 8, 2008

The Writers’ Strike: What might it mean for DRTV advertisers?

As the Hollywood Writers’ Strike continues on without the likelihood of an acceptable compromise in the near future, many wait with anticipation to see how television will hold up.

Even in the face of emerging competition of digital media by way of YouTube and MySpace and the proliferation of shows created exclusively for online distribution, television networks have maintained a position of stability, not considering these additional media outlets to be significant competition.

The Writers’ Strike could change all of that.

Television execs were perhaps unconcerned by the competition of new media because the networks continued to deliver quality, innovative programming that consistently and even increasingly drew viewers and advertisers. But, without the writers, these fresh shows will be no more. Instead, viewers will be subjected to re-runs and more reality-based programming. This could, down the road, lead to decreased ratings and in turn, decreased advertising dollars.

Does this mean a gloomy death for television? Absolutely not!

DRTV marketers would be wise to hold off on reallocating all of their advertising dollars right now. Instead, they would be best served by taking advantage of lower television advertising rates and ramping up dollars spent in online advertising and other new media outlets.

The outcome of this event will be a direct response advertising diversification of sorts, representing a great opportunity for advertisers to take advantage of a growing trend while it’s still in this early stage.