Direct Marketing Success Story Pt. 2

JDS: Were you entrepreneurial at an early age? For instance, did you sell lemonade on the corner, shovel sidewalks or deliver newspapers? And if so, did your parents push you that way, or was it more part of your DNA?

Peter: I was not particularly entrepreneurial at an early age, but some of the jobs I had as a kid growing up peaked my interest in a business career. My parents wanted me to be a doctor. My mother often said to me, "If you're not going to be a doctor what are you going to do?" So there was definitely pressure on me to pursue a career in medicine or to pursue an advanced degree or become a professional in some field. I think that was one of the reasons I was motivated to earn an MBA in marketing from The Wharton School. I think the Wharton degree helped to establish my credibility with employers and new business prospects, but once you started working with a company or client the bottom line is the type of performance you can deliver for them and most could care less about your degree.

JDS: Were you ever involved in any other business before you started the infomercial business you're in now? If yes: What happened with it?

Peter: I worked as a brand manager on the Heinz Ketchup business when I got out of Wharton and then I worked at a large advertising agency, The Richards Group, before three other guys from that agency and I left to form our own ad agency, which I discussed earlier. We worked together for nine years before I broke off to form Koeppel Direct. That agency is still in business, but my DRTV agency has grown significantly and is now much larger than that agency.

JDS: Did you ever have a business idea you didn't act on? If yes: Do you ever catch yourself thinking, "Why didn't I do that?" or was it more, "Thank God I didn't do that."

Peter: I've definitely have had business ideas I didn't act on. I decided a number of years ago it was more fruitful for me to concentrate on ideas for growing my business rather than developing new businesses that might be outside my field of expertise.

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.

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.

Increasing the Reach of Google's Advertising

Google is looking to become the dominant player in mobile advertising, just like they have been the leader in online advertising. Google hopes that making it easier for consumers to access the web from their cellphones and making the experience more like that of a personal computer will increase the reach of their advertising. Google said it will likely share ad revenue with the wireless carriers, according to the Wall Street Journal (11/6/07).

Energizing the Mobile Industry

"Just like the iPhone energized the industry, this is a different way to energize the industry," stated Sanjay Jha, COO of Qualcomm (NY Times). Mr. Jha also said Google's efforts will bring more Internet features to moderately priced phones. By allowing outside software developers access to their Android software platform, Google also hopes they will create new types of devices that have both cellphone and wireless Internet capabilities. "As a result of the platform, you'll be able to do amazing things on your phones that you've never been able to do before," says Google CEO Eric Schmidt. (USA TODAY 11/6/07)

Diversifying their Revenue Base

Google is going up against some strong competitors, but they certainly have the clout and resources to gain a significant foothold in the mobile marketplace. Google's surging stock price clearly indicates that Wall Street and investors anticipate that Google will be able to diversify their revenue base from new businesses outside of online advertising. In my opinion, mobile advertising has the potential to be as big as online advertising for Google. It will be interesting to see how Google's venture into mobile plays out over the next few years, since it has the potential to transform the industry.

Peter Koeppel is Founder and President of Koeppel Direct, a leader in DRTV direct response television, online, print and radio media buying, marketing and campaign management. With a Wharton MBA and over 25 years of marketing and advertising experience, Peter has helped Fortune 500 companies, small businesses and entrepreneurs develop direct marketing campaigns to increase profits.

Peter started Koeppel Direct in 1995 and has built it into one of the leading infomercial direct response media buying firms in the U.S.

How To Market to Baby Boomers

Boomers were the first generation to grow up with TV, so it makes sense that they still prefer this medium as they age. In fact, on average, Boomers watch 22 minutes more TV per day than younger people, according to Nielsen Media Research. And since TV viewership increases with age, as the Boomers mature, their TV viewing time will continue to rise. What does this mean for infomercial marketers?

Focus on the right type of programming. Boomers tend to watch programs that center around life stages. For older Boomers, shows like CSI and Law and Order are favorites. Older Boomers also prefer news programs and are less interested in reality TV. For younger Boomers, shows like Grey's Anatomy and Desperate Housewives are popular. Additionally, science fiction programming is popular with all Boomers, perhaps because this generation watched so much of the genre while growing up. Therefore, if you want your TV ads to reach Boomers in the most cost efficient manner, you have to place them during the shows that Boomers watch.

Boomers don't multi-task. While younger TV viewers are likely to be online while watching TV and may even interact with the program via online voting, text messaging or chat rooms, don't count on that with Boomers. They tend to focus on one media at a time. For media buying experts, that means Boomers won't likely type in your displayed web address while watching your commercial spot. Rather, they'll pick up the phone and call the toll free number you display or go to your website after they finish watching a TV show.

Help Boomers identify with your ads. Since Boomers are not in their 20s and 30s anymore, make sure your ads reflect the needs, wants, and images of older Americans. A 20-year-old perfectly airbrushed model touting an anti-wrinkle cream won't speak to the Boomer market. Go for more mature spokespersons and really do your homework to determine how your product or service helps Boomers. The big categories or "hot buttons" for boomers are security, longevity, money management, wealth transfer, lowering their bills, and travel.

Is the DVR the Demise of TV Advertising?

The Leichtman study predicts that the number of U.S. households with DVRs will grow to over sixty million by the end of 2011. Does that mean that drtv advertisers will have a harder time reaching people who can fast-forward through the commercials? Not necessarily.

The study also points out that while eighty-four percent of DVR owners rate the ability to skip commercials as very important, only eight percent of DVR owners say it is the greatest benefit of having a DVR. Additionally, forty-five percent of DVR owners record five or fewer programs per week, again pointing to the preference for live TV.

The Growth of DRTV

Sieglinde Friedman, VP of communications and strategy at the Electronic Retailing Association, has followed the growth of DRTV and infomercial advertising. "The Geicos and Procter & Gambles are using the actual methodology of direct response – basically, wrapping content around anything in a compelling way with a call to action: 'Come to my Web site!'" Friedman says.

Observes Koeppel: "Consumers who view direct response television appear to be more engaged consumers. And, because of that, marketers are able to develop more of a relationship with those consumers, because they're going to the Web and doing research, or they are talking to a customer service person. It's more of an interactive relationship."

Even in today's fragmented media world, consumers still turn to direct response television. Marketers are integrating multimedia approaches into their strategies, while embracing the essential elements that have made DRTV so effective for so long