In the previous post I stated:

The PedEgg product has earned over $450 in revenues since 2007. It is just one of many DRTV product successes.

Below is how the sentence should have been stated:

The PedEgg product has earned over $450 million  in revenues since 2007. It is just one of many DRTV product successes.

Oh well, sorry for overlooking that one!

I'll first discuss the the economic case for DRTV and then describe the importance of testing.

Economic Case for DRTV

I mentioned that only 3% of otherwise promising innovative new products pass muster to become successful DRTV products. The capital risk is high for all the business partners involved in the venture (except the inventor!). Also, there are many other paths forward for innovative new products where the odds of success are much higher.

So, why bother with DRTV?

A DRTV campaign, by design, is a blitzkrieg that broadcasts a new product every day to millions of TV viewers.

Later when those viewers see that same product in retail stores, they are much more likely to purchase it over competitive products they don't recognize. Which would you buy, the Sham Wow or some other chamois? The Sham Wow!

As a result, a successful DRTV campaign can yield huge revenues in a short time span, making all of the partners a great deal of money. A product like PedEgg that sells a phenomenal $450 million guarantees the inventor (and all the business partners) will make millions from it. Most DRTV campaigns will never earn these kind of eye-watering revenues, but some do.

Testing, Testing, Testing

DRTV entices with the potential for high reward, but the daily reality is that of high risk.

The business partners mitigate the high risk through two types of testing:

  1. Web testing
  2. TV testing

If a product looks promising for DRTV, the first step is to do a web test.

The web test involves doing a large email blast to approximately 50,000 recipients to see if the product has a pulse. If a small fraction of recipients indicate a wish to buy the product (typically less than 10), the web test is considered successful – the product has a pulse. For the vast majority of promising products that do not have a pulse, the web test is the first and the last step.

The next step, TV testing is only done for products that have web tested successfully.

TV testing is considerably more expensive than web testing. A short, compelling script (the pitch) is written to fit into a 1-2 minute TV commercial. A production team must assemble talent and resources, shoot and edit the commercial. Then it is TV tested with a few media buys or spots on appropriate cable TV channels designed to appeal to a good demographic profile of viewers.

If the initial TV testing is successful, some more spots will be purchased to validate the initial TV testing results. Only after successful validation TV testing is a product likely to be given the green light to move forward to a full rollout with lots of TV commercials and product in retail stores.

If your product reaches this stage, congratulations! You may be the next DRTV hit!

Stay tuned.