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MARKETING WITH VIDEO;THE CASSETTE IS IN THE MAIL; WITH VCRS IN 85% OF HOMES, AN EAGER, BUILT-IN SYSTEM LURE COST-CONSCIOUS DIRECT SELLERS

By Published on .

Before Nintendo of America's Donkey Kong Country became a hit videogame, it was a smash on video.

Last fall, the marketer created a 13-minute, MTV-style documentary video introducing the game and sent 2 million copies to subscribers of Nintendo Power and recent buyers of the Super Nintendo Entertainment System.

Partly due to this video direct mailing, Nintendo moved 6.1 million units of the game in the last 45 days of 1994, making Donkey Kong Country the fastest-selling game in the 20-year history of the videogame industry.

The high penetration of videocassette recorders in U.S. homes has created a potent direct-marketing option: video. With VCRs in 85% of U.S. homes today, up from 50% in 1986, video is mushrooming as a marketing vehicle.

The number of tapes distributed by marketers has grown from 5 million in 1988 to 60 million in 1994 and a predicted 85 million this year, according to Barry Johnson, president of Duplication Factory, a tape duplicator.

Helping boost this figure: the falling cost of video duplication.

"If you package a 10-minute video in a four-color box and mail it, you can do it for $1.50. Compare that to a typical brochure, which could be $8-$12 apiece," says Bill Wilson, marketing manager at tape duplicator Technicolor Video Services.

Creative production costs range upward from $6,000, but a well-orchestrated program doesn't have to run a six-figure creative tab.

Unlike with traditional direct-mail packages, video is seen as a novelty by consumers. As a result, even though marketing with video is growing, consumers are less apt to throw out cassettes than direct-mail printed pieces.

According to in-house research from Duplication Factory, 70% of consumers who receive videos look at them.

Video represents a way to combine target marketing with moving images. Nintendo's Donkey Kong Country video let the marketer showcase the game's rapid pace and intricate graphics.

"In many cases, we don't show a lot of [game] footage" in TV spots, says George Harrison, Nintendo's director of marketing and corporate communications. "But we felt this was different enough to do it."

There's no real common denominator among the companies marketing with video. Users range from small organizations, like the Beverly Hills (Calif.) Visitors Bureau, to numerous auto marketers.

Toyota Motor Sales USA's Lexus division sent videos to announce last fall's relaunch of the LS400 model.

"We wanted to communicate the changes in the new vehicle and the product benefits," says Steve Haag, sales and marketing manager for the Lexus LS400.

The main similarity among these video direct-marketing programs, however, is that the marketer wants to tell a long story that can't be explained properly through print.

Rumrill-Hoyt, Rochester, N.Y., created a two-video series last fall to introduce the Synchrony STS soybean seed/herbicide system for client Du Pont Agricultural Products. The story of the use and benefits of this system was too complex to put in a print ad, says Bob Midles, account exec at the agency.

As a result, the agency used two videos to discuss not only the development and benefits of the system but also include farmer testimonials to the system's abilities to control weeds and boost crop yields.

Rumrill-Hoyt did tracking studies in the winter and found more than 50% of the names randomly pulled from a Du Pont database remembered seeing the tape.

"For them to remember a tape three months later-that had a trememdous impact on audience," Mr. Midles says, predicting Du Pont would meet its sales objectives.

The relative novelty of video hasn't stopped some marketers from rethinking their video approaches.

After mailing 1 million tapes over three years, World Wildlife Fund, an environmental conservation organization, is taking a year off from using video to refine its use of the medium, says Sarah Parkinson, manager, member acquisition and retention programs.

The videos, part of the membership renewal package, showed some of the projects accomplished with membership funds.

"Members have seen it for a few years and are thinking it's the same one," says Ms. Parkinson. In addition, she says, similar organizations also are doing videos, creating clutter among groups in this field.

"We're going to try to compile more information to determine very specifically who would be interested in receiving videos, and perhaps find other uses for a video," she adds.

The reports of reduced use of video are few and far between.

"No one's backing out," Mr. Wilson says. "There hasn't been any retraction in the amount of orders from our existing customer base. They'll typically order and up their reorder."

Although the business is growing, there are several applications that appear ready to explode.

One is political fund-raising, especially with the 1996 elections around the corner.

"Videos eliminate [audience] waste, allow for personalized, targeted messages .... and keep the media from critiquing the message," says Tom Edmonds, president of Edmonds Associates, a Republican media consulting firm. "I have a clean shot with the [recipients] without having the media do the interpretation of that message."

Laura Loro contributed to this story.

Nintendo last fall made a video explaining the game's features.

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