New Venture Seeks to Make DRTV Products More Like Impulse Buys

TVGoods and Delivery Agent Will Let Consumers Use Remotes, iPhones to Purchase Items Pitched in Infomercials

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It's about to get much easier to buy such things as Yoshii Blades, Snuggies and Shake Weights.

The TVGoods website with CEO Kevin Harrington.
The TVGoods website with CEO Kevin Harrington.

Direct-response marketer TVGoods, fresh off last week's acquisition of direct-response megasite AsSeenonTV.com, is partnering with Delivery Agent to launch a system that later this year will let people in 20 million U.S. households buy products pitched on infomercials with a click of their TV remotes, without having to head to their computers or deal with telephone operators standing by .

In some cases, they'll also be able to buy stuff they see on regular programming -- say the sweater a character on a TV show is wearing -- the same way as when they get a pitch to do so via ads overlaid on the bottom third of their screens.

Those in other households will also potentially be able to buy direct-response products without leaving their couches, just by holding up iPhones or Android devices to catch the sound of an infomercial. Essentially using a direct-response advertising equivalent of Shazam, the app should recognize the ad and take shoppers to a checkout screen, said Mike Fitzsimmons, CEO of Delivery Agent.

Delivery Agent runs TV Wallet, a "transaction engine" that stores users' shipping and payment data to speed commerce for more than 200 entertainment and sports marketers, including CBS, NBC and Fox.

Kevin Harrington, CEO of TV Goods and one of the "sharks" on ABC's reality venture funding show "Shark Tank," is expected to integrate the new "t-commerce" venture on a future program. While he's launched more than 500 products with combined sales of more than $4 billion in his direct-response career, he acknowledges that "the real money to be made in this business is on the back end," which he defines as everything from selling DR products through conventional retailers to selling them on sites such as AsSeenonTV.com or, in the case of Proactiv, cashing in on repeat purchases of satisfied customers. The interactive-TV collaboration with Delivery Agent is one more way of plying that "back end" trade.

Cheap as it may seem, direct-response time is far from profitable in most cases, Mr. Harrington said, noting that 75% of the sales from a typical DR ad go to pay for the media. A tight scatter market the past two years has further squeezed profits for direct sellers. And the prospect of finding slots for massive make-goods should an NFL lockout happen only makes matters worse.

The click-to-buy collaboration with TVGoods and AsseenonTV has potential to increase sales from DRTV by essentially making the transaction an "impulse purchase," Mr. Fitzsimmons said. Delivery Agent will give users the option of filling their virtual shopping carts and checking out later. Tests so far indicate people who save their purchases for later tend to seal the deal the next morning from their computers at work (an email notification provides the link that allows them to finish).

But Mr. Fitzsimmons, of course, is hoping most will opt to buy products on the spot and that many people who might have hesitated because of the time it takes to call or complete a transaction online will be more prone to buy when the transaction is so effortless. One can only image how much more Oxi Clean and Might Putty the late Billy Mays could have sold had this been available a couple of years ago.

Unlike some other interactive TV ventures, TVGoods and Delivery Agent don't require new remotes or technology investments by cable or satellite operators, Mr. Fitzsimmons said. The transactions can be completed using the operators' channel guides and remotes for consumers using internet-protocol-enabled TV sets. In the case of the infomercial-recognition mobile apps, participation by cable and satellite operators and IP -enabled sets isn't even required.

Of course, ITV and addressable TV dreams to date have had a tendency to dissipate like so much pixie dust in the harsh light of the marketplace. The TVGoods and Delivery Agent click-to-buy venture in some ways resembles a proposition created by BackChannelMedia (now BCM) in 2007, now in test in Montgomery, Ala.

BCM does require some technology investment by cable operators, but it's not just a technology issue, said BCM Chairman Dan Hassan. It's also a matter of finding the right revenue-sharing formula with operators and with getting them to focus on an area -- advertising -- that remains a fairly small part of their revenue stream now.

"It really comes down to getting a service provider to play nice and actually let that data pass back and forth," Mr. Hassan said.

But he still sees "the click" as the future of TV advertising. And, like Mr. Fitzsimmons, Mr. Hassan sees more-conventional national advertisers as eventual major players. The most clicked-on proposition for BCM in the Alabama test so far has been for $1 off coupons from a local Hardee's franchisee.

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