Long-Form DRTV Purchaser Attitudes & behavior Study December 2013 2 THE STUDY RESEARCH OBJECTIVES & SCOPE Cannella Response Television, Script to Screen and M2 Key questions addressed in the study include: Marketing and Management commissioned a study in December • Among TV viewers, what is the demographic profile of of 2013 to learn more about purchasers of infomercial products the modern day infomercial purchaser and how do they (half-hour length TV advertisements). compare to the non-purchasers? The infomercial industry has evolved over the past 30 years, and • How does TV viewing behavior differ between this study sought to identify gaps that may exist between purchasers and non-purchasers? perceptions derived from the past and the reality of today. In addition, there is little research available about infomercial • How has mobile technology impacted the TV marketing, and the study provides more insight into this niche consumption between the two groups? sales and advertising channel. • How satisfied are infomercial customers with their This study evaluates whether people who watch TV and buy purchase? infomercial products differ from TV viewers who do not purchase • How effective is infomercial advertising at engaging and infomercial products across several key dimensions. persuading potential buyers? LONG-FORM DRTV • Purchaser Attitudes & Behavior Study • © Copyright 2014 • 3 THE STUDY METHODOLOGY An online survey was conducted by a third party to include a national representation of TV viewing purchasers and non-purchasers of infomercial products. Given the scope of the study, the survey included only adults who watched some TV, have seen some part of an infomercial and do some shopping from home. Of the 1,529 adults contacted, 87% have purchased something from home (either through a website or by phone), 93% of them met the TV viewing criteria (minimum 4 hrs/wk), and 84% of them have seen an infomercial in the last 5 years. This netted 1,020 qualified respondents A national to proceed with completion of the survey. All respondents were informed that some questions would deal with infomercials, described as “half- survey of 1,020 hour programs that you see on TV that describe a product.” Respondents were then categorized as purchasers and non-purchasers based on their response to the question - “Have you purchased a Infomercial product as a result of a TV infomercial in the past 5 years?” The following results were from 559 !respondents who were purchasers and 461 participants who were non-purchasers. purchasers & To ensure the respondents were purchasers of products from a long-form advertisement or infomercial campaign, as opposed to those of short-form (advertising of 2 minutes or less that contains a direct call non-purchasers to action) campaigns, all respondents were also presented with a list of brands that are primarily or only !available through long-form advertising and asked to confirm the product they purchased. This study does not attempt to quantify what percentage of the US TV viewing population is a purchaser of infomercial products. The survey was administered by David Bohnsack, Ph.D. LONG-FORM DRTV • Purchaser Attitudes & Behavior Study • © Copyright 2014 • 4 THE STUDY EXECUTIVE SUMMARY 1. There are distinct demographic differences • Nearly two-thirds of purchasers (and non- Buyers of between the infomercial purchaser and the purchasers) watch more than 12 hours of infomercial non-purchaser. television per week. products with a household income • Skews younger than their TV viewing, non- • Purchasers are much more active in-home 62% greater than buying counterparts (online) shoppers. Both purchasers and $50,000 non-purchasers are increasing their time • Have higher household income than non- spent shopping from home purchasers 3. Infomercial purchases embrace digital • Have more people in his or her household Buyers of technology to a greater extent than non- infomercial and has more children under the age of 19 purchasers and use a mobile device while products that shop in the home watching television much more frequently from home at least than non-purchasers. 40% • Tends to be more ethnically diverse once per week • Two-thirds of all infomercial purchasers own • Is no more or less likely to be a female than a non-buyer who watches TV a tablet device and a quarter of them use their tablet while watching more than 50% 2. Infomercial purchaser lifestyle interests of the time Buyers of skew higher across several dimensions. infomercial ! 80% products that own a • Purchasers of infomercial products spend smartphone more time exercising, watching movies, and following sports LONG-FORM DRTV • Purchaser Attitudes & Behavior Study • © Copyright 2014 • 5 THE STUDY EXECUTIVE SUMMARY Buyers of Buyers of Buyers of infomercial infomercial Buyers of infomercial products who products who infomercial products who were satisfied would products who took action 88% with their last 74% recommend their 79% buy directly from 90% within the first 3 the manufacturer viewings of the purchase last purchase program 4. Infomercial purchasers have a favorable opinion of the products they buy through the TV. • 81% of buyers of infomercial products have bought two or more products in the last 5 years. 5. Infomercial purchasers use word-of-mouth & social media to recommend products they buy more often than non-purchasers 6. Infomercials offer marketers an opportunity to develop 1:1 relationships with their customers. 7. Long-form infomercials have engaging and persuasive properties that drive sales transactions • Three-quarters of infomercial customers made their purchase while the advertising was running or within a few hours after it aired • Nearly one-third of all infomercial customers watch infomercials because they find them interesting or entertaining • Almost half of infomercial purchasers say they are engaged for the entire length of the program LONG-FORM DRTV • Purchaser Attitudes & Behavior Study • © Copyright 2014 • THE Infomercial Purchaser A close up look at half-hour direct response television advertising from the customer’s point of view. LONG-FORM DRTV • Purchaser Attitudes & Behavior Study • © Copyright 2014 • 7 our analysis PURCHASER/NON-PURCHASER DEMOGRAPHICS 42% 46% Males Males 58% 54% Females Females Purchasers Non-Purchaser Base Purchasers – 559 LONG-FORM DRTV Purchaser Attitudes & Behavior Study © Copyright 2014 Non-Purchasers - 461 • • • 8 Purchaser our analysis Non-Purchaser Significant difference at 95% level PURCHASER/NON-PURCHASER DEMOGRAPHICS Age Income 2% 2% 21% 17% 27% 15% 17% 18% 20% 22% 11% 19% 3% 7% 13% 18% 27% 29% 27% 23% 15% 13% 8% 7% 6% 4% 3% 2% 3% 3% Under 20 - 29 30 - 39 40 - 49 50 - 59 60 - 69 70 Under $25,000 - $50,000 - $75,000 - $100,000 - $125,000 - $150,000 Over 20 $25,000 $49,999 $74,999 $99,999 $124,999 $149,999 $174,999 $175,000 Base Purchasers – 559 LONG-FORM DRTV Purchaser Attitudes & Behavior Study © Copyright 2014 Non-Purchasers - 461 • • • 9 Purchaser our analysis Non-Purchaser U.S. Census PURCHASER/NON-PURCHASER DEMOGRAPHICS Bureau - 2012 Significant difference at 95% level 68% Caucasian 82% 78% 13% African American 8% 13% 9% Latino 4% 17% 7% Asian 4% 5% 2% Multiple 2% 2% Base Purchasers – 559 LONG-FORM DRTV Purchaser Attitudes & Behavior Study © Copyright 2014 Non-Purchasers - 461 • • • 10 Purchaser our analysis Non-Purchaser Significant difference at 95% level PURCHASER/NON-PURCHASER HOUSEHOLD SIZE Q: How many people live in your household? Q: How many children under the age of 19 are in your household? 14% 18% 25% 43% 24% 16% 21% 14% 10% 5% 3% 3% 1% 1% 45% 67% 25% 18% 21% 9% 6% 5% 2% 1% 1 2 3 4 5 6 7 0 1 2 3 4 Base Purchasers – 559 LONG-FORM DRTV Purchaser Attitudes & Behavior Study © Copyright 2014 Non-Purchasers - 461 • • • 11 Purchaser our analysis Non-Purchaser Significant difference at 95% level OTHER ACTIVITIES Q: During an average week, about how many hours do you spend on each of the following activities? Purchasers are more likely to spend more than 8 hours per week exercising, and tend to watch movies more often. There is no difference between the groups in terms of Internet activity. 40% 37% 33% 26% 27% 25% 25% 25% 25% 24% 21% 18% 13% 12% 11% 9% 8% 8% 8% 4% Following Less than 1 1 - 3 4 - 7 8 - 12 More than 12 Exercise & Less than 1 1 - 3 4 - 7 8 - 12 More than 12 Fitness Sports 37% 38% 55% 53% 29% 26% 19% 16% 23% 20% 11% 12% 17% 17% 5% 6% 7% 6% 1% 1% Movies Less than 1 1 - 3 4 - 7 8 - 12 More than 12 On Internet Less than 1 1 - 3 4 - 7 8 - 12 More than 12 Base Purchasers – 559 LONG-FORM DRTV Purchaser Attitudes & Behavior Study © Copyright 2014 Non-Purchasers - 461 • • • 12 Purchaser our analysis Non-Purchaser Significant difference at 95% level TV VIEWING TRENDS Q: During an average week, about how many hours do you spend watching TV? Q: During the past 12 months, would you say that the total amount of time you spend watching TV has... Nearly two-thirds of purchasers and non- More than half of purchasers have seen their TV purchasers watch more than 12 hours of watching increase in the past 12 months, while television per week. two-thirds of non-purchasers have maintained their viewing behavior. 66% 64% 65% 56% 38% 22% 22% 19% 14% 13% 13% 6% 4 - 7 8 - 12 More than 12 * Increased Stayed the same Decreased * This study did not quantify how many hours of television each group watched above 12 hours per week Base Purchasers – 559 LONG-FORM DRTV Purchaser Attitudes & Behavior Study © Copyright 2014 Non-Purchasers - 461 • • • 13 Purchaser our analysis Non-Purchaser Significant difference at 95% level MOBILE DEVICE OWNERSHIP Q: Do you own a mobile device? Purchasers are more likely to own every type of digital device Smartphone 80% 58% Tablet 65% 40% Laptop 84% 75% Computer 79% 73% Base Purchasers – 559 LONG-FORM DRTV Purchaser Attitudes & Behavior Study © Copyright 2014 Non-Purchasers - 461 • • • 14 More than 75% our analysis 51% to 75% 25% to 50% MOBILE DEVICE USAGE WHILE WATCHING TV: FREQUENCY Less than 25% !Q: How often do you use your mobile device while watching TV? Overall, smartphones are more likely to be used while watching TV than other devices.