IRMA urges DMers to use VHS The International Recording Media Association’s latest effort to promote VHS tape’s survival well into this decade focuses on the use of videocassettes in direct marketing.
At a Nov. 30 press conference in New York, IRMA president Charles Van Horn revealed the highlights of a study commissioned by the organization that investigated the size of the market for “non-traditional” videocassette applications, including marketing, promotions, premiums, instruction, information and communication.
In 1999, these applications generated some 111 million units worldwide – 84 million in the United States alone – a 17% increase over 1998. IRMA, of Princeton, NJ, is projecting a U.S. volume of 90 million units in 2000 and 95 million in 2001.
The study, “VHS Delivers Marketing Edge: Non-traditional Uses of Videocassettes,” conducted by Stamford, CT-based management consulting and market research firm Cambridge Associates, concentrated only on business-to-consumer uses of videocassette marketing. It did not include business-to-business uses, such as corporations that distribute tapes describing employee health benefits.
For the study, Cambridge principal Dick Kelly said interviews were conducted with 30 duplicators, as well as 100 U.S. DMers that have used videocassettes for marketing purposes. Collectively, they account for 16.1 million videocassettes in 1999, or 20% of the U.S. total.
IRMA worked on the study with the American Video Duplication Association, whose members also are interested in continuing the growth of the VHS format, and the Direct Marketing Association, whose senior vice president Peter Eustis was on hand at the press conference to endorse the research. Eustis added that DMA members will be urged to obtain a full copy of the study from IRMA.
Comparing the production and mailing costs of videocassette marketing vs. print marketing, the study reports that a tape is only slightly more expensive on a per-unit basis. The average cost of duplicating and mailing a videocassette is $1.34, as opposed to $1.26 for printing and mailing a similar print catalog or brochure.
A typical promotional videocassette costs about 30 to 35 cents to mail, said Paul Scott, senior vice president for worldwide sales at Camarillo, CA-based videocassette duplicator Technicolor and a co-chairman of IRMA’s VHS committee. He added that marketers generally use just enough tape for the program, which runs an average of 12 minutes, to keep the weight under 5 ounces. According to Cambridge Associates’ Kelly, “We wouldn’t have been able to have this press conference four or five years ago. The cost of a videocassette was well over $4.” He attributed the decline to a reduction in tape prices and advances in high-speed duplication.
Van Horn pointed out that VHS tape presentations provided 45% greater recall of the product being advertised, compared with print marketing.
But more importantly, mailing a tape generates far higher results and an average response rate of 8% (resulting in a sale), although the rates ranged from 4% to 20%. In contrast, direct mail campaigns that pull a response rate of 2% to 3% are considered good.
The study found that videos were viewed by 70% of the recipients, with 80% watching within the first four days of receiving the cassette.
In the United States, videocassette marketing represents only $100 million of the estimated $152 billion spent by marketers in 1999 on direct marketing.
Technicolor’s Scott referred to promotional duplication as “an untapped market.” He then cited several case studies of marketers, including national retailer PetSmart, which used videocassettes locally in markets where it was opening stores. The retailer sent 3,000 tapes to addresses in the store’s immediate vicinity. Some 10% to 15% of customers at checkout counters cited the videocassette as the reason for coming to the store.
Bedding retailer and mattress manufacturer Select Comfort sells a $1,000 bed and had a 20% sales conversion rate. Company spokeswoman Leslie Quigley said that without the video the retailer wouldn’t have achieved the success it has.
EZPainter supplied a how-to videocassette with its house-painting system that resulted in fewer returns – a different kind of success.
Scott said he also knew of a car manufacturer that was marketing a $40,000 model. It mailed 300,000 videocassettes and sold 4,400 cars.
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