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Videos Add Focus and Economy to Advertising

Videos can cost less than TV commercials and get better results

THE yellow light sweeps over a gray metallic 1994 Chrysler LHS in the car manufacturer's latest direct mail video.

Images of the new car shot in the city and out in the mountains are accompanied by glowing comments from Chrysler employees, an architect, a publisher, and an art director.

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Chrysler mailed 200,000 of the 10-minute videos out to potential customers, says Jim Cherfoli, merchandising manager for the Chrysler-Plymouth division.

This is advertising's ``new thing,'' says Marcie Vorkink, executive assistant of Clear Image, a direct marketing company in Orem, Utah. ``It's an up-and-coming ad tool. It's unique.''

As television audiences shrink, and VCRs find their way into most households, video is becoming a winner in advertising.

``In the United States, the use of videos [in advertising] is growing at a rate of more than 15 percent a year,'' says Jerry Jakes, president of Productivity Plus, a management consulting firm in Toledo, Ohio.

Both television and videos are good at demonstrating products as well as eliciting viewers' emotions. But reaching potential customers through television advertising can be expensive and unfocused because of the great number of channels. The Big Three networks reach only about two-thirds of households and the number has been declining. But 80 percent of all American households have a VCR, according to the Electronic Industries Association.

Video advertising has several advantages over other forms of advertising. Ads can run longer than on TV, cost less to make overall, and are cheaper to distribute than catalogs.

Unlike TV's 30 or 60 second commercials, video ads can be five to seven minutes and sometimes longer. Although, ``after seven minutes the viewer loses attention,'' Mrs. Vorkink says.

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Clear Image estimates that mailed videos in the US usually cost about $1.75 each, including production, duplication, and postage. The cost drops with the number of videos duplicated.

``We recommend from 10,000 to 50,000 to 100,000, depending on how much you want to saturate the market,'' Vorkink says.

Chrysler's video was, however, much more expensive than TV advertising. But the company considered it was worth it, Mr. Cherfoli says. ``With video you can give more complete information and you can focus on people that are more likely to buy the car,'' he says.

The tapes can be distributed like direct mail and qualify for the cheap book rate of $1.05.

``The color [print] brochure needs first-class mail.... If you compare the total package, it's less expensive with video,'' Mr. Jakes says. ``Also, you have to take into account how many will read a brochure - measure the efficiency. Everyone will watch a video.''

``The response to direct mail videos is usually three times as high as that of regular print mail,'' adds Kerri Scarbrough, marketing associate director at Clear Image.

Videos as advertising tools are commonly used three ways:

r As direct mail to individuals. Chrysler, for example, sends its videos to specific households, selected on the basis of luxury-car ownership, income, and education, Cherfoli says.

r As free offers advertised through other medium. Nordic Track, a home exercise equipment company, uses TV commercials and other advertising to lure customers with a free video and brochure, says public relations manager Julie Wohlfors. Customers have to call a toll-free number and request the material.

r As a business-to-business marketing tool. Jakes says direct mail videos work best in this arena. He considers videos especially good for explaining complicated technical products, such as industrial manufacturing processes or computers.

``A grocery store could be a good customer to send a video to,'' Jakes says. ``But for a consumer that goes to the store, it's better to make a television commercial, because for consumer goods there are thousands of millions of possible customers.''

This is the method SAAB USA has used. To promote its latest model, SAAB sent a video to eight of its dealerships as a part of an advertising package.

Whichever way videos are used, advertising specialists agree that a video should always be part of a whole advertising package.

The video should either entice the customer to act - for instance by entering them into a draw if they contact the company -

or be followed up by a phone call or a personal call.

``The first [sales] call is a one-way communication with the salesman describing his product,'' Jakes says. ``The second call can be a two-way communication. If you send a video first and then make a call, you have a two-way communication right away.''

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