When it comes to submitting your product to one of our As Seen On TV (ASOTV) searches, the first thing that may come to mind is seeing your product on an infomercial. Many of you have even expressed to us that when we announce an Edison Nation member’s idea has reached stage G8 and will go into an ASOTV option period (like our most recent announcement for Edison Nation Member, Marvin Blaine) this is typically what is believed to be the next step.
While infomercials are certainly a large (and well-known) aspect of the ASOTV package, there are many steps that must take place between receiving an ASOTV option and reaching this stage. We sat down with Edison Nation’s in-house DRTV Manager, Anna Schau and Intellectual Property Manager, Scott Dromms to answer your questions regarding what the ASOTV option really means.
Q. How is an ASOTV search different from the typical Edison Nation Live Product Searches?
Scott: A typical Live Product Search or “LPS” is a sponsored search where a specific manufacturer or retailer has a specific product line/category of business that they are looking to feed innovation into. ASOTV, on the other hand, is a broad spectrum search for items that have a “WOW” appeal and can specifically address a problem, are a solution for the problem, and give a great demonstration of how the product solves the problem all in less than 2 minutes.
Q. If an inventor’s submission reaches stage G8 in an ASOTV search, will their product get its own infomercial?
Scott: Potentially yes, but not always. In a sponsored LPS, G8 means the sponsor has decided they want to “pursue” the commercialization of the product and they have licensed the rights to it. Is that a guarantee that the product will ultimately make it to market? Not necessarily. Occasionally a sponsor has changes that occur, like market shifts or development and pricing issues that could delay or even prevent full commercialization of the product. Our hope is that once a product reaches G8, it will be the start of a sales life for the idea. ASOTV items will often go into an “option period” which allows a sponsor the due diligence time to consider the item. They have essentially called “first dibs” on the submission in question. They have a period of time for this (typically 180 days), which allows them to develop prototypes, review sourcing options, determine costing, discuss and develop a potential marketing campaign, do market research (focus groups, consumer intercept programs, or 3rd party survey/market research companies) and potentially develop a “test” advertisement that will allow them to gauge the market for the product. The ASOTV world is a world dictated by performance metrics and a product’s potential which can be learned through extensive analysis and extrapolation of those test metrics.
Anna: It’s important to note that during the “testing” period, if a challenge arises that prevents the product from moving forward, the inventor is notified, and options are discussed, which may include other options for commercializing the idea or a release of rights so that the inventor is free to market their product on their own.
Q. When you say “challenges,” what are you referring to?
Anna: The most common challenges are typically developmental in nature and/or issues with the cost of goods. If a campaign’s cost of goods are too high, a marketer’s ability to maintain profitability in a dynamic media environment is very difficult. For instance, on a week to week basis of a campaign, a marketer could be spending 200K-400K on their media buys. If on any given week, the consumer response shifts dramatically the campaign’s profitability is at risk. A weekly loss must be absorbed and if the margins are too tight this is not possible. Mitigating risk is where a marketer’s expertise comes into play.
Q. Suppose a submission reached stage G7 months ago, yet the inventor has not heard any feedback. What is happening during this time?
Anna: No feedback is a good sign. This means your product is still under evaluation by a search partner. Our goal is to find your product a home and we will work all possible channels with various partners to do so.
Scott: Exactly. In typical LPSs, submissions go into G7 shortly before a presentation, once the entire review process has been completed. Once in G7 for an ASOTV search, however, the presentation circuit begins right away. The Intellectual Property team will present to anywhere between 5 and 8 different potential ASOTV partners each quarter, depending upon the partners’ schedules and current needs. This means your submission is being presented to roughly 25-30 sets of eyes (directly) and if the product makes a potential sponsor’s “short list,” it will likely be viewed by their internal team as well…so it is viewed by a lot of people! Once we start doing presentations and begin getting feedback, we are able to update dashboards. After the final presentation, we take those ideas that are still standing and work the channels with various partners trying to get the submission to move forward, at minimum, to an option stage.
Q. What goes on during testing? What are you looking for?
Anna: To launch a product on TV, the campaign must be able to maintain profitability. In order to do so, your product must generate a consumer response significant enough to cover all the marketing costs associated with the product. Costs include: media costs, the cost of goods, fulfillment costs, etc. The testing environment is very dynamic and multiple variables can change the course of a campaign very quickly. Therefore, in most cases, marketers run initial media testing in stages to mitigate risk. With continued signs of life (response), the process is repeated until it can be predicted that the product has great potential for long-term profitability (aka success). Then, it is the magnitude of the rollout (a home run, a single, a double) that will remain a variable. In order to justify proceeding, a campaign’s results have to be scalable to make it a worthwhile pursuit.
Q. How long does the testing process typically take?
Anna: Simply put, it depends. Successful DRTV products are impulsive buys. The consumer has only 120 seconds to determine if they want/need the product. Marketers use their initial due diligence period (option period) to determine if they can manufacture a functioning product at an acceptable price point as well as to determine how to position the product to effectively communicate the marketing message to the target consumer.
Marketers use the testing process for another role. During the testing phase, the marketer’s goal is to determine if the infomercial will generate a large enough consumer response for the product’s campaign to be profitable. Evaluating response includes asking the following questions: Did enough consumers respond (call in or go online)? What networks/programs must be bought to reach the audience? Is there enough media inventory available? What are the media rates? Is the target consumer buying consistently? Can improvements or tweaks be made to the campaign improve response?
All the variables are analyzed and evaluated to ensure the infomercial and related messaging elicits an impulsive response from the targeted consumers. This testing phase will continue until the marketer can answer all the necessary questions about the consumer, their interest in the product and the product’s potential for success. Media testing typically takes between 30-120 days of testing. Yet, in some cases, it is longer due to the variables/challenges and/or obstacles encountered when initial testing begins.
Q.) Why are some products successes, while others fail?
Anna: Success is determined by the consumer. The consumers are the judges and they vote with their wallets. Their impulsive response guides marketers in their strategic decisions. DRTV is a great route for a product’s journey towards commercialization… when the stars align and the metrics prove workable! However, it should be noted the DRTV channel is only one route to the retail marketplace, so a product shouldn’t be considered a failure… it simply did not work under the given circumstances at this particular time on TV, but there are many other ways Edison Nation and our partners can bring your product to retailers.
Q.) If a product does not succeed during testing, does the inventor still have rights to it? Can he/she submit it to other companies or searches?
Scott: The rights to a submission in an ASOTV search, like in any Edison Nation LPS, are returned to the inventor as soon as they see a “RED X” on their dashboard. If under an ASOTV option agreement, the ASOTV partner may decide not to exercise their option to commercialize. Once the inventor sees the “RED X”, he or she is free to submit the idea to other searches, other companies, or pursue it on their own. It’s important to note that in the event we previously had another partner that expressed interest in the product, we do always check with them to see if they are still interested. The key thing to understand is that our goal is to work to commercialize as many of our inventors’ great ideas as possible. Our goal is their success!