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BUYING ON C.P.O. and *If your media buys are to be based on any single common denominator that *monitors performance, it should be Cost Per Order (CPO). and *In direct response television, the bottom line is your CPO - how much it *costs you to generate one sale or one inquiry. and *THE LOWER YOUR CPO, THE HIGHER YOUR PROFITS. Remember, with DRTV, media *buying has nothing to do with programming or demographics. It is strictly *a numbers game. The fewer dollars you spend to reach your viewer base, the *better your CPO. and *CPO SHOULD GENERALLY BE UNDER 50% OF SELLING PRICE. To determine your CPO, *simply divide your airtime cost by the number of orders you generated from *that singel airing of your infomercial. This amount should be less that 50% *of your selling price. and and *
PERFORMANCE RATIO and *Performance ratio is a percentage derived from dividing your CPO by your *selling price, or by dividing your total sales revenue by your total media *cost. and *Although the maximum CPO should be 50% of your selling price, few advertisers *consider 50% to be acceptable. Ideally, your CPO should be 1/5 your selling *price, which means you should receive $5 for every dollar you invest in media. and *For example, if $1,000 worth of airtime produces 50 sales, your CPO is $20, *which means it costs you $20 in media time to sell one unit of your product. and
*> If your selling price is $40, your CPO is 50% of your selling price

MONITORING & EVALUATION and *The success or failure of an infomercial can be determined by one or two *airings. If the first airing produces marginal results, you may want to *give it a second shopt for comparison. If the second airing is equally *disappointing, go back to the drawing board. and *Immediately evaluate the performance of each airing the morning after. *Although orders may continue to straggle in two or three days after an *infomercial is aired, each airing's performance can be largely determined *by evaluating it within 12 hours. and *EACH AIRING MUST BE PROFITABLE NO IFS, ANDS OR BUTS. YOUR ONLY OTHER *CONCERN SHOULD BE TO COMPARE THE CPO AND RATION OF ONE MEDIA BUY TO THE NEXT. and *Infomercials are not like regular programs, which can build viewership with *an increase in frequency. If your infomercial does not deliver a profitable *return after one or two airings, it probably never will. and *Furthermore, if after one or two airings, your infomercial proves profitable, *your next task isto develop a media plan that will increase those profits. *By selecting stations, time slots, and air dates that will produce the *lowest CPOs, you can dramatically increase your profit ratio. and and and

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