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March 2, 2021

Investigating FRAUD in the DRTV industry!

by Brian Postma


In the past month or so DirectResponse.TV has received notifications from more than one network regarding reports of alleged fraud occurring with numbers associated with their PI campaigns.


A DRTV agency also came to us and advised us of this issue and asked for any assistance we could provide in helping them get to the bottom of it.  


After reviewing all the information at disposal, looking at it from every direction and dissecting it like madmen (and mad woman) for weeks we've come to one stark conclusion;  there is no fraud issue in direct response television.


Let us repeat that: there is no fraud issue in direct response television.


Let us clarify that; In some cases there does seem to be fraud occurring.  What we are saying is their is no fraud issue in direct response television, the reason for which we will attempt to explain before the end of this article. 


One nagging question bothered us the entire time we investigated this issue.  Would successful television stations, even members of DirectResponse.TV be willing to poison the well of good leads with a handful or even a few dozen bad leads to pad their revenue? If so, would they do it in what seems an obvious way and in which no real effort is made to hide the deception?  The conclusion we came to is a resounding and in retrospect, almost obvious ''no.''


Next, we thought about the agencies;  would they mix in bad calls in order to justify not paying clients? In many cases they had paid the majority of leads so that also made no sense and could not be the case. They could just as easily have canceled campaigns without flashing the fraud card.  


What about competitors of DRTV agencies? It seemed possible but the attacked campaigns were to varied.  That was too far of a stretch.  Could it be program producers, distributors, distribution platforms? Maybe but the reports of impacted leads were so varied it seemed a bit far-fetched.


Two different television stations told us they suspected it was competition on streaming platforms from other advertising agencies that focus on these platforms with what is know as CPM advertising. For those unfamiliar, CPM advertising is the bread and butter of streaming TV services that are not subscriber supported. They pay not for leads and sales generated or airtime minutes but for eyeballs. (Streaming technology allows advertisers in these scenarios to know how many times their ads were actually watched..assuming the person watching wasn't out getting a snack or browsing their phone.)

And they don't pay nearly as well as successful PI campaigns.

As more and more streaming networks turn to direct response TV  agencies in this space are seeing a drop in revenue and likely can see a much larger drop on the horizon.  


They would have a lot to loose if direct response wins out in the competition for streaming network advertising space. While it remains a hunch, we believe that both logic as well as various information we are uncovering supports this theory.


One thing is for sure. Everyone else; advertisers, agencies and networks want it to stop. Ironically, many advertisers and agencies  though are falling right into the hands of these miscreants.  Campaigns are cancelled, they no longer are seen on streaming network broadcasts and these entities see their dastardly results are paying off.  The networks are forced back into the CPM space. At the same time, DRTV takes another step back from modernity. 


The biggest victim may well be the future of DRTV itself as streaming television becomes the number one source for television in America (most Millennials have never subscribed to cable and never will).  The possibility of fraudulent calls will continue to remain a part of the possible reality on the landscape however for some time to come.  DRTV agencies must make allowance for this, work with the stations and put in plce safeguards to detect this activity.  Those who wish DRTV ill must see that all parties are resolute and united and unphased.


The DRTV agencies and advertisers that do this will come out the winners in our industry in the long term.  


DRTV agencies have a lot to loose if they allow the existence of bad calls to stop them in their tracks from venturing into the streaming space.  Principally, a lot of good leads!  Secondarily, relationships that can be lost because of a misunderstanding. Any network can be the target of targeted spam calls and odds are many will be. However, you don't throw out the baby with the bathwater.  Similarly, you don't throw out good networks and good leads because of bad ones.  


The onus is on the agencies to weed out these calls of the garden of leads they receive from stations by careful call monitoring. It's a type of security measure that should have always been in place.  20 some years ago you could get on a plane with a hunting rifle. 9/11 changed all of that and we wondered ''how was this ever allowed?''  The newfound awareness that we have now should change things in the direct response industry in a way that prevents bad calls from getting past the gate and all good calls to get to their final destination (the buyer).  This will ensure a safe journey for all. Like at airports, undesirable entrants will be stopped at the gate, anticipated troublemakers handled seamlessly by a system that allows operations to continue on at full speed.


If DRTV agencies do not find a way to work with streaming television stations and properly handle spam calling it will be to their own detriment.  They will be left out in the cold in the march of time.  As streaming television becomes the norm of the future, streaming stations will have excluded direct response from their revenue model in favor or CPM or other new models that necessity will innovate. DRTV will find themselves on platforms with increasingly dwindling viewership, another decline from the industry's heyday of the 80's and 90's. The way forward is clear;  a closer collaboration between agencies and stations.  


We don't have a fraud issue in direct response television just like we said at the start of this article. We have a targeted spam call issue that can be dealt with. TV stations will surely understand that new monitoring will mean adjusted counts and agencies will have put in place measures to more quickly weed out these expected minority of calls.  With time, the lack of success of the efforts of those behind this issue will cause is to cease. In the end, the result will be a  flourishing and ever growing, forward looking DRTV industry ready for the challenges and promises of the 21st century. 

Brian Postma is a freelancer journalist who has contributed to DirectResponse.TV since 2017.  He loves looking at things from all angles and values independent, unbiased journalism above all else. Walter Cronkite is his personal role model. 

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