You don’t have to look too hard in Silicon Valley to find someone who will tell you how over television is.
TiVo forever disrupted commercials, dooming the industry, right? Yahoo has long pointed to the amount of time people spend on the Web versus watching TV, arguing that at some point the flow of ad dollars will rush towards the Web. Netflix is creating its own programming to rival cable networks. Go ahead, cancel our favorite shows. We have Netflix now. And Apple CEO Tim Cook has a familiar old refrain about how the experience of watching television just hasn’t changed enough in the last 50 years. The implication is that companies like Apple and Google can do better.
To hear the Valley tell it, there’s little the TV set is doing that the Web can’t do better.
One Kings Lane’s CEO Doug Mack has a slightly different point of view. He loves TV. I mean loves it. He gushes about its promotional potential every chance he gets. He says its unique power is still completely and totally undisputed. And while most ecommerce 2.0 leaders are playing around with real world, brick and mortar showrooms, Mack is all about broadcast.
We first chatted about this last December when Mack announced a big ol’ $50 million strategic investment from Scripps Networks — owners of HGTV and other cable channels.
Like a lot of ecommerce 2.0 entrepreneurs Mack considers his company as much about content as commerce, and he wants to dominate all three screens: The Web, mobile, and TV. He thinks One Kings Lane can dominate in home improvement on the Web and mobile. TV? No way. He needed a partner and found a natural one in HGTV.
At the time of the deal, Mack said:
Scripps knows content. They know more about content than we could build on our own. I can’t share all the stuff we’re going to do together. But from a vision standpoint, we are so aligned. Both of us serve the affluent female customer, age 24-55. Their viewers are they people who view home improvement as a hobby, and that’s who we want to get to.
As Mack and I discussed at the time the Scripps deal was announced, the Valley is rife with strategic partnerships that never amount to much. Mack responded that he had done strategic deals with each company he was previously at and was well aware of how they frequently go. This partnership would be different, he vowed. Less than a year in, it seems that wasn’t just idle boasting.
During the premiere of “HGTV Star” on Sunday night, OKL was officially unveiled as a part of HGTV’s top rated show. HGTV Star is like Project Runway or Top Chef for interior designers. Throughout the season, OKL will have a “pop-up store” full of accents and accessories that the designers can use to polish off the rooms they design for each weekly challenge. It’s kinda like the Lord & Taylor accessory wall on “Project Runway.” In addition, the prize for the opening challenge was having an element of the winner’s design made and sold on the site.
OKL’s co-founder Susan Feldman was on the show to announce the tie up. Regular watchers of reality TV know that contestants always absurdly gush about the brands included. I mean everyone on “Project Runway” is just dying to get their hands on those HP tablets, right? The season opener of HGTV Star was no exception.
A contestant on Feldman:
“I almost tackled the woman! I am a super fan of hers!”
And about the challenge prize:
“Bam! A dream come true!”
“Are you kidding me? I mean this is the opportunity of a lifetime.”
“Winning this challenge and having my item featured on One Kings Lane is exactly what I’d want to do with branding and my own line!”
It’s a nice way for One Kings Lane to steadily show off room accents available on the site. You can’t have this whole room, but how about these throw pillows? After all, TV was the original native advertising. And I had to chuckle at the use of the trendy term “pop up store.” At our CEO Supper Club on ecommerce, Mack was the only one to defy the “pop up” trend, saying he’d rather have a TV network at his disposal than a more trendy brick-and-mortar showroom. In a way, he’s got both.
The partnership will run through the length of the season.
While Feldman was getting “almost tackled” on national television, Mack’s team was trying to make sure the site was ready to fulfill what HGTV was promising. The second the winner was announced, they had to make sure the site had the winning items on sale. (They knew which were the winning items ahead of time but couldn’t put them on the site before the episode had aired, lest they tip off who the winner was.) Additionally, the team made sure the items showcased in OKL’s pop up boutique were featured on the site the following morning at 8 am for their featured event of the day. And they had to make sure there was enough of the items to go around. “There’s a very real time aspect to this,” Mack says. “It’s a lot of work to make sure you are completely ready the minute the segment is on the air. The team did a really good job.”
This time. Mack had learned how important this was the hard way. OKL’s first partnership with broadcast was with Bravo’s “Million Dollar Decorator.” They had $100,000 worth of product available that were featured on the show, and they sold out within 15 minutes. “While it was successful, we so missed the upside of the opportunity,” Mack says. “We didn’t have nearly enough product to sell.”
So how’d it go this time around? He cut out the numbers, but here’s what the traffic graph of the site looked like as soon as OKL was mentioned on the show. The dark blue line is this week; the pale blue line is last week’s traffic:
Backing up the whole thesis that people shop on mobile while they watch TV, mobile app installs more than doubled during the apisode. The site is running a concurrent HGTV event, and when I spoke with Mack yesterday, he was only twelve hours into it, and it had already sold 50 percent of the amount forecasted for the whole three days. One Kings Lane also saw a 379 percent increase in sign-ups stemming from the premiere of the show, versus the normal rate of sign-ups. “All early signs are good,” he said. “I never cease to be amazed at the power of broadcast. The second ‘One Kings Lane’ is said, we see a spike in traffic.”
The best part? Unlike with the Bravo show, OKL didn’t have to pay upfront to be included on HGTV like a traditional ad. Instead, the deal called for HGTV to “share in the upside” of any “productive traffic” One Kings Lane gets. I asked Mack what that meant, and it’s a bit like an Amazon affiliate relationship. HGTV essentially gets a cut of the sales from all the traffic that comes in during the timeframe of the episode, as well as the traffic that comes in from HGTV.com, whether those people buy the items mentioned on the site or buy way more beyond that.
So did Mack know this was in the can when he assured me the Scripps relationship would amount to more than just a press release and some cash? He hoped. But there were no specifics at the time of the investment only a verbal intention to do this sort of thing.
A network that gives you ads without up front costs and also invests? Not a bad deal for the last man in Silicon Valley who unabashedly values the tube.