INFOMERCIALS

An infomercial is a 30- or 60-minute broadcast commercial that delivers extensive sales messages in a natural format. It differs from the typical television commercial in the amount of time, amount of information, and amount of "reality." It is, in short, an elaborately orchestrated sales pitch. The modem-day infomercial originated in 1984 when the U.S. Federal Communications Commission (FCC) revoked its ban on "program-length commercials." Deregulation freed television stations and cable networks to sell entire half-hour blocks of air time for advertising. What they sold initially were "remnants," the unprofitable, late-night slots that had been the domain of 1950s horror flicks and test patterns. By the late 1990s, according to one estimate, infomercials generated some $1.7 billion in direct sales, and possibly more indirectly because of increased sales through retail channels.

The evolution of infomercials included some dramatic success stories. In 1987, for example, American Telecast Corp. of Pasli, Pennsylvania, produced "Where There's a Will There's an A," hosted by John Ritter. Since then, more than a million audio and videocassette of the study program have been sold for $60 to $90 apiece. Similarly, 70-year-old fruit-juice fanatic Jay Kordich was nothing more than an oddity at local trade shows until Trilium Health Products of Seattle put him in an infomercial as its "Juiceman" and launched a nationwide juicing craze. Finally, Mike Levy went from obscurity to self-proclaimed "most-watched man on television" with his "Amazing Discoveries" infomercials. Among his more amazing feats: selling more than $40 million each year of tooth whitener and car wax.

In the early 1990s, infomercials earned the interest and respect of a more upscale audience. Companies such as Volvo, IBM, AT&T, General Motors, and Time Warner have all made infomercials. Further, traditional ad agencies such as Foote, Foote, Cone and Belding, Ketchum Communications, and Hal Riney have either established their own infomercial departments or have formed partnerships with infomercial production houses.

Three interrelated reasons have been proposed for this growth in infomercials. The first is cost; infomercials became attractive because of the relatively cheap air time, averaging $50,000 to $500,000 per week for a half-hour slot, and the relatively small amount they cost to produce, usually somewhere between $110,000 and $650,000 for 30 minutes. Second, the tremendous need for alternative programming as the nation's cable system expands to a capacity of as many as 150 channels apiece by the mid-1990s has spurred advertisers to capitalize on these openings with infomercials. A third reason is increased strategic credibility. As more prestigious companies have become involved with infomercials, an improvement in product quality and implementation has resulted. Celebrity endorsements also augment credibility. Vanna White has cashed in on her famous smile by endorsing Perfect Smile teeth whitener. She helped generate over $20 million in sales for the product in just a few months. A mid-range celebrity can make $25,000 on an infomercial, plus up to 5 percent of gross sales. The recognized and proven commercial pull of celebrities has transferred well to the infomercial industry. Consequently, infomercials are increasingly viewed as a legitimate part of a company's communication strategy.

By the late 1990s, the infomercial industry had evolved into a $1.7 billion market. The most successful and prevalent products pitched by infomercials were related to diet, fitness, and appearance concerns. Indeed, half of the top ten grossing infomercials in 1998 advertised products in these categories. Television sales generated $80 million in sales for Bioslim, which sat atop the list for its infomercial assembled by Thane Marketing. Salton Maxim's infomercial for George Foreman's Lean Mean Grilling Machine cashed in on the heavyweight's star appeal to rank second place. One company, Quantum, placed three shows in the top ten, while TruVantage maintained two slots. National Media Corporation remained the largest publicly traded infomercial company.

A study by InfoCision Marketing Corp. found that the gender gap among infomercial customers has widened even as the medium has matured. Whereas 69 percent of infomercial buyers in 1995 were women, by 1997 that figure had leaped to 85 percent. Higher-income consumers also increasingly figure into infomercial demographics. NIMA International (formerly National Infomercial Marketing Association) found that 13 million U.S. adults purchased at least one item from infomercial offers in 1997. Moreover, the average U.S. television viewer spent about 14 minutes per week watching infomercials. Thus, a quite viable market exists; the challenge to advertisers is to implement strategies whereby more males are drawn to infomercials as a standard shopping medium, and to tap the vast lower-income brackets.

The dramatic growth of Internet-based shopping poses a further challenge to the infomercial industry. Infomercial producers may need to find ways to transfer a recognizable motif to the World Wide Web or in some other fashion address this booming medium. Analysts also expect that "cause marketing," in which infomercials are produced with the intention of raising funds for specific charities, rather than for profit, will continue its steady growth to become a larger force in the infomercial arena.