Infomercials 101

Infomercials 101

Written By Elisabeth Pritchett, CEO and Founder of IntelliVision, Inc.

What is DRTV?DRTV stands for Direct Response Television, which is synonymous for what most people call “infomercials”. It’s any television advertising that asks the viewer to take an immediate action, whether that is to order a product, visit a website, or call a toll free number for more information. It’s advertising that is eliciting a specific and direct response from the viewer and that’s what we do here at IntelliVision. We get the viewer, the consumer, and your potential customers to take action. We generate a direct response from the viewer as a result of seeing your ad.

Brief History of TimeDo you remember when TV ended each night? At around 1 am or so they would play the national anthem, show the American flag waving and then TV programming was OVER until the morning. Now if you’re too young to have any idea what I am talking about than this sounds like lunacy. But never the less it’s true.

In the early 80’s the government deregulated broadcast television, and suddenly there was all this overnight time and no programming to put on it. That’s when a few, very wise, direct marketers snatched up that overnight time to run advertisements for their products. That’s when the infomercial was born.

Now things have obviously evolved since then. The infomercial industry has grown and changed tremendously since that time and is no longer comprised of just “late night” programing. Direct Response television has become one of the most effective and efficient ways to advertise to the masses, launch a product, and create a brand.

Big BusinessIn fact, very few people outside of this close knit industry really have any idea just how big this business has become. I want to put it into perspective for you…

Did you know the infomercial industry is bigger than the feature film business? Yup. A lot bigger. In 2010 feature films grossed approximately $10 Billion dollars in sales worldwide… ($10,192,513,930.00) That’s big bucks right?

Well I am going to let you in on a rarely disclosed and not-so-often-talked-about industry secret. According to our own industry estimates for that same year, 2010, gross infomercial product sales (including retail) exceeded well over $100 Billion dollars worldwide. This is considered a conservative estimate since many privately held infomercial companies like to keep their total sales figures close to the vest.

The bottom line is, no matter how you slice it, the infomercial industry is BIG business.

Why Infomercials WorkOne of the many reasons infomercials are such an effective marketing tool is they are what we like to call self-liquidating advertising. Direct response television is by nature, designed to generate sales directly from the broadcast of the media itself. You’ve heard it before… “Pick up the phone and order right NOW!”

Which means, you’re generating revenue as a direct result of your television advertising. So even if the money you are spending on media for your infomercial is at a “breakeven”, which means it’s not costing you money to advertise your product, you have a winner! You’re advertising your products to millions and millions of consumers, generating retail demand, and building a nationally recognized brand, at a fraction of the capital required for most traditional product launches.

Infomercial marketing can level the playing field and allow the small potato to compete with the big boys.

Billy and Goliath.One of my favorite case studies is that of OxyClean… This once unknown brand started out on Home Shopping Network with an even less famous Billy Mays. However, those short form DRTV spots were so effective, OxyClean ended up taking such as large percentage of the total market share of ALL detergent sales away from Goliath companies like Unilever and Proctor & Gamble it quickly became a become a billion dollar brand. And the best part is those same BIG companies, so desperate to win back business, ended up copying the “little guy” and coming out with their own “OXY” products in order to compete. So needless to say the infomercial, when used correctly, can be a powerful and very effective marketing tool.

Do not attempt any of these stunts on your own.

Ok. So you have decided you want to make an infomercial. Now what?There are literally hundreds and hundreds of important decisions that go into a successful infomercial campaign and having the right company, with a critical understanding of this business is paramount to your potential success. A good team will guide you through each one of these important steps and help you understand all of your options, so you can make conscientious and informed decisions.

So my advice to any product owner or business considering an infomercial for their product is to hire experienced and seasoned infomercial marketers. Because the right marketing strategy, infomercial production, product positioning, and backend sales system will make all of the difference between success and failure.

But a world of caution, buyers beware. Just like any other industry there are reputable companies that say what they mean and mean what they say, and then there are also opportunists looking to take advantage of the inexperienced. So do your homework and good luck on your exciting new venture!