Infomercials Take Soft-Sell Approach

Sep 29, 2003  •  Post A Comment

You are watching the Discovery Channel one night and an episode of “Monster Garage” ends. You turn off the TV for the evening and fall asleep dreaming of hot cars, chrome and rumbling engines.
The next morning, you turn on the tube and there is another show about motor vehicles on the same channel. However, it isn’t an episode of “Monster Garage.” It’s a 30-minute commercial that General Motors Corp. purchased on the national cable network to promote its line of GMC trucks. In other words, it is an infomercial, but with a difference.
Until now infomercials have mostly been the province of companies selling merchandise ranging from ab rollers to rotisserie ovens. Such companies run long-form commercials with a hard-sell pitch for their product, all tied to a phone number, an address or a Web site where the product can be purchased immediately. It’s like a shopping channel, but instead of running around the clock, stations sell blocks of time, typically in nonprime-time hours. It benefits the stations because they get more revenue than they could by simply selling ads, and advertisers are happy to provide turnkey programming ready to go on the air.
In the latest wave of infomercials, advertisers also purchase time, usually in half-hour blocks, from willing stations. But they don’t use the same kind of hard-sell approach. As with the GM ads, which have been airing since July, it is a softer sell designed to enhance the image of the product and reinforce the brand identity. A GM spokesman declined to comment on any aspect of the program.
However, earlier this month at the 13th Annual Electronic Retailing Association Convention in Las Vegas, the softer-sell approach and the entry of much larger corporations into what is known as direct-response television (DRTV) were the talk of the show. “Fortune 1,000 companies are getting into long form. It’s a golden opportunity to sell their story in 30 uninterrupted minutes,” said Bill McGowan, executive VP for advertising sales at Discovery Networks.
Offbeat and Brand Items
And it isn’t just GM. “Traditional advertisers such as BMW, Tropicana, Bissell, RadioShack and Dell are getting into direct response,” said Barbara Tulipane, president and CEO of the Electronic Retailing Association.
DRTV typically finds a home on independently owned stations and cable networks hungry for revenue and only occasionally appears on major network affiliates in local markets. However, it has grown into a sizable business. The Direct Marketing Association estimated that the industry spent about $23 billion last year buying media time for infomercials. Until relatively recently, most of that was for offbeat products from sellers who did not also run a bricks-and-mortar retail network. That began to change in recent years, said Mr. McGowan, who recalled that among the first to run brand-oriented long-form infomercials with “no call for action” were Apple Computers and Philips Electronics.
Efren Padilla of Telemundo’s KWHY-TV in Los Angeles said the station already has a variation. The latest wrinkle is for “local car dealers to buy many of the long-form spots on local stations,” Mr. Padilla said. These long-form ads don’t sell the product instantly, but rather are designed to drive buyers into the dealer’s local showroom.
While the entry of larger companies is good news for local stations and national cable networks with time to sell and has reinvigorated a business that has come under fire from consumers and viewers, the latest trend is bad news for the smaller entrepreneurs who started the industry.
When larger corporations buy infomercials, “They buy up all the inventory and drive up the rates,” said Bill McAlister, president of Direct Response Inc.
Discovery’s Mr. McGowan concurs. “Fortune 1,000 corporations will drive pricing up due to … supply and demand. It’s the evolution of the industry.”
Not everyone thinks the big companies are committed to using infomercials. Nancy Marcum, whose Marcum Media of Phoenix acts as agent for various sellers, offers some dissent: “Infomercials lend themselves to the entrepreneurs selling products like Proactiv and The Firm. Brick-and-mortar companies are moving into long form, but they launch and then they pull back.”
Nevertheless, Ms. Marcum lamented, “I cannot buy the time I want because it’s too expensive. Stations are trying to make money back from the losses from 9/11, a bad economy and trying to get back to the e-commerce boom.”
“Rates go up every single year, despite audience fragmentation,” said Tim O’Leary, president of Respond2, which is based in Portland, Ore.
Selling Old TV Shows
In the end, the time is hard to buy and rates go up because well-thought-out infomercials with the right products work. One success story has been the use of TV to sell old TV shows. That example dates to 1997, when Buena Vista Home Entertainment sold a Johnny Carson four-pack video.
Mr. O’Leary said Buena Vista had an idea to sell a new-and-improved version on video and DVD via direct response. Little did he know that the “Johnny Carson Ultimate Collection” would sell millions of units. In the process, for the fourth quarters of 2001, 2002 and the upcoming 2003, Mr. O’Leary has spent and will spend $300,000 to $500,000 a week on media, divided equally between local stations and national cable services.