N E W Y O R K, Nov. 20, 2002 -- How much would you pay for the thousands of products sold through infomercials?
Before you answer, consider that nearly two-thirds of all Americans report seeing infomercials and that there are more than 1,000 products a year sold that way.
Consider the numbers: In an average month, 300,000 infomercial spots appear on 36 national cable stations and 1,800 broadcast stations, according to Elissa Myers, president of the Electronic Retailing Association (ERA), the industry trade group. To watch them all would take you roughly 1,027 years — and it might seem longer. Direct response television advertisers spend more than $800 million annually on media, according to Response, a trade publication based in Santa Ana, Calif.
Now how much would you pay?
If you're the American consumer, the answer is $14 billion; that's the annual amount of products marketed via infomercials, Myers estimates. This is more than Americans spend on movie tickets.
Shopping as Entertainment
The infomercial has long been the object of ridicule. That comes with the territory. But attention must be paid, for the signs are everywhere that long-form advertising, as it is known, is not just liked, it is well-liked.
Nearly 63 percent of all Americans aged 16 and over "have experienced" at least one form of infomercial, the ERA says. More than one in four Americans have responded to the ads by dialing up and buying. Characters in movies are forever shown watching the spots and they have long been fodder for late-night comedians, perennially satirizing the hucksters pitching vegomatics and Ginsu knives.
But the king of late-night comedians, at least, has joined forces with the subject of his satire. Over the last three years, Carson Productions has partnered with Respond2, an infomercial advertising agency based in Portland, Ore. They have sold 2.5 million videos and DVDs that mine the Tonight Show archives, which is comparable to the DVD/video sales for a hit Hollywood movie.
Respond2 has actually sold 35,000 copies of the infomercial itself, says Tim O'Leary, the company's CEO, making the video the first product ever to be an infomercial for itself.
But it is not the first infomercial to entertain. The success of home shopping channels like QVC and HSN, a division of USA Interactive, show that there is at least a core of viewers who will sit and watch advertising as programming.
This phenomenon is not new. The infomercial industry has its roots at county fairs and on the Atlantic City boardwalk (where, coincidentally, Ed McMahon, Carson's sidekick, got his start). Only a good showman could get the people to stop while on their way to other distractions so he could hawk his wares.
Separating Hype From Reality
In recent years, infomercials have moved into the mainstream. O'Leary says he has done long-form ads for major companies like Apple Computer, Gateway, Whirlpool, Sony, Carnival and even hospital chains.
He is not alone in serving corporate America. The Time-Life unit of AOL Time Warner has long run infomercials, just of a quieter type than some others. Major companies are converts, but they want to be assured they won't be embarrassed. "We don't do 'yell and sell,'" O'Leary says.
Even broadcast giant NBC, a unit of General Electric, got into the act with ShopNBC, a home shopping channel 60 percent owned and operated by ValueVision Media. Home shopping in the U.S. is itself a $6 billion industry — and growing.
Infomercials have been around in one form or another since the beginning of television. But the modern industry got its start in 1984 when the Reagan Administration deregulated the airwaves and renounced rules limiting the number of commercial minutes that could be broadcast in a given hour. With the change in policy, coupled by the growth of cable television, infomercials took off.
Since the beginning, certain products have tended to proliferate in infomercials, and they still do. Response reports that cosmetics and personal care is the leading product category on infomercials, followed by housewares and appliances — the famous vegetable slicers. Health and fitness products are the next most popular.
Industry insiders say these products are sold on TV because they require a lot of demonstration. But the prevalence of diet products and hair loss remedies gives rise to the impression that infomercials sell a lot of shoddy wares.
Insiders don't deny that there are con artists in their midst. "Are there bad people in our industry? Absolutely. I hate them!" says Earl Greenburg, an infomercial impresario based in Santa Monica, Calif. But they say they are working hard to weed out the scofflaws, both from within the industry and with the U.S. Federal Trade Commission, which can only help its business overall.
They Love Them in Britain
Infomercial marketers want to rid themselves of their image as fly-by-night. They note also that most products advertised through direct response media are actually sold in traditional retail channels. The hoary slogan 'Not sold in stores' has become the exception to the rule.
At the same time, they say infomercials are still a haven for untested entrepreneurs who can't afford slotting fees charged by retailers or who simply can't get in the door.
Infomercialistas are nothing if not relentless — and resistance to their pitches may be futile, especially as digital television takes hold. With more channels to surf and an increasingly Balkanized audience, there will be more places to sell.
In Europe, in fact, the future has arrived already. In contrast to America, which has to make due with just four national home shopping channels, the TV Guide in England lists 35.
For more, go to Forbes.com..