The world of infomercials is insanely interesting

I had insomnia for a while as a kid, so I spent some time watching infomercials. I didn’t really think about it a lot, but once in a while in my 20s I’d check out a few on YouTube, just to laugh. Otherwise I have no real, deep connection to infomercials: periodically they helped me sleep (or encouraged me not to sleep) and once in a while drunk I’d check out a few Sham-Wow ads or something.

I stumbled across this article on the economics of infomercials today, though. It makes a lot of interesting (and, frankly, stunning) claims, including: (a) the U.S. market for infomercial products might exceed $250 billion by 2015; (b) The PedEgg has over $450 million in sales since it launched; (c) you can produce an infomercial for as low as $25,000, whereas a network TV 30-second spot might cost $350,000 (that can translate to about $13.89 per second of cost for an infomercial, whereas a network spot can cost you $11,000 per second) and (d) big companies like Johnson and Johnson are embracing the infomercial idea as well. (There’s a ton more in the original article, which is linked first, so check it out.)

Infomercials can be seen as skeevy — more on that in a second — but from an advertising standpoint, there’s actually a lot we can learn from them. (Same goes for marketing.) Infomercials do things like using testimonials, outlining the benefits of the product, throwing in bonus offers, offering to reduce risk, giving ‘steal deals,’ etc — these are things that people talk about in MBA classes on a daily basis somewhere in the country. The New York Times has even given the infomercial the long-form treatment. So has Dateline:

It all begs the question: are infomercials ethical, or scams, or even remotely good ideas? Let’s start with the third part first. They actually are good ideas, for certain products. You have a self-selected audience, for one. If you’re discussing baldness, and the person watching isn’t bald, they’ll turn it off. Now, as for the ethics … that’s been debated many a time, including here and here. Are they scams? Well, not all are — some are actually legitimate products with a good revenue profile after a year or more on the market. Then there’s stories like Kevin Trudeau (here’s the latest on him) and the notion that it might be a seedy sub-world equivalent to porn — think about what happened to the Sham-Wow guy and Billy Mays’ drug use. I generally assume people associate things that occur after-hours with potential shadiness, and that’s where infomercials reside. Plus, they’re extraordinarily cheesy (for the most part), and when cheesiness combines with sordid, people assume there’s a shady-ass backstory.

If you have a questionable product, there are ways to get in with the infomercial production world; finding actors isn’t that hard either. Here’s the website of one company that will help you make an infomercial, and here’s another. There’s a good deal of criticism and legal issue surrounding the field, as well.

It’s important to remember here that, while this is a multi-billion dollar industry, humans can be reasonably expected to have some (perhaps small) degree of common sense here and there. If you see an infomercial, especially one over 15 minutes (which has to be disclosed as a ‘paid advertisement’), you should be able to figure out how big a scam it might potentially be. At the very least, you can use Google to find out more about the product. (As I’m typing this, I realize that no one has ever gone broke in America betting on the stupidity of the people.) If you need a handy guide, check out this video:

Also, if you see anything from this list being advertised, you might want to avoid:

By the way, ‘As Seen on TV’ — you know you’ve seen the logo and heard the phrase — is kind of a loose organization / nameplate for these type of direct-call products. They are, in turn, ‘powered’ by Delivery Agent, a company that tries to ‘turn viewers into customers.’ Here’s some of their recent press, including participating in the ‘Future of Television’ conference. They also have a crowdfunding site now.

Infomercials are clearly a part of that future — as noted near the top, revenues from their products are rising, and fairly sharply. I don’t know if that’s necessarily a good thing, but the core tenets of what they do are very closely linked to what business school students are taught to ideally focus on, they’re funny as all hell most of the time, and if the goal of TV ultimately is to make people associated with it some kind of legit money, they’re accomplishing their goals in that way too. Plus, it’s one of the most interesting sub-industries you can really find out there.

Ted Bauer