Financial/business opportunity programs have also been popular and on an
uptrend the past several years.
Response TV
magazine editor David Nagle said that there have been about 450 products on the
air via infomercials since 1990, and the two biggest categories are usually
weight loss/dieting and health & fitness. The most common price point for
products sold is $29.95.
Many companies
have found that by introducing their products on TV through infomercials and
regular-length TV commercials, and then later opening up sales to retailers,
they can take away the all-important pricing decision from the retailers.
Upscale
productions, celebrity hosts, wider exposure in more markets, and more favorable
time slots have made infomercials capable of receiving strong ratings. The cost
of a 30-minute program is now competitive with that charged for a traditional
30-second ad. Such programming tends to attract a young, well-educated and high
income audience. Infomercials as a sales and advertising medium are inching
toward respectability, and they offer marketers a way to measure results.
However, the
infomercials market is becoming more saturated, and air time is getting more
expensive. Insiders estimate that it can cost $250-500,000 for a rollout of an
infomercial in test markets. In addition, product lifespan has shrunk from about
three years to one.
Buyers of
products via infomercials are overwhelmingly female - 69%. Similar to the mail
order business, rather than relying on the “front end” customer, most
infomercials try to cultivate satisfied first-time buyers and to develop add-on
sales and repeat business. Motivational speaker Tony Robbins does this. When
you buy his $29 audio/video package in a bookstore, the video acts as a sales
pitch to also buy his 30-day “Personal Power program”, for an additional $159.
About 80% of the
TV stations in the U.S.--network, cable, and independent, accept infomercials,
which are usually run on cable (The Learning Channel, Christian Broadcasting
Network, The Black Entertainment Channel) and independents.
Why People Buy
People are
looking for value and a comfort level with a product, which makes familiar name
brands a natural for infomercial advertising. Insiders say that we’re going to
see more higher-priced items being marketed this way. Advertisers broadcast new
infomercials in different cities at different times, offering different price
points before making the decision to roll them out nationally. Once relegated
to late night time slots, infomercials are now seen more frequently on weekend
mornings and afternoons, especially on local independent stations. A few even
run in prime time.
It’s clear that
as the Baby Boomers are aging, infomercial topics are following them—with shows
related to improving one’s appearance and fighting the aging process: weight
loss, skin care, make-up, hair replacement or hair growth, male enhancements
products, etc. Even high-end beds by Tempur-Pedic are being sold via
infomercials, catering to the slepp deprivation market.
The leading motivator as to why people choose
electronic retailers as their source for shopping is convenience.
Based on the research, consumers indicated that shopping directly from home made
it easier to make purchases and avoid the pressure from salespeople. Further
findings showed that among those surveyed, almost 60% of online and TV shoppers
will “definitely” purchase through this vehicle in the future, indicating their
positive experience enticed shoppers to return for further purchases.
