that shamwow guy has me thinking about infomercials.

[vash]

what is the deal? why do the creators of a particular product decide to go with an infomercial rather than with a more mainstream approach of just getting the product onto store shelves? i dont know squat about marketing. did TIDE run infomercials back in the day, before they became a household name?

infomercials have that "snake oil" feel to them, for me. i do see some past infomercial products on the shelves now. orange glo, furniture polish is an example. just wondering..

cliff.
bored at work, waiting for a boring meeting to start.

[the]

They do it because for many products, it works. It isn't easy to get a product on a store's shelves, particularly a new product with no sales history. And once it is there, most products don't really sell themselves. need advertising.

many times the maker of the product, and the producer of the video are in partnership. the producer of the video also often serves as the media buyer, and there is huge money in that.

infomercials are a very speculative business. they can make a ton of money if they "hit" or they can lose a ton of money. The air time is very expensive.

The way it generally works is someone invents or otherwise makes a product. they have nowhere to sell it, but they are willing to invest in production and advertising. they approach production companies to try to work a deal to produce and air the infomercial. if the production company likes the product and thinks it will work, they'll work out a deal, get the infomercial produced, buy the media, and get it aired.

[Pazuzu]

Originally Posted by vash

what is the deal? why do the creators of a particular product decide to go with an infomercial rather than with a more mainstream approach of just getting the product onto store shelves? i dont know squat about marketing. did TIDE run infomercials back in the day, before they became a household name?

infomercials have that "snake oil" feel to them, for me. i do see some past infomercial products on the shelves now. orange glo, furniture polish is an example. just wondering..

cliff.
bored at work, waiting for a boring meeting to start.

Every person in America knows Shamwow, knows Ginsu, knows OxyClean...but how many know their "mainstream" competitors?

Heck, OxyClean not only is now mainstream, it rode the front of the new "oxygen and/or citric cleaning agents" wave that has taken over.

[berettafan]

Stomachmonkey knows a lot about that stuff.

VERY cool.

[onewhippedpuppy]

Great for getting the name out, but does anyone REALLY buy stuff from an infomercial?

[vash]

Originally Posted by onewhippedpuppy

Great for getting the name out, but does anyone REALLY buy stuff from an infomercial?

this is what i am thinking...there is a bunch of snake oil out there lanquishing in warehouses...only a few products appear to go mainstream.

[milt]

Originally Posted by onewhippedpuppy

Great for getting the name out, but does anyone REALLY buy stuff from an infomercial?

You bet they do. Vince is a multi millionaire. Billy Mays has been around a long, long time. He must have a ton of money. He has sold 50 Million worth of Orange Glo alone.

[enzo1]

You mean this guy..Vince Shlomi

[techweenie]

infomercials are very tightly monitored. If they don't produce sales they don't run.

So you can trust that Billy Mays (the bearded shouting guy) is moving millions in merchandise. Just because you don't buy doesn't mean millions of others don't either. Vince, the Shamwow guy may not be as successful, now, as the pictures of the hooker he beat up get around.

[craigster59]

I know Ron Popiel made a ton of money. Pocket Fisherman, Pop-o-Matic, Showtime Grill, Spray On Hair, Etc.

[porsche4life]

My uncle worked with a guy that would stay up all night drinking beer and watching infomercials. I get the feeling that guys like him are who keeps these guys alive. The dude had a Flowbee for christs sake.

[Monza_dh]

Originally Posted by milt

You bet they do. Vince is a multi millionaire. Billy Mays has been around a long, long time. He must have a ton of money. He has sold 50 Million worth of Orange Glo alone.

The pitchmen are making $$$$

This Country is full of dumba$$ people that buy all the crap sittting on thier coach drunk.

Each have their own wiki:

http://en.wikipedia.org/wiki/Billy_Mays

Mays currently resides in Florida in a US$1.8 million home built in 2005.[

http://en.wikipedia.org/wiki/Ron_Popeil

In August 2005, he sold his company, Ronco, to Fi-Tek VII, a Denver holding company, for $55 million USD. He said he plans to continue serving as the spokesman and inventor, but wants to spend more time with his family. As of 2006, he lives in Beverly Hills, California

http://en.wikipedia.org/wiki/Vince_Offer
"you'll love my nuts".....

[stomachmonkey]

First thing to know about infomercials.

If you see them, they are making money. The more often you see them the more money they are making. The ones that don't work, you most likely will never see. And there are plenty of them. Way more failures than successes.

Why an infomercial?

One reason, as previously stated, it is a path to retail.

To put a product on a retail shelf is not simple. You need to convince the chains category buyer that it will make him money. He is given an allocation of money and certain "open to buy" windows. If he takes a product that does not sell it's his azz on the line. So he wants to know why will people buy it, what's the USP, what kinds of dollars are you going to commit to generating awareness, what's your media plan, are you doing TV, let me see the schedule, etc....

Traditional advertising is speculative. If you have a current product selling x number of units a month then do a traditional print/radio/TV buy and sales go up you know something worked but not necessarily what worked. Part or most of your advertising dollars could have been a waste.

To a TV network "time" is a commodity with an expiration date. If you do not sell 100% of your available commercial time in a 24 hour period it is gone. You have not monetized it.

This is what makes DRTV work. You buy time 2-3 days in advance when stations are starting to sweat it. you pay .30 on the dollar for it so you can buy 3x's as much. $10k gets you 2 weeks of test time. You don't care where it runs, that does not matter in the beginning.

You don't care because each spot has a phone number, each station gets a different phone number. I run a spot today, tomorrow I get a report that tells me what stations it aired on, how many times, during what time periods and how many orders were generated. Some stations will do well, some will not, some will only do well during a particular time slot. So you discard the total losers, focus your money on the performers and within a week or two you have found your target audience. Now you start pouring money into it.

Here's the fun part, you are making money the whole time (with the right product).

There are 4 criteria for what makes a good infomercial product which we won't get into now.

When you run test spots you are looking to hit an MER (media efficiency ratio) of 1.5. For every $1 you spend in media you are getting back $1.50 in sales. That's the magic number that tells you that you have a viable campaign. So during your test you are refining the stations to bring the MER up as high as possible, you get into the 2.0 range and you are printing money.

You can turn a $10 k per week spend into a $1M per week spend in 12 weeks. Here's how. You start with $10k, get 1.8 MER so you come away with $18k. Take 85% of it and roll it into next week, x's 1.8 you come away with $27.5 k, repeat that for 12 weeks and you are up to $1,075,488.42 per week in media spend and have made $833,177.86 in gross profit and are generating revenue of $290,381.87 per week.

One of the things that makes the barrier to entry low is the product itself. If you see an add that says "Only $19.99, try now just pay shipping and handling of $9.99" It's almost a guarantee that $9.99 covers not only S/H but the COGs as well.

Here's the other fun part, "Allow 4-6 weeks for delivery". You build two weeks of product to keep on hand for the customer willing to pay a higher expedited shipping charge. The rest you build AFTER orders are placed and the money has already hit your bank account. You are paying for the manufacturing from proceeds already received. The customer is paying you for a product that has not been built yet.
Those "orders in hand" are collateral. You can now go borrow a nice chunk of cash and ramp your media spend even faster.

Then there is the upsell, you call for your $19.99 product but after my phone rep gets done with you they have sold you 2-3 additional items not even mentioned in the spot and your order total was $50-80.

If I can get you on a continuity, (ie a vitamin/supplement subscription) recurring monthly product shipment with pre approved monthly hit on your card I'm doing a happy dance.

If you get as few as 12% of the people buying the TV offer to opt in for $9 monthly continuity after 3 years those customers have made almost as much money as the main offer even with the attrition rate factored in.

DRTV is BIG business. It may look like a joke but it's serious stuff.

[stomachmonkey]

Originally Posted by onewhippedpuppy

Great for getting the name out, but does anyone REALLY buy stuff from an infomercial?

You'd be shocked at how many do.

[berettafan]

told you guys he knows this ****!

[onewhippedpuppy]

Originally Posted by stomachmonkey

You'd be shocked at how many do.

I guess so. I just can't picture someone calling at 3 am to order a combination potato slicer and margarita machine.

[milt]

Originally Posted by stomachmonkey

(the analysis)

I'm sorry you had to post this again. I read it the first time you posted and was fascinated.

[asphaltgambler]

I guess I'm Mr. Dumass because I just ordered that freakin upside-down tomato tree stand thingy for my dad. I had seen it, like, a 'hunert' times and finally pulled the trigger (or just submitted to the info-mercial brain washing) I thought dad would really enjoy it. Gardening used to be his one and only passion, especially growing tomatoes

He can't get around much anymore and that thing would even fit in the sunroom and he would not have to step outside the back door.

Here's my sad tale......................................first the payment is "only" $19.95 but wait...........it's actually TWO payments of $19.95 PLUS S/H.............................when I call to order the freaking S/H is also another $19.95 !!! OK........OK...................

But that only gets you the basic set-up........then you want/need the 'special' tomato seeds, the special 'little green house' and soil to get the whole deal started........another $10 or $15 and you can't forget the special fertilizer 'wafers' that precisely fit into the little green house seedling cups.....another $9............................. so you can do the math on the charge to my Visa

So,...........I think I know, Iknow I just got hosed but the whole deal will arive, ready to go and my dad will get a kick out of it.

That is until three days later I walk into a local Wahlgreens to pick up a 'script and what do I see there in the middle of the isle...................................yep, that's right.........................a freakin upside down 'mater tree................................for $9.99

[teenerted1]

"as seen on TV" could also mean "as seen at wally world"

[DasBoot]