The Life and Times of The Long-Form - 09/03/2014 Thirty years ago, the FCC deregulated television advertising, shepherding in conditions ripe for program-length direct response advertisements and helping launch the industry as we know it today. For content older than Feb 2013 please search our digital archives By: Ian P. Murphy facebook twitter linkedin email print In television’s early years, broadcasters were still sorting out what formats suited the new medium’s content best, and how its revenue stream—advertisements—might look. Along with seminal sitcoms such as The Patty Duke Show and highbrow fare like Playhouse 90, the warm glow of the Golden Age tube often featured live, extended sales pitches, with sponsors such as Philip Morris and Texaco underwriting whole shows. Some children’s programs were often little more than ads for candy and toys, like Bonobo Taffy’s The Magic Clown. While Vitamix’ 1949 blender show—often credited as the original infomercial—took up just under half an hour, many of the pitches ran at unusual and unstandardized lengths. "In the ’50s, [infomercials] were prevalent,” says Frank Cannella, founder and executive director of Cannella Response Television and one of the earliest producers of modern U.S. long-form ads. "People would go on the air and pitch a product; it might last seven minutes, or it might last 19 minutes.” By 1957, Variety estimated, viewers were watching more than five hours of ads in a typical week. And in 1961, FCC Chairman Newton Minow chastised the National Association of Broadcasters (NAB) in his famous "Vast Wasteland” speech, moving to limit "screaming, cajoling, and offending” commercials to a maximum length of two minutes each. Additional FCC regulations eventually capped the amount of advertising a station could broadcast at 16 minutes per hour in the 1970s. But soon, with a rapid expansion in cable television spurred by the Reagan Administration’s push toward deregulation, FCC Chairman Mark Fowler eliminated the restrictions in 1984. Broadcasters could now run as many :30 ads as they wanted back-to-back, or turn hour-long blocks of programming into a combination of content and pitch. "We found the average amount of commercial time being used was not excessive,” FCC chief of staff Charles Schott later said. "The theory was if people don’t like it, they can change the channel.” Birth of an Industry A handful of local channels had been running infomercials (with at least one beamed into Southern California from a pirate station in Tijuana), but marketers were thwarted by the small audiences early cable-access systems delivered. "The cable audience in the early ’80s was still a fraction of the total TV viewing audience,” says Timothy R. Hawthorne, founder and chairman of longtime DR agency Hawthorne Direct. 30:00 and 60:00 blocks of religious programming were already common, he notes, and while they usually included a call to action for donations, were "deemed non-commercial.” The first infomercial of the modern era was New Generation, a 1982 long-form pitching a hair-loss tonic adapted from Robert E. Murphy’s frequent appearances on Fred Lewis’ cable-access talk show. "Every time he appeared on the show, there were a lot of phone calls,” Cannella says. "I came in on the media side; they had done the production and used a different interpretation of the new law.” Just two years later, cable television began to take off, spurring demand for new programming and the money to pay for it. The long-form finally had room to run. "They had a lot of airtime, but didn’t have shows,” says Richard Stacey, president and CEO of Northern Response (International), Inc. "It was a perfect marriage: Deregulation allowed long-form commercials, and companies like ours had content.” The first surge in the industry was educational in more ways than one. Pitches for live get-rich seminars held in hotel ballrooms nationwide quickly morphed into sales of videotaped versions of the same seminars. Robert Allen’s No Money Down and Ed Beckley’s Millionaire Maker were early successes, and Tom Vu, Dave Del Dotto, and Don Lapre weren’t far behind. Beckley’s home-study course did about "$20,000 in sales on the Satellite Program Network on the first night,” says David Chaladoff, former vice president of Media for Hawthorne Communications and founder of David Chaladoff Media, Inc. "You would spend $1,000 or $2,000 and get back five, six, seven times that in sales.” "Long-form enabled a lot of stations to expand and not go black overnight.” -Frank Cannella, Cannella Response Television The market was ripe for the picking. "All of a sudden, you had this amazing amount of airtime,” says Greg Renker, co-founder and chairman of Guthy-Renker, LLC, which entered the industry from the audio cassette-manufacturing side with Think and Grow Rich in 1988. "The first [infomercials were] no-down-payment or get-rich-in-real-estate offerings, and the cost of media was so low that everything was working.” Stacey had been in the seminar business, offering courses on ways to get rich in real estate, the stock market, and the import/export field. "We started to see long-forms appear, and thought, ‘Hey, why don’t we just put that on an hour-long show?’ We couldn’t believe our numbers. I went to bed every night thinking I’d won the lottery.” Trust and Mistrust For the first few years after deregulation, infomercials benefited from the trust television had fought to win in the post-Wasteland, social-upheaval years—after all, Walter Cronkite was on TV. "People thought it was programming,” Stacey says. "The public thought it was a documentary. When I first saw Tom Vu driving a Rolls Royce, I remember going to get a pencil—and I think a lot of people did the same thing.” "[The long-form] was so new, you actually had to talk to the program director to get clearance for the show instead of the sales department,” says Rick Cesari, founder of Cesari Direct and an early infomercial marketer. "The revenue they could generate from these early half-hour shows was two or three times more than the advertising they could sell inside a regular half-hour show.” The money shored up the burgeoning cable industry and helped open up more airtime. "I remember seeing [stations’] numbers for the year, and the profit equaled long-form revenue for the year,” Cannella says. "Long-form enabled a lot of stations to expand and not go black overnight.” By 1987, hard goods joined self-help as leading products sold in long-form advertising, beginning with Sychronal tonics, Helsinki Formula cosmetics, Soloflex exercise machines, and other Amazing Discoveries. "After that, people started selling cookpots, cosmetics, blenders, housewares,” Stacey says. "Our focus changed from being a seminar company to being a marketer of housewares, fitness, and beauty products.” With inexpensive airtime, 800 numbers, and shippable products, business snowballed. "The success rate was still remarkably high in these early years,” Hawthorne says. "Now, we project that one out 20 or 30 infomercials succeeds. In 1985, that success rate was probably more like one out of 10.” But a get-rich-quick mentality began to invite consumer complaints and government scrutiny. "If you put the right product on the air, you could make a lot of money,” says Cesari, who was had early hits with the Secret to Success starring Mason Adams and the Juiceman with Jay Kordich. "But any time there’s an industry where you can make a lot of money very quickly, it can attract an unethical element.” Advertisers would take money and never ship product, he says; even Tom Vu was ultimately called into question. The FTC charged Synchronal with exploiting a confusing educational format to make false claims. "When you’re innovating, you tend to push the status quo,” Stacey says. "We had good innovators, and we had bad innovators. And so, the government started to look into the business.” "It was a town without a sheriff,” Renker says. "Some of [the marketers] were getting in big trouble with regard to claims and representations. We decided to play it straight. We put the money on the screen—and we used lawyers from the beginning. It was hard to be 100 percent legit, because it was all brand-new. Everybody was making wheelbarrows full of money, and there were no rules.” Growing Pains Rep. Norm Sisisky (D-Va.) convened a hearing of the Committee on Small Business in 1990 to investigate perceived problems arising in the infomercial industry. Renker testified, with Jeffrey D. Knowles, now a partner with Venable LLP, representing. "It became very clear that if we didn’t clean up our act as an industry, Congress was going to do it for us, really fast—meaning they might even shut us down,” Renker says. "That’s what prompted formation of the trade association.” The National Infomercial Marketers Association (NIMA, later ERA) formed with nine founding partners in 1990, and held its first convention the following year, attracting about 100 people to the Mirage in Las Vegas. By that time, the industry was worth an estimated $1 billion, not including home shopping, and DR ads—vastly improved from just a few years prior—were appearing on 90 percent of television stations. Big brands such as Bissell, Club Med, and Volvo began to run long-form DR, and big-name stars such as Cher, Suzanne Somers, Joan Lunden, and Jane Fonda signed on to pitch. What’s more, the long-form was making economic powerhouses and household names of the pitchmen themselves. Diet guru Richard Simmons grossed $40 million on Deal-a-Meal; Tony Robbins sold $100 million worth of Personal Power videos aided by guests Fran Tarkenton and Martin Sheen, and Victoria Jackson turned the coffee klatsch into a cash cow by sitting down with actresses Ali MacGraw and Meredith Baxter to talk Beauty Breakthroughs. Organized as an industry, long-form began to improve with better production values, stronger offers and upsells, and most of all, legitimacy. "ERA has done a good job of self-regulating advertising content, and it has become a very viable, reputable industry over time,” Cannella says. "I think we’re smarter than the traditional advertising guys—we make our clients money.” The Long Game For products with multiple features and higher price points, infomercials were (and are) a natural choice. "It’s common sense: If you are sitting across from someone and trying to sell them something, it is easier to do in 30 minutes than in 30 seconds,” Cesari says. Some products, such as gadgets with a specific, straightforward purpose, don’t need as much explanation. "Two minutes, and you’re done,” Cannella says. "If you’re selling something like Proactiv, I need to know as much information as I can, hear what the testimonials have to say, and then I need to close. That doesn’t happen in 30 seconds. What long-form does is give you all of the features and benefits of a product, and spends time selling you, where your average format is just too quick if the product has any complexity.” The long-form is also "fabulous for branding,” Renker adds. "You can tell a story, and then get the opportunity to move on to other mediums such as radio, or five-minute, or two-minute. That’s why Proactiv continues to do so well—we spent 10 years telling a 30-minute story, and people actually got it.” "The old adage still holds true: The more you tell, the more you sell,” Hawthorne says. "Spending a half-hour with a product allows for significant ‘reason why’ rational sales techniques—testimonials, product demonstrations, how-it-works animations. There is no other format where a consumer can learn so much about a product and take the time to make a considered, left-brain decision to purchase.” Big-Time Risk As infomercials grew into big business (now $10 billion, according to one estimate), they have also become big risk. Gone are the days when marketers could spend $10,000 or $20,000 on media and net half a million in product sales. If they’re lucky, an infomercial can cover production and media costs, and profits are realized at retail or through repeat purchases; more often, the infomercial is a loss leader. "You’re either driving retail, or continuity, or both,” Stacey says. "In the early days, you didn’t have to think about retail or continuity. You would buy a hunk of airtime for $10,000, and the next morning, you would have $10,000 in profit. Long-form will continue to play a role in the marketer’s toolkit, but I don’t think you can survive on long-form only. You’ll have long-form as a part of a multimedia strategy that includes short-form and Internet, depending on the product.” Media fragmentation makes it difficult to know if infomercial money is well-spent. Throughout the ’80s and ’90s, a dedicated 800 number could tell marketers where orders originated and which time slots paid best. Today, most sales close online, and on an increasing variety of devices. "I used to be able to tell you that the order came from the smallest town in North Dakota,” Renker says. "Now, our tracking is not as precise. The next technological evolution for our industry will be precise attribution. If we can attribute the source of the sale, we can spend more than ever at that source.” Rates have caught up with the selling power of the infomercial, making it more expensive to enter the industry, and regulations have made the process more intricate. Just getting eyeballs on the product can be a struggle today, since nobody channel-surfs; cable viewers skip directly to the shows they want, and younger viewers binge-watch streams of commercial-free content. Once, "You would lay on the couch and scan through the channels,” Stacey says. "You’d catch a show and see somebody lighting a car on fire and say, ‘This is for a car wax?’ Those days are gone.” Cesari Direct recuts testimonials for clients such as Silk’n cosmetics and GoPro cameras into YouTube videos for today’s shortened attention spans. "We’re still getting good results,” Cesari says. "A long-form show can be a pretty powerful marketing tool—and you can always repurpose the footage [for] the different social media channels.” By its nature, long-form takes time—and that may be now working against it. "I’m afraid of the ever-shortening attention span of all of us, and the fact that we can barely make it through a three-minute YouTube video,” Renker says. "The challenge is trying to understand the speed at which digital is changing how people behave and order product. How can we continue to be effective storytellers and value-builders in such a short amount of time? We no longer have time on our side.” "Long-form will be around for years to come on linear television, but its fate in digital will be cut short—literally,” Hawthorne predicts. "Long-form in digital is now defined as anything over one minute. True, digital long-form will probably be video executions between three and seven minutes. The half-hour infomercial will gradually fade away over years—and it will be missed.” For now, marketers can continue to bank on the long-form. "I still consider the infomercial to be the ultimate selling tool because you get the best persuasion,” Renker says. "We are spending as much, if not more, on 30-minute time as we ever have. We continue to be excited about the [shows] we’re producing, because if they hit, it’s on a fast track to big scale. When you hit one, there is no business I’d rather be in.” But the old days were the stuff of legend. "A lot of us were very lucky to be there in the business at the time it started,” Stacey says. "It was just like printing money—and it was a lot of fun, too.” No related posts. - See more at:

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