The industry that brought you the Ginsu knife and the Ab Buster — among other memorable TV products — is now courting dot-com advertisers.
Infomercial makers have concluded that dot-coms are uniquely suited to their form of advertising, especially now that plunging stock prices have put pressure on Internet companies to build revenue and profits in this unpredictable market. How many online companies will respond to these suitors, however, remains to be seen.
Tyee Euro RSCG, an agency in Portland, Ore., that specializes in infomercials, has developed two 28-minute, program-length commercials for Internet clients: Excite@Home, a provider of Internet and broadband services through cable hookups, and Gazoontite.com, a Web site that offers products and information for allergy and asthma sufferers.
Executives of Tyee, part of the Euro RSCG Worldwide unit of Havas Advertising, contend that the millions spent by dot-coms in traditional television advertising have not been effective. Some Internet advertisers were disappointed after their $2 million, 30-second commercials during Super Bowl XXXIV in January failed to generate more Web traffic, the executives say.
"Most Internet companies have complex stories to tell about how their products and services work, and traditional offline advertising hasn't proven to be very effective in building brand awareness or pushing consumers to Web sites," said Hugh Allspaugh, vice president of client services and business development at Tyee.
Infomercials are designed to generate immediate sales results that can be measured by the volume of traffic to a Web site or calls to an "800" number — a capability that could prove attractive to dot-coms in a hurry, said Bill Cella, director for broadcast and programming at Universal McCann, the media unit of McCann-Erickson Worldwide in New York, part of the Interpublic Group of Companies.
"I think what's happening is that corporations buying into the Internet now have business plans with hard dollars against sales," Cella said. "They have to justify the purchase. And a way to generate revenue is to deal with direct response advertising. It's a way to sell the stuff."
One drawback, of course, is that infomercials do not usually get prime time network television exposure. Infomercial time is typically sold during off-peak hours. What is more, 30 minutes is a long time, Cella said, conjecturing that two-minute, direct-response ads — similar to those run by music marketers or magazines — might prove more popular for dot-coms.
Tyee Euro RSCG is catching the front end of a trend among dot-coms, said Elissa Myers, president of the Electronic Retailing Association, a trade group whose members include producers of infomercials. Her group gets calls almost daily from Internet retailers seeking information, she said. There is so much interest that the association plans to include a feature article about the dot-com trend in the next issue of its publication.
Internet companies spent about $2 billion on television advertising last year, but critics have said that many of the companies had unrealistic expectations about how quickly they could build brands. Myers said she was not surprised at some dot-coms' disappointment, because the advertising had focused on image building, rather than emphasizing direct-response methods like conveying a sense of immediacy and using special offers to spur people to action. "This is a specialized field that we believe is perfectly positioned," Myers said.
But Joe Mandese, editor of the Myers Report, a media industry newsletter, said that while infomercials might make sense for Internet companies whose businesses require special explanation, the media industry is actually moving to shorter commercials. In Canada, for example, the government recently allowed five-second commercials, intended specifically for dot-coms that need only identify their Web addresses, he said.
If a Web site requires 30 minutes to explain what it does, Mandese said, then it may have "some real branding issues on the table."
"Dot-coms are one of the most valuable categories of advertising and the fastest growing, too," said Mandese, noting that advertising outlays by such companies grew 400 percent last year. 'I'd go after it, too. But why would dot-coms want long-form advertising when their long form is their Web site?"
Gazoontite, a privately held company started by a former Clorox brand manager, Soon-Chart Yu, uses an infomercial because it is cost-effective, provides measurable sales results and offers lots of time to explain gazoontite.com, Yu said.
The long ad, he said, will run for eight to 10 weeks beginning in May, and the total cost of production and media time will still be less than the cost of a 30-second spot on the Super Bowl. The company is also running outdoor and radio ads.
Still, Yu acknowledged that he did have to overcome the infomercial's image problem.
"The perception of the informercial is yell and sell, but it's changed," said Yu, explaining that he was impressed with Tyee's infomercials for clients like Apple Computer and Philips Consumer Electronics.
Tyee actually avoids the term "infomercial" because of the form's low-end reputation for relentless pitching. Rather, Tyee describes its commercials as formated more like television programs, like one for Excite@Home that depicts a family trying the company's high-speed cable-access service, which is contrasted with traditional dial-up Internet-access service.
"Infomercials give the impression of Ginsu knives; we're going after high-end Fortune 1,000 clients with branded messages," said Spencer J. Brown, president and chief executive at Tyee. "These are all complex messages."
Jennifer Doyle, Excite@Home's vice president for marketing in Redwood City, Calif., said the company chose the infomercial format after witnessing its success with live demonstrations at malls that enabled people to see the product.
"It's very challenging for consumers to understand something they have never experienced," Doyle said. "It's a lot different than saying a spaghetti sauce is zesty."
Excite@Home provides the infomercial to its cable company partners, which deliver the service, she added. They run the infomercial during available time slots and on local channels. It is part of a larger advertising campaign, Doyle said.
Still, some analysts said they considered it incongruous that fast-moving Internet companies would rely on an old-media sales tactic better known for peddling slice-and-dice appliances.
"The irony here is that the destination — the Web site — should be able to tell you everything," Mandese said. "Web sites are the ultimate infomercial. It's ironic that they would cultivate that category."