Companies that develop a product that is difficult to explain to consumers through packaging or a traditional commercial may opt to make an infomercial. While infomercials can be made independently, the assistance of an ad agency that specializes in infomercials may be necessary. The average cost of an infomercial tends to fall within a wide range because of the options available to companies when planning, producing and broadcasting an infomercial.
Purpose of an Infomercial
An infomercial is intended to inform consumers about a product that cannot be properly explained without a demonstration. The purpose of an infomercial in to increase sales by explaining the usefulness of a product that is for sale.
The ease of using the product that is being offered for sale is often the focus of an infomercial.
Standard Format of an Infomercial
Infomercials are typically 30 minutes in length, and it is important to make every minute count in order to retain the interest of viewers.
Most companies choose to demonstrate the effectiveness of the product that is being sold through the infomercial. Using an audience of people who are actually interested in trying out the product can help with this goal, but companies should remember to choose the audience carefully to ensure anyone who demonstrates the product is comfortable with being on camera. While previous acting experience is not a requirement, it could be useful.
The product that is being demonstrated during the infomercial will first be explained briefly. The demonstration will follow, and people who have no prior experience using the product may be asked to use it in order to demonstrate ease of use.
Value of the product must be established during an infomercial because the pricing structure of the product will be discussed when ordering information is given. It must be apparent that a deal is being offered because the product provides much more usefulness than the cost would indicate.
Ordering and shipping information is typically given at the end of the infomercial. A brief recap of the demonstration may follow the ordering information to remind consumers of what they will receive should they decide to order.
Costs of an Infomercial
The costs of an infomercial vary widely because of the different components involved in the process of making an infomercial. While making an infomercial could cost as little as $20,000, the average cost is $200,000. This cost only reflects the cost to make and test the infomercial. Monthly costs are incurred in order to secure a time slot and have a network broadcast the infomercial.
This is where most of the budget for an infomercial is spent. Hiring an infomercial ad agency is recommended to ensure success, but these specialized ad agencies do not come cheap. The minimum cost spent on an ad agency is around $100,000. The components included in this cost are writing a script, hiring someone to demonstrate the product on camera, selecting the audience and taping the actual infomercial.
• Test Runs
It takes approximately two weeks of testing the infomercial on different networks and in a variety of time slots in order to determine which network and time slot is the best. Reaching the target audience is the goal of this portion of the infomercial process. Testing costs approximately $25,000.
• Telemarketing/Customer Service
Someone has to be available to answer the phones when customers call to order the product. This can be done in house, but some companies opt to use an inbound telemarketing service. Customer service representatives alone could cost upwards of $5,000 per month.
• Broadcasting the Infomercial: Ongoing Costs
The best profits can be had when an infomercial is broadcast during the day on a weekend, but a premium must be paid for these time slots. The price range for running an infomercial is between $50,000 and $500,000 per month. Companies need to determine what the best option is by closely tracking sales during test runs to calculate the ratio of sales to costs related to the infomercial.the aim of building name recognition and brand loyalty over time.