The Making Of An Info-Mercial28.5 Minutes $125,000 in Production Costs 12 Low-Budget Actors and an Ex-Diamond Salesman But Wait, There’s More! By Carlye Adler
November 1, 2002
(FORTUNE Small Business) – Ron Perlstein and Vicky Horn are sitting at a kitchen counter, drinking coffee and chatting about vacuum cleaners. The conversation looks natural enough, but Horn’s a professional actress, and they’re talking only about one vacuum in particular, called the Roomba, a new robotic model designed by MIT-trained engineers. Perlstein is the executive producer and CEO of InfoWorx, a Boca Raton, Fla., company that produces infomercials, and he’s bursting with excitement about the Roomba. He’s shooting a half-hour show about it, and right now he’s trying to channel some of his enthusiasm into Horn’s delivery.
“Roomba is a darn effective appliance, isn’t it?” Perlstein asks.
“Roomba is an effective appliance,” she answers.
As they talk, Horn’s comments get recorded by cameras focused on her from different angles. Three days of the five-day shoot will be devoted to testimonials. Perlstein is bringing in 12 actors who each received a demo Roomba about a week before filming. Only a few will make it into the finished product, and the ones who do will be onscreen for five to 20 seconds, but the testimonials are crucial, which is why Perlstein cares so much about Horn’s phrasing and emphasis.
Perlstein, 51, says he likes to use “everyday, ordinary people” as actors. “It isn’t scripted,” he says. “They use their own words.” Just to be safe, though, he gives them a quick lesson about talking on camera. Speak in sound bites, he tells Horn, “like the politicians do.” He also instructs her to keep all her points short, ten seconds or less, and to begin each sentence with the product’s name. Then he proceeds with his line of questioning.
“You have a home-based business, so you can apply time saved to making money?” Perlstein asks Horn.
“Roomba saved time with my home-based business,” says Horn. “I was more productive, more efficient, and making more money!”
“Perfect,” he says. “What a product!”
These are good days for people in Perstein’s line of work. Despite the decidedly low-budget feel that many infomercials give off, they’ve long been used by small businesses trying to launch new products. About 800 28.5-minute ads will be produced this year, up 20% from 2001. In a typical month infomercials will run more than 225,000 times, comprising one-third of all television airtime, and the revenue they generate is in the billions. (Estimates range from $1.6 billion to $15 billion, though the business isn’t audited by anyone, and exact numbers are hard to pin down.) Some of the most mocked infomercials have succeeded wildly and made entrepreneurs rich. Billy Blanks sold millions of his Tae Bo workout tapes at $34.95 each, according to market sources. Ron Popeil’s Showtime Rotisserie Oven generated $500 million in sales. Even the ThighMaster took in $100 million.
Back in the kitchen, Horn and Perlsetin are wrapping up her testimonial. Perlstein probably won’t use the section where Horn says the Roomba doesn’t clean any better than other vacuums, but other than that he’s happy with her performance, declaring that the piece came off exactly as he’d wanted. “These don’t work unless they’re sincere, honest, and truthful,” he says. “From the heart.”
Infomercials date from the 1940s and the dawn of television, when network shows were aired only in the morning and evening, and broadcasters were desperate to fill the time in between. Admen like Alvin Eicoff in Chicago, who hawked things like linen hair curlers, along with entrepreneurs like the Popeil family (the Chop-O-Matic and Veg-O-Matic), saw opportunity in those empty spaces. They created five-minute to 30-minute direct-response commercials and pushed their products with the same hyperbolic style they’d perfected at their previous venues: boardwalks and state fairs. In 1968, AT&T introduced the toll-free 800 number, and A. Eicoff & Co., the infomercial pioneering agency, started routing buyers through a single call center, making sales easier to track.
But it wasn’t until June 1984, when President Ronald Reagan deregulated the television industry and opened the airwaves to more commercial time, that the modern industry was born. In 1985 an advertiser could purchase cable airtime for as little as $250 per half-hour, and the industry attracted inventors with quirky products like Herbalife diet supplements and the New Generation hair-treatment program, producing millions in revenue. Although media costs subsequently rose, companies continued buying the half-hour blocks, because the niche aspect of cable channels meant an audience could be targeted more precisely. As the industry took in more money, it also gained credibility. Ford, Microsoft, and Kodak used infomercials to market their products, and in 1992 presidential candidate Ross Perot hit the airwaves to talk about his campaign.
Of the 800 new spots created each year, only about 20 are real hits–that is, “something to retire on,” as Sam Catanese, CEO of Infomercial Monitoring Service (IMS), puts it. Small companies are willing to take that risk, though, because of the low investment required. Production costs for a typical 30-minute spot run from $125,000 to $650,000, according to the Direct Marketing Association. (For a breakdown on where that money goes, see table “The Ads Add Up.”) Compare that with 30-second ads, where a decent one runs about $500,000 and some producers won’t turn the cameras on for less than $800,000.
On top of that, infomercials offer one other advantage: They’re linked directly to product sales, so it’s immediately clear whether the product is going to succeed: The phones either ring or they don’t. If the orders aren’t pouring in within 24 hours, a show can be tweaked–or yanked entirely. But get the formula right and they can run for years. As of press time, Proactiv skin care had been on IMS’s “Top 25 Infomercial” chart for 315 straight weeks. The Attacking Anxiety program, a series of self-help products by Lucinda Bassett, a recovered agoraphobic and a bestselling author on depression, had been on the chart for 500 weeks. Carleton Sheets, a real estate tutorial, holds the record at 509 weeks–more than 92 years without missing a week. It’s still running today.
Of course, for each of those hits, dozens bomb, or worse, come under fire from consumer-protection advocates. Since 1989 the Federal Trade Commission has taken action against nearly 300 marketers of infomercials, according to Lesley Fair, a senior attorney in the Division of Advertising Practices at the FTC. It recently won a temporary injunction against the company that employs TV psychic Miss Cleo (people who never requested the service were allegedly billed, as were some dead people; the company declined to comment). In extreme cases, the FTC can even go after actors who appear in the programs–like ex-Dodger Steve Garvey, who’s being sued by the government over the Fat-Trapper and Exercise in a Bottle diet programs. Garvey’s attorney denied the charges. Infomercials have such a bad reputation that even A. Eicoff & Co., the agency that pioneered them, has quit the business, not wanting to help push “gadgets, gimmicks, and grapefruit diets,” according to the company’s president and CEO, Ron Bliwas. Instead it does direct-response ads of two minutes or less.
Ron Perlstein, however, is quite happy with infomercials. Like many in the business, he grew up as a pitchman. By the time he was 12, he was writing ad copy for his family’s jewelry business. After college, he struck out on his own, as “Ron Perlstein, the Discount Diamond Dealer,” adopting a Crazy Eddie persona and selling diamonds through 140 different radio commercials. He parlayed that experience into his own advertising agency, which eventually focused exclusively on direct-response advertising.
He’s been doing infomercials for ten years now–everything from Carnival Cruises to Snorenz (a throat spray that allegedly prevents snoring). His company typically charges $125,000 for a 28.5-minute infomercial, plus a 2% royalty, and he says he takes in about $15 million in revenue each year. Perlstein’s also careful to stay in compliance with the FTC rules: InfoWorx has a litigation-free record–by the somewhat reduced standards of infomercial ethics, that’s saying something–and he says he turns potentially problematic products down, including electronic ab belts and a diet supplement that had ephedra in it. “Did you see the movie Jerry Maguire?” he asks. “I’m like him–an aggressive guy who has a conscience trying to make a living in a business filled with scumbags.
That infomercial reputation is why Colin Angle hesitated before using one to hawk the Roomba. Angle is the co-founder and CEO of iRobot, a Somerville, Mass., company launched in 1990 by two MIT graduates and their professor. The outfit specializes in artificial intelligence, but the Roomba is its first major consumer product (most of its earlier robots were used by the government; one searched the rubble for survivors after the World Trade Center attacks). In weighing whether to market the Roomba on television, Angle, 35, says he had some concerns. “Infomercials sell products that can’t possibly work,” he says. “They sell diet products and use different models for the before and after shots–it’s crazy. I thought, Is our reputation going to be impacted?”
But vacuums are a natural for infomercials, especially one like his company’s. The Roomba propels itself around the room and will vacuum a carpet in the owner’s absence. (A “virtual wall,” like an electronic dog fence, keeps it from going where you don’t want it.) According to the DMA, electronics is one of the best-selling infomercial categories, but cleaning products also do well, along with anything that will make you “rich, thin, or beautiful”–all industry favorites. The demographics were also on Angle’s side: 79% of infomercial watchers are women, and 46% have one or two kids. Plus there was a historical precedent: The Fantom vacuum cleaner, first of the now much-copied bagless models, put out an infomercial in 1993, and sales shot from $4 million that year to $242 million in 1999. Weighing all the factors, Angle decided to go for it. “There has to be a right way,” he says, adding that he considers the venture an experiment. “I hope Ron will make us a great show. Keep your fingers crossed.”
After weeks of preparation, everyone on the Roomba shoot–Perlstein, Angle, the director, the set designer, the cameramen, the actors, and a few production assistants, whose job it is to spread dog hair and crushed Fruit Loops on the carpet–gathers for the first time. Perlstein passes around the fourth draft of the script. He decided that the show would be in the “demo” format, a style driven by product demonstrations and the presenter’s personality. (Other options are the “talk show” format, used by Proactiv and the Psychic Friends Network, and the “lecture format,” used in Susan Powter’s “Stop the Insanity” weight-loss program.) The Roomba show will also have animation demonstrating its signature overlapping-circle pattern of cleaning. Because iRobot has an animator on staff, the company did its own animation, shaving a bit off the final bill.
For casting, Perlstein opted for a male host (“Males have more credibility,” he says) and a woman, the soccer-mom type, who would learn about the wonders of the Roomba along with the audience. After three days of casting calls and looking at head shots, Perlstein hired Los Angeles-based Steven Meek as the host. Meek knows the infomercial drill–along with roles on Another World and Ally McBeal, he’s appeared in spots for the Aerobed and the Aerobatron. For the soccer mom, Perlstein brings in Jean Carol, who played Nadine on Guiding Light and once hosted an infomercial about Vita Pet Plus (diet supplements for cats and dogs). Meek and Carol meet for the first time on the set, which is also the first time they see the script–or the Roomba. Set designer Tim Connelly has built a carpeted counter where Meek can explain how the vacuum works. Connelly also built a living-room and a bedroom to show the Roomba in action. (“Roomba is small, it goes under beds, couches, tables, chairs, like you never could before!” the script reads.) One of Connelly’s most important set decisions was choosing a color for the carpet. Too light and it wouldn’t show the potato chips, Fruit Loops, and Cheerios scattered around for the Roomba to suck up. “I wanted everything to pop,” he says.
He also adds some special touches to make the place look like a real home. A Kandinsky-esque painting hangs on the wall and a glass snail sculpture sits on a coffee table. Some of the furniture is rented from stores, but other pieces, surprisingly enough, come from the set designer’s own house. “I buy everything knowing that it could be a prop,” Connelly says. He doesn’t put glass on any of the framed pictures in his house, so they won’t reflect on camera if he ever needs to use them.
When shooting starts, everybody watches from the sidelines. The director, Perlstein, and Angle view what’s happening on three TV screens, each hooked up to a different camera. The actors’ lines are scrolling on a teleprompter, but because it’s impossible to read the screen and watch the Roomba at the same time, they’re improvising a bit, which Perlstein isn’t crazy about. “They’re not even following the script!” he says. The actors are interrupted a lot, and during one take, Meek shakes his head instead of nodding. In another he inadvertently says “Ugh.” (Director Michael Kintzel tells him, “It was like a fly went into your mouth!”) The makeup artist stays close to check hair and blot any perspiring foreheads.
There’s also some script rejiggering. One section explains how the Roomba is right for everyone: “Moms, dads, singles, bachelors, pet owners, even offices … for a senior citizen….” But doesn’t like how the host says “senior citizen,” so he gives the line to the soccer mom instead. Angle gets up periodically to test the Roomba and crush the cereal that is used in demonstrations. He doesn’t try to fake the demos in any way. No stain-resistant stick or spray is used, and Angle crushes the Fruit Loops with generous force. (There is a note in the script, however, to use cake crumbs but “no icing.”)
The most important part of the entire production is the “call to action.” This is the part–you know it–when the telephone number comes up and the announcer instructs you to “Call now” and “Have your credit card ready!” The Roomba infomercial sets it up by showing black-and-white shots of other vacuums with escalating prices ($200, $300, and $400), and then the announcer makes the offer: “If you call right now, you can get the Roomba for the incredibly low price of $199.95!!! Believe it!!! But wait. That’s not all!! Order in the next 30 minutes and we’ll add a second virtual wall absolutely free!!!”
While this approach sounds cliched, it still works better than anything else the infomercial pros have come up with. The call to action happens two to three times in a half-hour show, and it can decide the success of the entire campaign, which is why companies are willing to spend so much on media time just to run tests ($50,000 is about average), and why the offers are constantly being tweaked. For the Roomba, Perlstein tapes two offers so he can see which one works best–$199.95 or “just three easy payments of $66.95.” The specific language of the offer is crucial. Five years ago a cleaner solution called Zap! wasn’t selling until the script was altered to read “Call in the next five minutes, and we’ll throw in your Zap! pads absolutely free!” Zap! pads are basically sponges, but the offer was enough to get people to pick up the phone. Sales that year, 1997, went from $300,000 to $7 million, and an updated version of that same spot is still running.
After the Roomba production wraps up comes a two-week editing period, during which Perlstein writes a script for the telemarketers and makes sure all the fulfillment and distribution is in place. He also secures a deal with the Home Shopping Network, which will sell the Roomba on its own programming. For his part, Angle negotiates to get his vacuums shipped to stores like Brookstone, Hammacher Schlemmer, and the Sharper Image. That’s where iRobot is hoping to hit the jackpot, because successful products can sell three to four times as much in retail sales. The ideal infomercial strategy is for the product to generate enough momentum on television to get placed on store shelves, since most people still prefer to buy things only after they can touch them and see what they look like out of the box.
As this issue went to press, the Roomba infomercial was set to air for the first time and begin testing. The odds are tough: Only one in 50 infomercials generates enough in sales to cover its own production costs, according to Steven Dworman, who has tracked the industry for the past 12 years. The vacuum has already gotten some good coverage in places like CNN and the Wall Street Journal, which should help, but nonetheless Angle says he and the rest of the iRobot crew are anxious. They’ve already manufactured tens of thousands of Roombas–the largest inventory risk they could afford–and once the spot starts testing, they’ll have a good idea within 24 hours of how well it will sell. “Maybe we’ll have too many,” he worries. “Hopefully not…. If we have a hit, we’ll be short.” We’ll see soon enough. Stay tuned–probably on Lifetime, around 4 A.M.