Quick history quiz – who were the first pioneers of electronic direct response marketing? If you named anyone who has ever been profiled in this publication, you are regrettably incorrect. Try these names – In 1921, Minister Paul Rader began purchasing a Sunday block of airtime on radio station WBBM in Chicago. Seven years later, Pastor Donald Barnhouse, bought airtime for his church nationally, on the CBS Radio Network . It was their notions that the airwaves could be used to reap financial donations exceeding the price they paid for the media. Their gambles succeeded, and thus the first broadcast “infomercial” test and national roll-out were both born.
Rader and Barnhouse had no idea of the impact of the programming they had pioneered. Seventy-eight years later, preachers still buy blocks of time funded by listener donations, while mainstream direct marketers have struck gold with “radio infomercials”. More companies than ever have built their business models around 26 minute programs, which radio stations make time to air on weekends, evening and overnights. The formats for these shows mirror typical talk radio, with hosts, guests, callers and central themes.
One Top-10 market radio station General Manager, whom I interviewed, referred to infomercials as an “integral part of the broadcast portfolio. I don’t always like them all, but the audiences keep growing, while the advertisers keep coming back!” The numbers don’t lie – last year, rep firm KATZ DIMENSIONS notes the stations whom it represents book $XXX million in infomercial advertising dollars. SALEM COMMUNICATIONS, the nation’s fourth-largest radio station ownership reported estimated 2001 infomercial billings estimated at $4 million.
One of the reasons for the success of this format is the cost-efficiency of the medium. Production costs rarely exceed $15,000.00. The industry norm is between $5,000.00 and $12,000.00, including Talent! And the cost of media is quite cheap. A look at recent avails reveals markets such as Louisville and Santa Barbara for $150.00 per play, Orlando and Tampa at $300.00, and clear-channel KSL in Salt Lake City for a mere $500.00. Even New York and Los Angeles Stations range from $600 – $2,000.00. $10-15,000.00 allows you test multiple airplays in one to two dozen markets. All told, you have a media vehicle which actually tests cheaper than buying a Top-10 market spot schedule in this era of dot-com driven media prices.
Infomercials are now more mainstream than ever before, with most top-ranked News and Talk stations readily accepting these programs. Even music stations have jumped on the bandwagon. Besides the aforementioned KSL, legendary stations which currently air programs include KMOX (St. Louis); KLAC, KLSX & KRLA (Los Angeles); WJJJ (Pittsburgh); WJFK-FM (Washington, DC) and WABC-AM (New York, NY).
So just WHO is reaping rewards from radio’s hidden goldmine. Top DR categories include: 1. Health & Nutrition; 2. Diet; 3. Financial (when kept simple) and 4. Business Opportunity. Marketers who have the following models have had best results generally utilize:
a. Lead Generation – advertisers in the service business (insurance, mortgages, dot com, etc.). Listeners are more likely to call for more information, yet statistically are more qualified to become purchasers. Also, radio listeners are more accustomed (than TV or print audiences) to calling in response to radio promotions or call-in opportunities.
b. High-Priced Front End offer – A model which has built the fortunes of several companies in more recent years. The reason for this success is simple – in 26 or so minutes, you can cover a lot of ground on one topic, answer all prospective questions, and win the confidence of the listener. Add in a strong call-center to close the lead, and radio listeners routinely spend several hundred dollars for one product or service.
c. Continuity Models – Natural nutritional supplements are the most common (and usually most successful) example of this model. Radio offers better-qualified leads than other media, and radio users yield greater credit card orders. It stands to reason that a call will order several months worth of a supplement. This model can also used for Internet services, subscriptions, food supplements and beauty aids, to name a few more.
It astounds me that more marketers have not yet reaped the rewards of this low-risk, high-potential format. Before the media costs catch up with the rest of the advertising community, give it a try. If you or your product have a face for radio, infomercials can be your answer.
Joe Rashbaum is the President of THE RADIO SOLUTION COMPANY, a full-service, radio direct-response agencies. Joe has consulted many first-time radio users, including traditional television and print direct marketers, collectible and sports licensees, and SALEM RADIO, the fourth largest radio ownership. Joe may be reached at (805) 279-3391 or inquire below.