The lucrative secret behind infomercials

Too many goodies in this article:

Collectively, the U.S. market for infomercial products stood at $170 billion in 2009 and could exceed $250 billion by 2015. In fact, with the worth of the entire U.S. network and cable industry estimated at $97 billion as of 2013, DRTV is much bigger than TV itself.

Think a four-pack of ShamWows at $20 is the once-in-a-lifetime steal the pitchman says it is? Think again. You’re paying a 1,500 percent markup for some scraps of cast-off industrial rayon and polypropylene. The wholesale cost of a comparable product is about 1 to 30 cents apiece. But put some funky branding on them, give them a cool pitch, and those shammies soak up cash as easily as spills.

Producing a half-hour infomercial can cost anywhere from $25,000 to $250,000, depending on the production values and the host or talent involved in the shoot. For the sake of comparison: The average cost of producing a 30-second national TV commercial is about $350,000.

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An infomercial buyer can produce and air a small test campaign for about $100,000. Any sales generated by the infomercials in the testing phase are almost incidental. If the response rates are decent (and remember, the bar is set pretty low: about 1 percent on average), the campaign can recoup a small fraction of its investment while still running a modest loss.

via The lucrative secret behind infomercials – The Week.

Kindle owners spend $1,233 per year on Amazon compared to $790 per year for Amazon shoppers who don’t

This interesting.  Correlation or causation?  Give away Kindles to your userbase to increase their lifetime value!  The irony is that Google was the pioneer for this idea of free smartphones/tablets (subsidized) but maybe Amazon will get there first.

Based on its research and analysis, CIRP estimates that Kindle owners spend $1,233 per year on Amazon compared to $790 per year for Amazon shoppers who don’t own one of the company’s e-readers or tablets. Kindle owners aren’t necessarily buying more at a shot, but are buying more frequently.

via The Amazon Kindle Numbers That Jeff Bezos Must Really Care About – Jason Del Rey – News – AllThingsD.

A Penny For Your Song? Spotify Spills Details On Artist Payments

Spotify’s new data suggests there is money for hit makers. The company says, for instance, an unnamed “global hit” album generated $425,000 in revenue from Spotify during the month of July, while a Top 10 album generated $145,000…

When the whole group of paid and unpaid clients is tallied up, Spotify says it generates an average of $41 per user, higher than the $25 that Spotify says the average U.S. adult pays for music in a given year.

via A Penny For Your Song? Spotify Spills Details On Artist Payments – Speakeasy – WSJ.

Multi-Screen Growth Stats

Courtesy of Flite:

According to the 274 media and advertising professionals surveyed, media spend on multi-screen campaigns is expected to grow from 20% to 50% over the next three years here, multi-screen campaigns are defined as those taking place over the same timeframe and across at least two screens, including PC, tablet, smartphone, and television. Forty-eight percent said that multi-screen campaigns are very important vehicles for projecting advertising messages today, and 88% said that the same will be true by 2016.

via The Future of Multi-Screen Campaigns — Flite Blog.

The market cap of ad based internet companies is almost $100 billion more than total global ad spending

The market cap of ad based internet companies is almost $100 billion more than total global ad spending

via Twitter / StockTwits: The market cap of ad based ….

Turner’s Ad Exchange U-Turn

Six months ago, Turner said it refused to sell its online ad inventory through exchanges. Today, it officially unveiled its very own ad exchange.

Turner isn’t alone. The number of major online publishers shunning programmatic channels is dwindling rapidly. Early this year, ESPN, USA Today and Hulu all said they refused to sell ads that way. Just seven months later, all of them do.

via Turner’s Ad Exchange U-Turn | Digiday.

Nielsen: Old School TV Reigns Supreme At 58% Of Ad Spend, Internet Display Up 27%

In the first half of this year, Internet display ads only took 4.3% of all spend. In other words, for ever dollar spent on advertising by a brand, only 4.3 cents were online. As in years past, Internet continues to be the fastest-growing of all mediums, growing by nearly 27%, nearly six times as much as TV spend which, yes, is also still growing, compared to declines in other traditional mediums like newspapers, magazines and cinema.

via Nielsen: Old School TV Reigns Supreme At 58% Of Ad Spend, Internet Display Up 27% In Q2 | TechCrunch.

Nielsen’s New SDK Adds Mobile Viewing To Its Traditional TV Ratings, Uses Data From Facebook To Match Demographics | TechCrunch

To figure out who is watching those streams and where, Nielsen says it will use “big data and a census-style measurement approach.” This will involve matching information from services like Facebook — presumably based on your login credentials for those TV apps — and combining this with its existing National People Meter panel.

via Nielsen’s New SDK Adds Mobile Viewing To Its Traditional TV Ratings, Uses Data From Facebook To Match Demographics | TechCrunch.