Advertisers moving on infomercials

Less than a week after the crtc's decision to lift the time restrictions on infomercials, the marketing and advertising industries are in full motion to create and sell the long-format commercials which can now be broadcast in Canada day or night.The...

Less than a week after the crtc’s decision to lift the time restrictions on infomercials, the marketing and advertising industries are in full motion to create and sell the long-format commercials which can now be broadcast in Canada day or night.

The Canadian Radio-television and Telecommunications Commission’s long-expected announcement was greeted with steady applause last week at this year’s Canadian Association of Broadcasters conference in Winnipeg.

Under the federal broadcast regulator’s ruling, private broadcasters may now air the long-format infomercials any time, including primetime.

Previously, they were restricted to 12 minutes of advertising per hour between 6 a.m. and midnight. Infomercials longer than 12 minutes could run only between midnight and 6 a.m.

‘We’re leaving it up to viewers to judge how popular these advertising programs will be,’ said crtc Chairman Keith Spicer in a post-lunch address to half of the 835 delegates attending the cab conference.

Confident the half-hour spots attract a valuable audience, Royal Bank is already planning three new infomercials.

Prior to the regulatory change, Royal had already aired three infomercials, including a Quebec ad promoting car loans, and an ad that ran in Vancouver in the spring promoting rrsps.

Until now, these spots have aired only between midnight and 6 a.m.

Although she will not say what topics the new infomercials cover, or when they will be broadcast, Marie-Josee Vinet, manager, direct response advertising at Royal Bank’s headquarters in Montreal, says the crtc decision will encourage a lot more financial institutions to move into the infomercial field

Infomedia International is a London, Ont.-based company that buys air time on behalf of infomercial clients such as Solar Flex/Nordic Track and General Motors Co. of Canada.

Gerry Stirling, Infomedia executive vice-president, says the crtc decision will change the advertising landscape overnight.

Stirling sees automotive manufacturers, hospitals and fundraisers, appliance firms and furniture companies investing in the infomercial medium.

Terry Sheehy, media director at Leo Burnett, says it is too early to see a lot of movement at his end, but he is expecting the telecommunications sector and others requiring information-heavy communications programs to make use of the medium.

Too limited

In the past, some of Sheehy’s clients have toyed with the idea of making full-motion infomercials, but found the time restrictions too limiting.

Sheehy says he welcomes the change in legislation.

Contrary to the belief that infomercials cost at least $250,000 to produce, Stirling estimates the cost at anywhere from $40,000 to $100,000.

Stirling says broadcasters should remember that infomercials save them money because they do not have to buy programming to fill the space.

Vinet says that even though infomercials might reach more people during primetime, clients may be reluctant to take advantage of the opportunity because of the heavy cost of buying time during regular heavy viewing hours.

Even if the client wants to buy the time, there are no plans at Baton Broadcasting to adjust the primetime schedule to accommodate infomercials, says Joe Garwood, Baton’s chief executive officer and executive vice-president.

Garwood says infomercials are too narrow-casted for primetime.

No plans to relocate

He says Ford Motor Co. of Canada is currently running a full-motion infomercial in the 12:30 a.m. slot on ctv, and there are no plans to relocate it.

Although it has not raised many programming-related questions for Baton, Garwood says the crtc decision has prompted questions about the amount of advertising allowed during an hour of programming and how it is distributed.

Applications

‘What we probably will see are applications to the crtc to lift rulings limiting broadcasters to running 12 minutes of paid advertising per hour,’ he says.

‘If infomercials are going to be generally available to the marketplace, we’ll probably seek the same kind of flexibility, and act in the best interest of our viewers.’

Rodger Hone, vice-president, business development at CanWest Global Communications, is also skeptical of the amount of revenue infomercials are said to generate.

The Canadian Direct Marketing Association and the cab estimate Canadian advertisers are spending $100 million to $125 million to advertise infomercials on u.s. border stations.

‘Nobody I’ve talked to in the last day and a half, who’s involved in the sales and marketing of Canadian television, gives that figure any kind of credence,’ Hone says.

Agencies are in the process of working out a reasonable pricing structure for infomercials, says Bruce Baumann, director of media services for Saatchi & Saatchi Advertising.

Not feasible

Baumann says in the u.s., the demand for infomercial airtime during daytime hours has driven prices so high that it is not a feasible ad venue for companies with smaller budgets than the likes of Procter & Gamble.

He expects clients who have waited until full-motion is allowed will test the waters with infomercials over the next year.

Mary Falbo, executive vice-president, director of media, at Bates Canada, says broadcasters should be looking at giving advertisers proof of success in order to sell the infomercial format.

‘This could be a big selling tool,’ Falbo says. ‘The onus is on them to be a quality control arm, as opposed to strictly revenue-seeking.’

The crtc is planning to make decisions on home shopping services and video game services by the end of the year.

with files from David Chilton