Infomercials Thrive Amid Downturn

A downturn in the economy has provided a boom for infomercials. A.J. Khubani, president and CEO of the direct response company TeleBrands, says his company has seen that business booms in bad economic times. He attributes the success to lower TV ad rates.

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MICHELE NORRIS, Host:

Recession got you down? Has a lack of entertainment dollars made you a prisoner to cable television? Then, most likely you've heard the following pitches over and over and over again.

(SOUNDBITE OF TV COMMERCIALS)

U: Pedicures are expensive. With the Ped Egg, I save money, and my feet look and feel great.

U: Now, there is the Snuggie, the blanket that has sleeves.

U: ShamWow holds 20 times its weight in liquid. Look at this, it just does the work.

NORRIS: Any tub big or small, Mighty Putty repairs them all. Fill cracks and...

NORRIS: Now, maybe you've even cracked open your wallet and shelled out 10 bucks for the Ped Egg or 19.95 for the Snuggie, the ShamWow or the Mighty Putty, and maybe you felt better for it. If so, you're not alone. We spotted a story in the New Jersey Star Ledger noting that infomercials have migrated from late night to prime time, and their business is up, way up.

A.J. Khubani is president and CEO of TeleBrands. That's a direct response company. So, Mr. Khubani, the economy is down and the number of infomercials is up. Is that coincidence or a cunning move by all those companies that are trying to sell all those products?

NORRIS: TeleBrands has been in business for 25 years. And through all the economic up and down turns, we've seen a direct correlation between the economy and how well our business does. And that correlation is, the worse the economy is, the better the business is. And that is directly related to advertising rates, because when the economy is bad, less people advertise.

Take the car companies, for example. Automobile makers have cut their advertising budgets in half. They typically represent 40 percent of all TV advertising. They're now down to 20 percent. That leaves a lot of open TV time, and a big opportunity for infomercial companies. So we can go in now and buy prime-time spots where we could never get them before, at the price we used to pay for late-night spots. I like to say that we're getting beachfront property at trailer park prices.

NORRIS: (Laughing) Boy, you do sound like a happy man.

NORRIS: Yeah.

NORRIS: Now, I mean no disrespect in asking this question, but are you the advertisers of last resort?

NORRIS: Yes, we are. They call us the bottom feeders in advertising. We send our tapes out to all the stations and whatever unsold time they have, they stick our spots in and charge us a very low rate. Well, that amount of unsold time has gone up dramatically.

NORRIS: Now, do I sense a bit of opportunism in some of the products that are actually being pitched? The Ped Egg, for instance, shaves the calluses off the bottom of your feet, maybe saves you some money in terms of pedicures. The Snuggie maybe helps you cut down on heating costs. Are these products tailored for these times?

NORRIS: I can't say they were specifically designed for this time, because all of these products were developed way before we hit this huge economic downturn. You know, the Snuggie and the Ped Egg and the Pedi-Paws were on the drawing board way before this happened. But our products have always been geared towards saving people money. It's always a key part of the pitch. And they're fun. I think they are a mood enhancer.

Certain items do much better in a bad economy. Take lipstick sales, for example. It's a known fact that lipstick sales go up when there's a bad economy because they're inexpensive mood enhancers. And I see our products in very much the same light. They're inexpensive. For 10 or $20, they enhance your mood, they solve a common problem, and they save money. And that's another reason why the sales have gone up so dramatically.

NORRIS: Mr. Khubani, thanks so much for talking to us.

NORRIS: OK. You're welcome.

NORRIS: That's A.J. Khubani. He's the president and CEO of TeleBrands. That's a direct response marketing company.

BLOCK: You're listening to All Things Considered from NPR News.

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