GENERAL INDUSTRY TERMS

 

 

AD AGENCY: A company which charges a fee or commission for certain infomercial services they provide, such as marketing strategies, product assessments, creative services, various production services, the planning of purchasing and analysis of media, and back end management.

 

ADJACENCY: A commercial spot time which is bought around the same time as a particular program airs, because it targets the advertiser's customers. As an example, if Valerie Bertonelli was appearing on the Tonight Show, the media agency might buy an 'adjacency' for Weight Watchers during the show, right before, or right after the show.

 

AFFILIATE: - A broadcast television station that is paid for airing locally telecasted national programming for major networks like CBS, ABC, Fox, NBC, Warner and Paramount.

AIRING: The specific time slot that an infomercial will be broadcast.

 

AIRTIME: The periods of time that a network or broadcast station will make available for infomercials.

BACK END: Refers to a product transaction which takes place after the original direct-over TV sale which is generated by an infomercial or short form DRTV spot. Up to 50% of all DRTV product sales can be a result of back end sales. Supplementary sales of DRTV and related products can be made from up-sales or inbound telemarketing, as well as direct mail sales and outbound telemarketing, and club programs, catalogs and continuity sales. Back-end sales can be accounted for anywhere from 50 to 90% of product sales. A retail sale is not generally considered a back-end sale.

BILL OF MATERIALS: A document that functions as the master control in the process of assembling components for inclusion in a kit or finished product.

 

BONUS: This is an additional product or service, considered to be attractive, which is added to the main infomercial product.

 

CALL CENTER: A DRTV call center is a facility that answers inbound, or places outbound telephone calls. Call centers, also known as contact centers or customer care centers, use sophisticated software to provide a full range of services.

 

CALL TO ACTION: A commercial within an infomercial "show." Several are spaced throughout the production to display price and/or installment payment terms, special "act now" promotional incentives and ordering information, all usually couched in an air of urgency to stimulate immediate response.

 

"CALL NOW" MOTIVATORS: Specific incentives such as premiums, discounts, bonuses, and sweepstakes which are offered as a bonus to go along with a main product to encourage viewers to call and place an order immediately.

 

CHARGEBACK: This refers to an investigation by an issuing bank into a disputed credit card charge, at the request of the cardholder.

 

CONTINUING MEDIA: This is a particular infomercial media time slot which continuously produces profitable results for a number of weeks and as a result are rebooked continually.

 

CONTINUITY:  The process of automatically shipping product at a given interval to customers who elect to sign up for auto reshipments.

 

CONTINUITY PROGRAM: A direct response offer involving systematically scheduled purchases over time of a set of products or of product replenishments.  Also known as Auto-Ship.

 

CROSS SELL: Suggesting to a direct response customer the purchase of an additional product or service that may not necessarily relate to the original product purchased but which represents an attractive and/or limited time value.

 

DAYPART: this refers to the variety of multiple hour segments within a the 24 hours of television's broadcast day. Dayparts segments are typically:

• 6 am to 9 am early morning

• 9 am to 12 noon morning

• 12 noon to 4 pm daytime

• 4 pm to 6 pm early fringe

• 6 pm to 7 pm early news

• 7 pm to 8 pm prime access

• 8 pm to 11 pm prime

• 11 pm to 11:30 pm late news

• 11:30 pm to 1 am late fringe

• 1 am to 6 am late night

 

DIRECT RESPONSE(DR): This is a method of marketing and sales, also known as DR, which bypasses traditional retail stores and presents a product for sale directly to the consumer. Common direct response venues are television, mail order, newspaper and magazine, catalogue, telephone, electronic kiosks, CD ROM, internet and carnival pitch men.

 

DOCUMERCIAL: This is an infomercial programming format that utilizes production and creative techniques originally used in traditional documentaries. This includes an on-camera spokesperson, multiple location shooting, interviews which are live or taped, voice-over narration, and real people features which are edited into a continuously flowing half hour. The format, which is based on actuality, mirrors that of television news shows like '20/20' or '60 Minutes, and there are not elements of fiction presented in this format unless specified as 'dramatizations'.

 

DRAG: This refers to orders from DRTV which are placed well after a commercial telecast. The majority of infomercial orders (typically 75 to 95%) are placed within the first hour of an infomercial telecast. Any orders placed over the next week are referred to as drag orders.

 

DRMA:  The Direct Response Marketing Alliance that uses a combination of education and networking to foster clear channels of communication and transparent pathways to nurture long term relationships in a comfortable and neutral environment.

 

DROP SHIPPING: Typically employed by TV shopping channels. The channel may stipulate that featured merchandise be stored and distributed at designated fulfillment facilities across the country that have been inspected and monitored and found to be highly qualified. Alternatively, the channel might simply require that the featured goods be on hand at the channel's central warehouse prior to airtime.

 

DRTV: DRTV means Direct Response Television. DRTV is based on using TV infomercials or spots to permit or encourage consumers to directly respond to the advertiser.

 

EDI: An acronym for Electronic Data Interchange, a method of trading documents such as orders, invoices and delivery schedules, by electronic means from one corporate system to another, rather than in paper form.

 

EFFECTIVE FREQUENCY : An estimated amount of times a person must see a particular brand awareness commercial on a product in order to change that person's attitude and awareness about that product.

 

ERA: The Electronic Retailing Association, "the trade organization for the direct response marketplace."

 

FEDERAL COMMUNICATION COMMISSION(F.C.C.): This is the governing body which is responsible for overseeing all electronic communications which includes TV.

 

FEDERAL TRADE COMMISSION(F.T.C.): This is the governing body that is responsible for commercial advertising as well as trade practices in the U.S.

 

FORMAT: This is the basic creative concept of an infomercials' overall structure.

 

FULFILLMENT: This refers to the functions involved in an infomercial campaign, from the warehousing, labeling, packaging, shipping and tracking of a product. Often fulfillment functions are subcontracted to 'fulfillment houses' that specialize in this business. Some offer their clients inbound phone customer service and merchant account services.

 

GROSS MEDIA BILLINGS: This refers to the media costs which broadcast or cable companies charge for short form or infomercials. The cost is determined by referring to the standard 15% media agency fee. 

 

INFOMERCIAL: A 30-minute TV program the object of which is to motivate the viewer to respond directly by purchasing the featured product or service.

 

IMS: Infomercial Monitoring Service, Inc. A media service that reports the number and volume of direct response programs aired on networks monitored and issues weekly reports ranking the leaders.

 

IVR: Interactive Voice Response.  This is a computer generated voice activated telemarketing process in which the script is programmed in advance and the callers are taken through the order process via a series of prompts.

 

JORDAN WHITNEY: Publishers of the Direct Response Marketing Report "Greensheet," showing the top ten infomercials and direct response spots based on confidential media budgets and weekly monitoring of national cable and broadcast markets.

 

KITTING: aka contract packaging. The physical task of collecting and assembling materials that serve as components of an assembled presentation, product or package.

 

KNOCK-OFF: This refers to a product that is very similar to another product that had recent infomercial success. Some popular knock-off items have been juicers, mops, steppers, dehydrators and teeth whiteners.

 

LIVE AGENT:  Generally referred to as a Live Person that handles the inbound telemarketing calls.

 

LOGISTICS MANAGEMENT: Negotiating with carriers and organizing packaging and shipping so that freight costs are minimized.

 

LONG FORM: A 30-minute infomercial. One of the two basic formats for direct response TV advertising.

 

MARKET: This is a distinct geographic area which is surrounding a major city or cities which is determined to be an area of dominant influence for that city's television stations.

 

MASTER: This is the finished edited version of a completed infomercial.

 

MASTER DUB: This is the dub of a master infomercial version with a particular 800 number edited in, and other dubs with the same 800 number will get sent to different market TV stations.

 

MEDIA BUY: The TV or radio time, or print space, purchased to communicate an offer to potential customers.

 

MERCHANT ACCOUNT: An account at a bank that allows a direct marketer to accept payment in the form of credit cards.

 

MULTIPLE PAYMENTS: This is a sales offer technique which breaks down the retail price of a product into smaller amounts which can be paid in installments with the use of a credit card or with advertiser sponsored financing. "Pay three installments of $24.95" 
This technique was first used in 1989 and is now commonplace in infomercials. Multiple payment options can boost product sales by as much as 25% if a product price is $100 or less, then the amount of customers choosing to use multiple payments may be low, but the percentages increase as the total retail price increases.

 

NET MEDIA BILLINGS: This is the total media costs that are charged by a cable company or broadcast station to its advertisers for infomercial broadcasts. This includes media agency fees but does not include service fees or media funding.

 

PREMIUM: This refers to a product or a service which is added on to the main product in order to enhance the main order's value, like a bonus.

 

PRODUCTION: This refers to the actual process of filming or videotaping a DRTV script.

 

PAYMENT PROCESSING: A system that enables secure, real time processing of online credit and debit card transactions, including authentication and verification.

 

RATING: This is the calculated percentage of people or homes that watch a particular television program, which is based on the total population of homes with televisions, regardless of whether they are watching TV or not. The calculation is Rating = HUT x Share.

 

RESPONSE: This refers to the results of an infomercial telecast.

 

RETURNS: This is the number of items, the dollar amount or the calculated percentage of total sales returned to the direct marketer in order to get a refund.

 

REVERSE LOGISTICS: The process of handling returns so that the returned product is inspected and then either returned to stock or recycled, following which the customer is provided with a prompt refund.

 

ROLL-IN: This refers to a video segment (anywhere from 30 seconds to 3 minutes long) that has been pre-taped and then played back and put into an airing of a live telecast.

 

ROLL-OUT: This is when an infomercial has been deemed a success and is ready for regional or national distribution. A roll-out can result in the purchase of $2 million worth of media each month, having telecasts in almost all of the 211 markets.

 

SAVE-THE-SALE: A call center function wherein the agent attempts to deal with a complaint in such a way as to reassure the customer and avoid the return of the product.

 

SELLING CYCLE : This is a cycle of information that gives details of the product information. It's typically put into one of three pods and replayed throughout the infomercial, but rearranged in a different manner. Each selling cycle lists the features of a product, the benefits, the credibility, the guarantee, the offer, the substantiation and the call to action.

 

SETTLEMENT: This is when all necessary funds are transferred so a merchant who is involved in a credit card transaction gets paid for goods or services.

 

SHORT FORM: A direct response TV format utilizing one or two-minute commercials.

 

SKU: Stock Keeping Unit. A unique, numerical description assigned to every manifestation of a product. A single style of shirt, for example may have several SKUs reflecting differing sizes, colors or materials, etc.

 

SPOKESPERSON: A central figure in an infomercial or spot, usually a celebrity, athlete or original developer of the featured product. Spokespersons lend credibility and provide reassurance of quality by virtue of their charisma and reputation.

 

SWEEPS: This refers to the 4 week period which is held 4 times a year by Nielsen who measures viewership levels and a demographic breakdown of all TV stations in the U.S.

 

SYNDICATION: This refers to a non-network production of an independent program which is distributed cable networks and local broadcast stations, where airtime is paid for with cash or by bartering commercial time.

 

TEST MEDIA: This refers to a new time slot for an infomercial or a time slot that hasn't been used by the infomercial in the last 4 weeks.

 

TESTING: Running infomercials or spots on a limited basis prior to national rollout to evaluate the appeal of the product, the offer, the show content or the media strategy.

 

TRANSACTION FEE: This is a pre-determined customary charge that is put on every person's credit card transaction by the merchant's I.S.O. or account provider when they pay for an infomercial product with a credit card.

 

UPSELL: Suggesting to the purchaser of a direct response product that he could add to his original purchase in some value-enhancing way, such as with a useful accessory or a deluxe, more fully-featured model.

 

WIDE ROTATION: This refers to a booking which does not specify a specific part of the day, let alone the exact hour or minute a commercial will air. Short form direct response media is typically bought on a wide rotation basis so that a broadcaster can slot it in wherever an empty spot appears. Wide rotation is much cheaper.