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The Federal Trade Commission has cracked down on a handful of infomercials for unsubstantiated claims, misrepresentation or outright fraud. One was the EuroTrym Diet Patch, an adhesive disk that attached to the skin and was supposed to curb the appetite. (It didn't.) The producer was slapped with a $1.5 million fine for making false claims for the device, as well as for two other products, Y-Bron, an impotence remedy, and Foliplexx, a treatment for baldness. At least six more infomercials are currently under investigation. "People are mesmerized by TV," says Barry Cutler, director of the FTC's Bureau of Consumer Protection. "They wouldn't give this stuff a second thought if they saw it on the back of some supermarket magazine. But they believe it because it's on television."
Infomercial producers admit there have been some abuses but claim the industry has cleaned up its act. Early pioneers of the genre "came mainly from print advertising," says Gene Silverman, vice president of Hawthorne Communications, a leading producer of infomercials. "They brought their over- the-line methods with them." The industry has since formed a trade organization and fashioned its own content guidelines, similar to those proposed by government regulators. Among them: the programs must be clearly labeled as commercials, and product claims must be carefully substantiated.
The recession has reduced the viewer response rate for some infomercials, but at the same time it has made the lengthy commercials even more attractive to stations: when ad revenues are slack, it is hard to turn down an advertiser who wants to purchase a big chunk of time. "The more financially pressed stations are, the less they're offended by infomercials," says Rader Hayes, a consumer economist at the University of Wisconsin. In a survey released in January by the National Association of Television Program Executives, 90% of station officials who responded said they have run at least some infomercials, and 49% said their use of them is likely to grow in the future.
Infomercials may be on the verge of going big time. Several major companies are experimenting with the format. General Motors, for example, recently introduced an infomercial to tout its new line of Saturn cars. AT&T is reportedly exploring the format as well. (Time-Life Music currently runs pitches for collections of hits from the Big Band era and the rock-'n'-roll years.) They will never supplant The Simpsons or Entertainment Tonight, but in fringe time periods, infomercials could become Madison Avenue's next hot format. Half an hour with the Ziploc finger: now that would be amazing!