We are asked that quite often. Our quick answer is usually, “Well that is almost like asking: How high is up?” There are so many variables that it is really difficult to answer that question. However it may be helpful to look at the ranges of production costs first, then the other costs involved in implementing a successful direct response campaign.
The average costs nationally to produce a long-form show (28.5 minutes) are $136,250 to $758,700, not including talent fees. Production costs for a short- form show (:30 seconds to two minutes) nationally are $34,760 to $332,810. Again, those costs don’t include talent fees. Briefly, some of the other key variables are: producing on film or video, shooting on location or sound stages, designing and building a set, number of shoot days, travel and crew size. Careful and detailed analysis of the product, the target market and the short term and long-range goals for the campaign will dictate many of these elements and ways to save on production costs.
Another expense to be aware of in planning your budget is the on-air media test. We generally recommend (depending on the time of year) a national two week test of $7,500 per week for short-form and about $25,000 per week for a national long form test. Local tests, which can be less expensive, are also less accurate. That is a concern if the objective is to see if the show can be ramped-up nationally. Also, you will need to budget for set-up fees for the call center, fulfillment house and credit card processing function as well.
Although everyone hopes they can do an infomercial that’s cheap, fast, and high quality, our experience is that you can only have two out of these three desires. So, how can you save money on infomercial production? Again, a careful look at the many variables in the production (keeping in mind the critical elements for success and your objectives) may identify areas to save money without compromising the success of the show. Because talent fees can substantially add to the cost of an infomercial, consider carefully whether your product actually requires a high profile and high cost celebrity spokesperson, before spending that money where it may not be necessary.
Profit sharing, or an equity position, with a production company is sometimes a possible way to save up-front costs, when a company is willing to discount their fees. We always advise including your attorney in any partnering agreements.
Launching a direct response (infomercial) campaign involves a substantial investment and requires detailed planning. But as we all have seen over the years, the right product, presented and managed properly, can be very successful. Care should be taken to run a complete product marketing analysis and detailed financial metrics before investing time and money in an infomercial campaign.
