DR Glossary
make-good
An infomercial telecast provided by the station or network, often at reduced or no cost, to compensate for a station mistake or poor results from a previous media purchase.
manufacturer
Company that manufactures DRTV products in quantities large enough to meet infomercial demand.
margin
See gross profit margin.
mark-up
A ratio (3-to-1, 5-to-1) derived by dividing a product’s retail price by its cost of goods (COG). A product costing $20 to manufacture and package that retails for $100 has a mark-up of 5-to-1. Because of rising media costs, the benchmark product mark-up for infomercial products has increased from 3-to-1 in 1984 to 5-to-1 today.
market
For television advertisers, a distinct geographic area surrounding a city or cities that is the area of dominant influence for the city’s broadcast TV stations. See “area of dominant influence.”
mass rally format
Infomercial program format that mirrors a mass rally. Often shot in large auditoriums with an enthusiastic audience of thousands. Herbalife was the first to successfully use this format in 1984, where Herbalife’s top sales people and top dieters would preach the gospel on stage in front of the throng.
master
The original, final edit version of a completed infomercial.
media
The airtime that a cable network or broadcast station has available to sell for commercial insertion.
media agency
An infomercial agency that provides only media buying and analysis services.
media analysis
The time-consuming task of reviewing the profitability of each infomercial telecast to determine whether to buy the specific time slot again or to cancel. Also, to review all telecasts in aggregate to determine trends, strengths, weaknesses, and to enhance predictability.
media buy
Usually refers to the amount paid for one or more time slots/spots over a period of time. “The client’s media buy for the month of September was $1,847,372.”
media buyer
DRTV agency that handles media buying and tracks results. Also, the individual who personally negotiates and purchases media time.
media cost
The price paid for a specific time slot or “flight” (group) of spots on cable and broadcast stations.
media efficiency ratio (MER)
The number that is a snapshot of an infomercial’s overall success or failure. The ratio is derived by dividing total sales (resulting from a particular telecast or telecasts) by the media cost. For example, if you buy a half hour of $1,000 and generate $3,000 in sales, the MER is 3.
(Sales/Media Cost = MER)
media time
Any time on a TV station or cable network available for programming or commercials.
MER
See media efficiency ratio.
merchant account
Agreement between a company selling a product and the credit card company responsible for collecting the sale. Marketers have merchant accounts with Visa, Master Card, Discover, AMEX, etc. Companies new to direct marketing often have a difficult time getting merchant accounts because of the risks in long distance credit card transactions.
merchant account discount fee
The percentage of every dollar that the credit card companies charge the marketer for financing their credit card transactions. Typical fees range from 2 percent to 4 percent.
merchant account vendor
Credit card vendors hired by infomercial/DRTV agencies or DRTV marketers to authorize and process DRTV credit card transactions for a fee. New infomercial projects are closely scrutinized by merchant bankers because of the risk involved in long-distance credit card transactions.
minimercial
A DRTV commercial longer than two minutes but less than ten.
mock-up
The creation of preliminary product packaging (brochures, video cassette boxes, product labels, and boxes) for the purposes of filming/taping to meet production deadlines.
Often a new product creative will be scheduled for completion before product package manufacturing has been completed. The product beauty shots are therefore filmed with mock-ups.
money back guarantee (MBG)
The promise a marketer gives a consumer to refund all or part of the purchase price within a given time period, typically 30 days.
money shot
The one scene in a DRTV commercial that “says it all” and excites viewers to call. For example, the Ginsu knife cutting through a can, then slicing through a tomato like butter.
MSO
See multiple system operator.
multiple payments
: Offer technique of breaking the retail price into smaller amounts to be paid in monthly installments via credit card or advertiser-sponsored financing. “Pay in three easy installments of only $24.95.” First tested in 1989 and now common, multiple payments can boost response by as much as 25 percent. If the product price if $100 or less, the percentage of purchasers opting for multiple payments can be as low as 25 percent. Percentage increases as total retail price rises. Soloflex holds the record for most installments: “39 payments of $39.”
multiple product offer
Technique of offering two, three, or more products in the same infomercial. The varying products can be in the same product category (single shows devoted to dolls, video tapes, kitchen appliances) or different categories (single show showcasing a tool, automotive, kitchen, and self-help products). The latter format has never proven profitable for a non-retail-driving infomercial. A risky venture, it gives a prospective buyer too much to think about resulting in no buying decision.
multiple system operator (MSO)
A corporation that owns and operates multiple local cable franchises.