Backchannelmedia

Gulfshore Business, June 1, 2005

Quiet on the Set

By Pete Bishop

From the outside, the yellow and white, Key West-style building with a tin roof and wraparound veranda looks like just another unit in one of the scores of small office centers scattered throughout Fort Myers. But inside, past an attractive but unpretentious lobby flanked by two modest offices, a tiered bank of television monitors, a long row of editing machines and walls lined with computer servers reveal the inner workings of Abbott Productions, a leading company in a $1 billion a year industry.

In this small space, Don Abbott, the company’s founder and president, and seven employees produce about 30 television commercials and at least 12 half-hour info-mercials each year. What’s more, Abbott Productions is a full-service video marketing firm, responsible for taking each project from concept through production, consumer testing and media placement.

“What separates us from everyone else in the industry is that we’ve always sold ourselves as a marketing company in the video business as opposed to a video company that’s into marketing,” says Abbott, 66. “We have a complete turnkey system, probably one of just three or so companies in the country that has total project management, from scripting and production to contact with focus groups. Right now, we’ve got a project that includes focus groups in five different cities.”

While Abbott counts companies like Eli Lilly and McDonald’s among thousands of former clients, he is best known as a forerunner in direct response, or infomercial, television production. In the last 20 years, infomercials have brought products like ThighMaster to late-night TV and phrases like “Stop the insanity!” (bellowed by buzz-cut blond and fitness guru Susan Powter) into the public lexicon. Direct response, which includes short spots that display 1-800 telephone numbers as well as half-hour infomercials, currently accounts for about $15 billion in U.S. product sales each year.

“There were two real pioneers in that field,” says Stuart Van Auken, Alico chairman and professor of marketing at Florida Gulf Coast University. “One was Ron Popeil and the other was Mr. Abbott.” Abbott and Popeil (known for hawking products like the Veg-O-Matic and the Pocket Fisherman), were the first to offer consumers a chance to buy a unique product, via telephone, as they watched it being demonstrated on television.

“They were precursors to infomercials, which are an interesting slice of our culture, something that shows our value orientation,” says Van Auken. “There’s something in the U.S. consumer that is predisposed toward gadgets and trinkets, things that are novel and depart from the norm. That’s what those early infomercials initially marketed, for the most part—products you couldn’t find in stores.

”By the time the long-form infomercial boom hit in the 1980s, Abbott was well prepared to profit from it. After a short career as an Indianapolis radio personality, Abbott opened his first production facility there in 1965. Early on, he frequently appeared in his own productions and regularly performed voiceovers. Today, he fills in when necessary.

A regular visitor to Sanibel, Abbott moved his company to nearby Fort Myers in 1981, taking advantage of Florida’s right-to-work laws and the wealth of sound studios and production talent located in the state. During some projects, Abbott Productions might hire 50 actors as well as extra camera operators, grips and other technicians.

In 1984, the Federal Communications Commission rescinded limits on the length of television commercials, making half-hour infomercials possible. Combined with the growth of cable television and America’s insatiable appetite for new products, the loosened restrictions made conditions ripe for entrepreneurs like Abbott. In a span of eight years, product sales generated by infomercials grew to $12 billion each year.

The boom attracted new talent to the format, from mainstream marketing pros and video producers to celebrity spokespersons like Victoria Principal, Dionne Warwick and George Hamilton. The industry also attracted its share of scoundrels wanting to cash in on the gold rush. Fraudulent products like baldness cures and diet patches resulted in lawsuits, FCC fines and bad press.

“In the Wild West days of the ’80s, cable networks didn’t know how to value their airtime,” says Michael Kokernak, an industry analyst and president of Backchannelmedia in Boston. “It was a fire sale, and basically any kind of product could make money. Now, airtime value is more established, plus there is a fragmentation of media that makes the industry much more data driven.”;

Today, a 30-second direct response commercial can cost a client $30,000, while half-hour shows range from $120,000 to $300,000, says Abbott. With so much money at stake, clients want results. The ability to measure results by tracking the number of 1-800 calls differentiates direct response from other areas of marketing and gives firms like Abbott Productions the ability to perfect its product.

“Once a show is on the air, we’ve got minute-to-minute response,” says Abbott. “Phone calls tell us where sales happen and don’t happen. There might be a spike in calls in six minutes, then at 11 or 12 minutes things start to go downhill. We can go back and look at the show and see what’s going on at that point. Maybe things got too complicated, or maybe the 800 number isn’t up or a personality was introduced that viewers don’t like. We can then tweak the show until we get a consistent response throughout.”

A database of response results also helps the company carefully choose the products it advertises, and where. Every commercial has a separate 1-800 number for each market it runs in, allowing the company to mine regional information about particular products. “We can tell you, for example, how cookbooks will sell at 9:30 a.m. in St. Louis,” says Abbott, noting that some other products just don’t sell on television, no matter how useful they seem.

“Some guy came in with an exerciser that you use in your car and he couldn’t understand why we didn’t want to sell it,” Abbott recalls. “You had to take your hand off the wheel and do this and that while you drive. It was just inviting wrecks.”

“Direct response commercials are only about 25 percent successful in general, but we’ve got a 92 to 93 percent success rate,” says Abbott. “The reason is, we turn people down.”

Currently, abbott productions produces a 50-50 mix of direct response and conventional commercials. Because the cable market is ex-panding so quickly, Abbott wants to phase out infomercials in the next five years. “The stations have found out that the time at 2 a.m. is worth something,” he explains, noting that while time slots are getting more expensive, reach is decreasing. “And by 2010, cable subscribers in major cities will have 500 channels to surf. But the positive side is all those channels will need programming.”

With that in mind, Abbott is fielding ideas for television programs his company can produce as pilots and sell to cable networks. One show already in development will put Abbott in front of a camera on a regular basis.

Come Fly with Me follows Abbott, an accomplished pilot, as he travels to aviation-friendly destinations like the Bahamas, Prince Edward Island and Lake Erie’s Put-in-Bay. The show, produced with the Discovery Channel in mind, has already taped one segment, and Abbott is gearing up for an Alaska trip that will result in three more.

The new direction has Abbott excited about the company’s future, though he says change is something he’s become accustomed to after 40 years in the video marketing production industry. “Variety drives this business,” he says. “You’re always looking for the next wave, the next phenomenon. We are always very open to change; it is welcome territory. In the next wave, people are going to need television shows.”