Some early infomercials prompted legal action by the Federal Trade Commission. The FTC acted against a sales program for sunglasses, for example, that presented itself as an independent, investigative consumer program and also took action against a major distributor of infomercials.
Infomercial producers have used a variety of program formats—including talk show, newsmagazine, documentary and even faux investigative consumer report—to sell their products. In some cases, they have even inserted "commercial breaks" within the programs to enhance the illusion that the infomercials were regularly scheduled programs.
Some insidious examples employed the conventional trappings of newscasts to make viewers think they were watching bona fide news. These frequently involved questionable products and pitches, alleging support from tests, reports or surveys, demonstrations and mock-ups of product usage and celebrity and consumer endorsements.
Often the goods and services advertised in those infomercials had the potential for consumer abuse, among them ads for psychic services and hotlines, personal wealth and financial investment plans, weight-loss plans, hair-loss remedies, anti-aging products and schemes for avoiding the payment of taxes.
The half-hour infomercial "Consumer Challenge," for example, produced by the seller of MDR fitness tablets, which also bought the time in which to run the show, began with an announcer proclaiming that the show's two "investigative reporters" would determine for "you, the consumer" whether this product was genuine or a "consumer rip-off."
Another infomercial for a hair-loss program was presented as a live, investigative program hosted by a major TV star. He presented questions to and appeared to interact with the advertiser's paid experts, whose side of the conversation had actually been taped in advance.
In the 1960s, the Federal Communications Commission and the National Association of Broadcasters set limits on the number of commercial minutes allowed per hour of programming, requiring that all commercials be clearly identified as such. Those restrictions barred anything akin to the infomercials of today. Such programs as "Great Moments in Music" and "100 Paintings," essentially 15-minute commercials in the guise of cultural programs, were forced off the air in 1973 following action by the FCC.
Those restrictions, however, did not affect cable TV systems, which provided an outlet for program-length commercials through the 1970s and '80s. The number of outlets for these programs grew as did cable, and cable networks were not required to label such programs as advertising.
In 1979, the Justice Department sued the NAB on antitrust grounds, asserting that limits on the number of commercial minutes per hour artificially restricted the availability of airtime and inflated prices. Following some adverse preliminary rulings, the NAB dropped its code in 1982. Infomercials returned to broadcast TV in 1984 after the FCC, following a philosophy of deregulation that characterized the administration of U.S.
President Ronald Reagan, lifted its restrictions on the amount of commercial time permitted during the broadcast day.
At the end of the 20th century, the only remaining FCC controls on infomercials required TV stations to clearly identify them as advertising. Such identification is not always built into the programs, however and the FCC has cited some stations for failure to properly identify such programming.
The reporting of violations is largely up to the viewing public, as the agency lacks sufficient resources to monitor such practices. Nonetheless, the FCC has stated that "existing statutory requirement(s) for identification of sponsored material, along with other requirements of law pertaining to false, deceptive or misleading advertising should, in our view, be sufficient to assure that the public is informed when it is viewing paid-for broadcast matter."
There is a significant economic incentive to create infomercials: They are inexpensive to produce and returns can be quite high for various related direct-mail efforts. Response rates run about five per 1,000 viewers, or up to 20 per 1,000 viewers if a bonus is offered, and revenue can run to three times the media cost.
There is also considerable incentive for various broadcast stations and cable networks to run infomercials. Since station operators do not pay for the program material, infomercials can generate up to 400% more revenue than buying and airing syndicated reruns that carry traditional, 30-second spots.
Local affiliate and independent broadcast stations consider this an economic benefit. In addition, infomercials are time-fillers; they provide programming to fill scheduling gaps or allow new cable networks to round out a 24-hour schedule without incurring their own programming costs.
On the other hand, infomercials have been viewed as audience killers, providing an undesirable downturn in ratings and reducing the lead-in audience for programs that follow the infomercial.
Infomercials first appeared during low-cost, readily available time periods—late at night and during weekends on cable TV networks and independent TV stations. But as their numbers grew, infomercials began to occupy other time slots; they now appear at all times of day, on all types of cable networks or broadcast stations, including those owned and operated by the major networks.
By the turn of the 21st century, infomercials were increasingly gaining acceptance. Many advertisers are turning to the infomercial format when long explanations are needed to communicate basic sales points or product benefits. Local real estate companies, for example, produce video tours of properties that are for sale, and marketers of exercise equipment take advantage of lengthy commercials to provide detailed demonstration of their products.
Some "mainstream" advertisers, such as Apple Computers and Magnavox, have used infomercials to introduce new products or innovations. The most common users of infomercials, however, are mail-order sales companies with new products to demonstrate or investment plans to explain; psychics and sellers of exercise machines or programs also remain among the most prominent users of the infomercial format.