Digital Profits - Eastman Kodak Co.'s successful infomercial

Brandweek, June 29, 1998

A Case Study of Kodak's Infomercial

In 1997 Eastman Kodak decided to go forward with a 30-minute infomercial promoting their new DC21O Digital Zoom Camera. The company had invested $500 million in digital imaging development with little to show for it.

What is so interesting about this specific case study is that it is one of the few times a major brand name has put in the effort and taken the time to track the effect their infomercial had on retail sales.

The Cost of Success

The Kodak infomercial cost approximately $400,000 to create and produce. The initial media test expenditure was budgeted at $60,000.

Once test results were determined, the primary rollout was budgeted at $750,000. Further rollout budgets were estimated at an additional $500,000.

Retail or Direct?

Originally, the call to action sent consumers to the local retail outlet offering the camera. Not wanting to alienate their retailers, they did not put any direct sale information on the actual program. Instead, they allowed for a direct sale through their telemarketing script. The sale was then sourced through the local retailer.

Why the Consumers Called In

Consumers who called the 800 number and asked for a gift pack received $175 worth of discount coupons, good toward the camera and other Kodak products at retail, and a software package for viewing the digital photos.

It was determined that 12% of all qualified callers receiving the Kodak gift pack actually ordered or purchased the camera at a retail outlet.

The Real Quantifiable Results!

The test results were very strong. On the initial media-test expenditure of $60,000 they received 3.527 calls representing 2,912 qualified leads. The return on investment hit a very healthy 3.93%. The approximate income realized was more than $245,000 (against the media investment of $60,000).

Additionally, 32 cameras were sold directly via the infomercial even though the offer was not present in the actual 30 minute show. The retail price of the camera is $899.00, bringing in an additional $28,768.

Retail Sales Increase

Information from Kodak officials indicates that retail sales in cities where the infomercial was tested increased by an average of 80% versus the retail sales in non-test cities. It was also determined that the consumer selling time needed within the retail locations was reduced by a substantial percentage, since the infomercial pre-sold the camera before the consumer walked into the retail location.

The local retailers involved in the test were quite satisfied. Many chose to run the infomercial in their stores.

The markets the infomercial was chosen to air in was based upon markets that had retailers with large supplies of the camera. In addition, retailers were chosen based on their outstanding relationship with Kodak.

The Rollout

The rollout brought more success. Entering the national arena with network cable caused the actual return on investment to drop to 2.9%. Lower, but still considered a success.

Sales continued to be strong at the local retailers. The infomercials call to action was altered to include the option of buying directly. This increased the number of direct sales by phone.

It was discovered that outside of cable networks. the show performed better on high-profile broadcast stations such as network owned and operated stations.