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Direct Response Marketing

Field Reports

1 Nov, 2004 Response


While earnings from search ads demonstrate continuous growth, the revenues from E-mail marketing is down 29 percent to $47 million. Many attribute the stunted sales to spam, saying that Internet users delete the legitimate ads along with the spam ads.



FTC Buckles Down on 'Ab Force' Belt

WASHINGTON — TELEBrands Corp., the maker of the "Ab Force" belt, was ordered in mid-September to stop making false advertising claims about the product.

The "Ab Force" is an electronic belt that is said to stimulate the abdominal muscles and provide a full workout—no exercise required. The ads promise weight loss and fat loss, plus firm and sculpted muscles simply by wearing the belt and nothing more.

Chief Administrative Judge Stephen J. McGuire upheld the Federal Trade Commission's (FTC) complaint against TELEBrands, its TV Savings LLC affiliate and A.J. Khubani for deceptive advertising.

However, the company did win one victory against the Commission. McGuire decided to rule out FTC charges that TELEBrands misled consumers by "importing" claims from competing products.

Khubani called this decision, "a victory for all marketers who believe that free competition benefits the consumer and the economy." He said, "A decision in favor of the FTC under this theory would have had far reaching consequences for all marketers of consumer products."

This is TELEBrands' fifth run-in with the FTC since 1990. It was charged with deceptive advertising for a variety of products ranging from static-free dusters to hearing aids.

In 2003, the FTC filed a complaint stating that the infomercials, which showed "well-muscled, bare-chested men and lean, shapely women" wearing the ab belts falsely claimed that customers could achieve these same results without any exercise.

Khubani says he settled these claims because it made economic sense.

"As a practical matter, it was more economical to reach agreement with the FTC in such situations rather than spend the time and money involved with a trial," Khubani said.

Greg Renker Wins Lifetime Achievement Award

LAS VEGAS — The Electronic Retailing Association's (ERA) Awards Gala Sept. 27 was a night of glitz and glamour befitting the dazzling career of Greg Renker, who was honored with the "Lifetime Achievement Award." The event, which honors the best of the best in direct response, was part of the 14th Annual ERA Conference and Exhibition.
"It’s gratifying to be recognized for our growth, development and acceptance within the rapidly growing direct response industry."
— Greg Renker
"It’s gratifying to be recognized for our growth, development and acceptance within the rapidly growing direct response industry." — Greg Renker

The tribute to Renker was apropos considering that the direct response industry was also saluting 20 years of success and staying power.

Renker has established himself as a permanent fixture in the direct response industry through his billion-dollar corporation Guthy-Renker. The name is synonymous with successful marketing and business ventures.

He is a founding principal of Guthy-Renker, one of the world's most renowned electronic retailing powerhouses that was cultivated from a mere infomercial studio. He started it with partner Bill Guthy, who steers the company's overall direction.

Today it is one of the most successful and well-respected, TV-driven companies with sales exceeding $1 billion and an average annual growth rate of 33 percent during the past 10 years. Renker oversees productions, new business development and business affairs.

"I am extremely honored to have been chosen for this award," Renker said. "More importantly, it's gratifying to be recognized for our growth, development and acceptance within the rapidly growing direct response industry."

Guthy-Renker was established in Palm Desert, Calif., in 1988. For the past 15 years, it has developed infomercials for some of the most successful products in direct response including, Personal Power, Principal Secret, Proactiv Solution, the Power Rider and Winsor Pilates.

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