Most stuff advertised on TV has a pretty large market. Everyone eats, and most eat at fast food places, so I can see why MacDonalds et al spend vast sums on advertising. After all those burgers and fries, a lot of people want to drop a few pounds, so Jenny Craig and Weightwatchers and Atkins advertise.
Some stuff advertised is stuff a lot of people might buy at a certain time of year. Daytime TV is practically one long Medicare Supplemental insurance ad from October on, for instance. Such ads are rare at other times of year.
But why do products/services that presumably have a small market advertise on TV?
Used to be there were a lot of ads for an outfit that would give you a lump sum of money in exchange for annuity payments. Are there really that many people that have annuities or other periodic payments and want to get a lump sum instead?
Or catheters. I see lots of commercials touting different catheters. I’m sure there are a number of people who need to use catheters, but are there enough to make it worthwhile to advertise on TV?
The one that really confuses me is Opdivo, a drug for people with “advanced lung cancer called squamous non-small cell, previously treated with platinum based therapy.” The American Cancer Society estimates something like 225,000 new cases of lung cancer in 2017. A lot of those won’t be squamous non-small cell, and of those that are many won’t be candidates for Opdivo. Plus, it’s not like you can go to your oncologist and say, “Give me some of that Opdivo.” Why do broad scale advertising for the drug, rather than more targeted advertising to oncologists?
I was also confused when I saw that ad the first time, so I looked up the drug. It’s crazy expensive, into the six figures just to start treatment IIRC, so they don’t necessarily need many sales to make the ad worthwhile. I imagine it’s also goodwill advertising for whatever big pharma company invented it.
It is the same way with all the examples given. They represent serious money even if they only apply to a fraction of a percent of the viewing audience or their families. You can sell potato chips all day long for low profit per unit or you can tell people that have had a specific defective hip implant that they can get some serious money (as long as they are willing to give the lawyers most of it). The end result is the same.
Not all advertising is that expensive either. Prime-time TV advertising on a national network is but that isn’t what most advertising is. You can also reach millions of people through much cheaper ads on things like broadcast shopping channels and radio. Even individuals can afford a decent number of informational ads that reach a broad audience. The cost still won’t be trivial but that doesn’t matter if even a few people generate more than that in profit.
If you have a small market, but that market is distributed over a wide area, it makes sense to use a mass communication device like television to advertise.
Also,mall but your last one are quite common, especially in certain markets. Annuities includes stuff like child support, which is pretty common. And needing to cath is pretty common in sick older people. I would guess they have a larger market by orders of magnitude than your last one, which works like everyone else says–they only need a small customer base.
Plus the production value on most of these ads is pretty minimal. Often just a screen of text with a voice-over (“Do you or someone you know have a structured annuity? Contact the law firms of…”) or a guy in an office speaking, etc. You could probably make twenty “contact the firm of…” ads for the cost of one Big Mac ad.
I wondered about this around a decade ago, when I heard an ad on the radio for a medium-range air defense missile. Granted, it was in the DC area, but the number of people they were actually trying to reach must have been tiny.
I forgot what channel it aired on but the advertiser rates for the cable TV wrestling show TNA were so abysmal that I heard multiple small time wrestling podcasts muse about going and buying an ad for their podcast on it. It was something like $200 for a single ad on a primetime cable network.
We get ads when the legislature is in session urging us to call our state legislators to support one bill or another. The intended audience is the legislators themselves. Even if we contacted all representatives in the broadcast area, it wouldn’t work, since essentially the ads are aimed at three people – the governor, the Assembly Speaker, and the Senate Majority Leader (NY cannot pass a law unless all three agree; The other lawmakers are supenumeraries).
It’s only local ads, but it’s overkill to aim them at those three. But if you convince them, you’re golden.
I don’t believe they are as common as you think.
Whether child support payments are actually annuities or not, companies like JG Wentworth won’t pay you cash in return for the right to get your child support payments. In general , companies purchase very reliable payment streams - they will pay you a lump sum now for annuities, structured settlements, lottery winnings, perhaps an inheritance that you have already inherited but will not be paid until you reach a certain age, etc. As a general rules, they don’t deal with payments that aren’t fixed ( child support can go up or down depending on parental incomes) or payments coming from an individual. Once you take child support out, I don’t think those other forms of payments are all that common.