The queen of infomercials; Katie Williams has parlayed media-buying for program-length TV commercials into a boom business.

The queen of infomercials

It is sometimes said that success in business requires one good idea, with good execution. If true, Katie Williams, president of Williams Television Time Inc. in Santa Monica, is a classic living example of the adage.

Four years ago, Williams had a good idea - establish a media buying service that specializes in 30-minute blocks for "infomercials," or program-length commercials. Infomercials were in their infancy then and Williams, who had worked for three years as a media buyer, felt the industry had a lot of potential.

She didn't have money, but she didn't let that stop her. She borrowed $2,000 from her parents, plus a little more on her credit cards, and started her own business out of her home.

Today Williams' Television Time has more than $30 million in annual billings, buying more infomercial time than any independent agency in the nation. Profits are about $1.25 million per year, and Williams is widely respected in the infomercial industry as a courageous entrepreneur whose business will continue to grow.

"Katie Williams has become the largest and most successful (infomercial media buyer) in the country," says Greg Renker, president of Palm Desert-based Guthy-Renker Corp., an infomercial producer that doesn't currently contract with Williams. "She's Madison Avenue. She's very good."

Although she had high hopes for her idea, Williams says she had "no idea it was going to turn into anything this big" when she started out in 1987, at the young age of 30.

Since her 1984 graduation from Cornell University, she had worked buying media and training other buyers for real estate infomercial king Ed Beckley, mail order marketer Joe Cossman and a home shopping company.

"I was just sort of burned out on the concept of working for someone else whom I didn't know if I could trust," she recalls. "I decided to freelance."

She picked infomercials because she felt they had been labeled "the black sheep of the advertising world" by most agencies, despite the promising nature of direct response commercials.

"It may not have the beauty of an Infiniti commercial, but it sells the product," she says.

The first few months were tough. Williams had two clients, and one of them decided to pull all his spots. Rather than sacrifice the time, Williams started making calls and found two other companies willing to pick it up. It was then she began to realize the full potential of her business, she says.

In the first year, Williams says she hired 10 people and bought computers. The company was profitable almost immediately, she says. Today she employs more than 50 people.

"We were in the right place at the right time. Infomercials were taking off," says Williams. "We try to (grow) slowly and carefully. We have no debt, which is great."

As if her success really did catch her by surprise, Williams still does not look like the Madison Avenue-type executive described by her peers. She is a small, youthful woman, who pulls her shoulder-length hair from her face simply, wears very little make-up, speaks in an unaffected manner and works out of a small, tasteful office in the middle of a construction zone.

This is all despite the fact that she pays herself a six-figure salary and, as sole owner of Williams Television Time, has made more than $1 million per year in profits for the past two years.

Her profits have plateaued for the past two years, even though revenues have almost doubled, because of growth expenses, she said.

"We grew so fast that we didn't have the people in place to take care of everything," says Williams.

She gets a sort of "high" from making a good buy and watching a client make money.

"I work a lot of hours, 65 or 70 hours a week, but I love it. I've always been driven. I don't accept mediocrity," she says. "To me, there's a thrill in looking at the numbers and getting them to work."

This year, she projects $50 million in billings and plans on $100 million in 1992. Her goal is to be the biggest company among all direct response media agencies in the country, based on billings.

Direct response basically includes any commercial with a 1-800 or 1-900 phone number in it - print, direct mail, radio and television, from 30-second spots to infomercial length; Williams was ranked 27th in the country in this category for 1990 by Advertising Age magazine, up from 36th in 1989. Bowes Dentsu & Partners in Los Angeles was the only local firm to rank higher (12th).

Williams is opening a marketing subsidiary that will assist clients with production and legal services, she says.

"I feel the potential for the infomercial industry has just barely been scratched," says Williams.

She notes that many stations owned and operated by major networks, which once shunned infomercials, have changed their policies and are selling time for program-length commercials.

Renker, who is a little less optimistic about his industry's chances for continued growth, says infomercial buying services are important because they are able to "move quickly" to adjust to consumer response. This is crucial in the volatile infomercial business, especially today when profit margins are shrinking, he says, adding that Williams is very adept at this.

Still, he points out that one of Williams' clients, Quantum Marketing, recently filed for Chapter 11 bankruptcy protection from creditors, and another big infomercial company went out of business in the past month. Meanwhile, there have been rumors of layoffs at other media buying agencies. The recession has been quite tough on his industry, he says.

"In the last several weeks, the infomercial industry is beginning to see signs of life. It will only grow again if consumer confidence goes back up," Renker says. "The growth will be less explosive, but more intensive."

He explains that in the late 1980s, infomercial makers were gobbling up time right and left, and the more they bought, the more money they made. Today, he says, they have to be more selective, and only the savvy will survive. Williams agrees.

She makes money off standard advertising agency commissions, which result when the media sell blocks of time to an agency at a discount, and then the agency charges the client the "retail" price. But Williams says her agency keeps customers not only by buying in bulk and knowing what to buy, but by reacting quickly.

"It's extremely complicated to do this on your own. . . . In this business, hundreds of thousands of dollars change hands without a written contract," she says. "You have to watch it, pull it out if a time slot isn't working. It takes a lot more sophistication to get something to work."

One of the newest attempts at sophistication are "documercials" - documentary-style programs that inform viewers about a product or company. David Verklin, senior vice president/corporate media director at the San Francisco-based advertising agency Hal Riney & Partners, is in the forefront of this industry, having designed a documercial called "Spring in Spring Hill" on General Motor's Saturn car.

He purchased media time at programming prices, rather than advertising rates, some of it in prime time. He turned down a proposal from Williams because he felt this type of buy was out of her field; documercials are not a direct-response vehicle. But he said he expects infomercials to grow faster in the short term than documercials, and he has "great respect" for Williams.

"I think Katie's going to do great. She's booming," says Verklin. "Documercials will not supplant and replace infomercials. They will co-exist."

Another area Williams would like to expand in is infomercials for charitable organizations, especially environmental groups. She wants to package deals in which people would produce the programs for cost, in exchange for a cut of the contributions generated.

"Their budget often is so small, the cost is almost prohibitive," says Williams. "They get back five times what they spend in pledges."

Her other goal - taking infomercials international.

"You can't just stop with one good idea," she says. "You have to execute it well and never give up. I'm looking at Europe and Asia."