Taking Exercise for A Ride

Los Angeles Business Journal

Taking Exercise for A Ride

Infomercial producer steps up marketing for elliptical machine.

By Joel Russell

Monday, February 20, 2012

Demonstrates that Shared Risk Advertising & PR Succeeds in a Tough Economy

When Jeff Goddard saw someone riding something that looked like an exercise machine down the street, it was love at first sight. And a business opportunity.

Goddard is chief executive at TVA Media Group in Studio City, a company that produces infomercials. He immediately saw the strange vehicle as being ideal for a TV marketing campaign.

“I saw this crazy-looking elliptical on wheels, I hunted down the manufacturer, and for the first time in years I made a cold call asking if they had ever done an infomercial,” he recalled.

The company was in discussions with other producers, but hadn’t sealed a deal.

Named the StreetStrider, the machine has been around since 2007 and appeared in a 2010 episode of weight-loss show “The Biggest Loser.” But the manufacturer, StreetStrider Holdings Inc. in Fresno, had never made a profit.

Goddard got the contract by agreeing to finance two-thirds of the infomercial production cost in return for two-thirds of the profit from sales.

The campaign launched last month and has attained a media efficiency rating of 4.11, meaning that for every $1 spent on marketing, it generates $4.11 in sales, more than double the ratio that indicates profitability, according to TVA tracking. Goddard received his first profit-sharing check last week.

Garrett Watkins, chief executive at StreetStrider, is pleased.

“Before we came to TVA we were really struggling,” Watkins said. “We’ve now become profitable and our sales are accelerating.”

Goddard said the major challenge for the StreetStrider was its price, which averages $1,820 per machine. He noted that success is rare for infomercial products that cost more than $100, and these times of high unemployment don’t help. So he made sure the infomercial included financing and that it communicated the high quality of the product.

“The lesson is that even in this economy, high-ticket items are possible to sell,” he said. “But all the stars have to be in alignment.”