Stephen Maturen/Getty Images
- Mike Lindell told Insider infomercials are working well for MyPillow and are not going anywhere.
- MyPillow has relied on the late-night ads, starring the CEO himself, to build up its brand.
- Analysts said that by relying on infomercials, the company may restrict its audience – and its sales.
- See more stories on Insider's business page.
Before he hit the headlines over his friendship with former President Donald Trump and his support for voter-fraud conspiracy theories, MyPillow CEO Mike Lindell was perhaps best known for the dozens of late-night infomercials he appeared in.
The company relies heavily on these infomercials, many starring Lindell himself, to spread awareness of the brand and drive sales.
It doesn't plan on stopping the adverts any time soon, Lindell told Insider in a phone interview Thursday.
But over the last few months, MyPillow's products have been pulled by at least 22 retailers, including Sam's Club, Kohl's, and Bed Bath & Beyond. Lindell previously told Insider's Jacob Shamsian he expected this to cost the company around $65 million in lost revenue this year.
As a result, MyPillow may need to rely more on direct-to-consumer (DTC) sales.
Analysts told Insider infomercials have worked well for the brand in the past - but it may need to knuckle down on social-media advertising if it wants to attract new customers.
Infomercials helped MyPillow to grow
"By using infomercials, MyPillow went from a tiny business into the massive company that it is today," Iliya Rybchin, a partner at Elixirr Consulting, told Insider.
Lindell previously told Insider's Kate Taylor that he run ads on more than 5,000 channels and 500 radio stations that span the political spectrum and that the company reaches "everyone."
Lindell told Insider on Thursday that MyPillow uses its promo codes to track adverts and that "we view every single spot as our only spot."
Lindel said: "Let's say it's 4 in the morning and it's an ad on CNN, if that spot costs $1,000, if it doesn't break even or make money we never run it again."
The company has also ramped up its advertising in radio and podcasts because these channels are "booming right now," he added.
In court filings, the company has said it spends an average of $5 million a month on advertising, per The New York Times.
The publication reported that Lindell spent 59% of its total television spending in 2020 with Fox News, citing data from MediaRadar.
Because MyPillow has always focused on direct consumer advertising, the shift from retailers to DTC sales won't be hard for the brand, Matt Voda, CEO of OptiMine, told Insider. Lindell himself has said lots of customers have been buying products directly through MyPillow after retailers stopped selling its products.
Lindell told Insider that during the pandemic more people were watching TV so the company's infomercials can reach a bigger audience than they could in the past.
Infomercials are a good way for companies to tell a story about their products and to educate potential customers, Voda added.
TV ads give viewers the trio of sight, sound, and motion, and lets companies bring their products to life, Jim Lecinski, professor on Kellogg School of Management's MBAi program, told Insider.
This is something that MyPillow capitalizes on in adverts, where it focuses on the tactile benefits of its pillows. It also often airs its infomercials at a time when people might be feeling tired and the idea of a pillow is more attractive.
"With our branding, we are just doing stuff that works," Lindell said.
Even in the digital age, TV is generally proving to be a resilient source of advertising, according to Lecinski. As companies increasingly turn to social media for the marketing, many are cutting billboard, newspaper, and radio ads - but TV is remaining strong, he said.
Through infomercials, companies can also collect an "enormous" amount of data, Rybchin said.
"One may look at infomercials and think it's just a sketchy place to sell sketchy advertisements at 3am," he explained. "However, direct response companies are amongst the most sophisticated advertisers in the world."
Companies can monitor how many calls are coming from specific geographies, which prices and time slots generate sales, and who is buying. This data can then feed into their other marketing strategies, Rybchin said.
By using infomercials, MyPillow might be restricting its audience
But infomercials only have a limited reach - and especially among younger people, who increasingly shun terrestrial television in favor of streaming services such as Netflix and Amazon Prime.
"Longer-form content like infomercials is entirely foreign to younger generations of consumers," Michele Romanow, the co-founder and president of Clearbanc, told Insider.
Another issue is that infomercials only have a limited targeting capacity, Lecinski said. Companies can choose which channels they air their ads on, and some networks may attract certain demographics of customers more than others - but this can have a lot of wastage, he said.
Striking deals with networks may also be harder for MyPillow to come by as the controversy surrounding Lindell continues, as shown by the number of retailers who have already pulled ties with the brand.
"Lindell has further risks of some networks cutting ties over his perpetuation of baseless voter fraud claims," Eric Schiffer, chairman of Reputation Management Consultants, told Insider.
MyPillow spends the majority of its television advertising budget on Fox News, per The New York Times, and MyPillow is the leading advertiser of the network's most-viewed show, "Tucker Carlson Tonight." But in a radio interview last week, Lindell seemingly slammed Fox News and asked if the network was "in on" a conspiracy against him, potentially souring relations.
Infomercials are also becoming more expensive to run, Rybchin said. Most major networks are charging more for air time, which he said was driven by audiences staying at home alongside an influx of new advertising from DTC brands like Casper, Peloton, and Warby Parker.
Social-media advertising could attract younger buyers
MyPillow does, however, seem to be spending more on social-media advertising.
The pillow company spent an estimated $3.6 million on Facebook ads from January to mid-March, ad-data company Pathmatics told Insider. In 2020, it spent an estimated $2.3 million on Facebook ads over the course of the whole year, per Pathmatics.
As the US opens up and people spend less time watching TV, MyPillow will spend more on digital advertising, Lindell told Insider.
By investing more in social media marketing, MyPillow would have more precision for its marketing and could aim adverts more closely at its target market. Facebook, for example, lets advertisers target users based on demographics and pages they "like," and even lets them import in their customer database, Voda said.
"While infomercials worked well for MyPillow in the past, and are likely still effective, infomercials cast a wide net," Christina Eyuboglu, publicist and crisis-management expert at Adduco, told Insider. "Facebook is targeted, cheaper, and frankly, provides better control of who sees your message."
On Facebook, it's typical to have a cost per thousand people reached of between $3 and $10 on average, whereas for TV this generally starts at $25 and "can easily reach up to $45 or higher," according to Dean DeCarlo, founder and president of Mission Disrupt.
Social-media advertising also gives MyPillow the potential to target a bigger pool of potential customers, including more younger people, Lecinski added.
Lindell told Insider that by using digital media, MyPillow can go beyond its traditional baby boomer market to attract more millennials.
The business mogul ultimately seems optimistic about the future of MyPillow, and told Insider its infomercials aren't going anywhere. In a podcast earlier this month, he said the retailers who kept stocking MyPillow were "thriving."
MyPillow has had to expand its workforce to cope with demand and more customers have been buying products directly through MyPillow too, he said.