Acquirer: (Also sometimes called a Credit Card Processor) A financial institution that provides credit card processing services for Visa and MasterCard receipts collected by merchants, directly or through an affiliated independent sales organization (ISO). The acquiring bank receives funds from a cardholder when a credit card transaction is completed, and deposits the payment amount, less any fees, into the merchant's Merchant Account and from there into his business checking account. (See also ISO)

Area of Dominant Influence: a television marketing area defined by Arbitron. Each county in the U.S. is assigned to only one market according to where the majority of household viewing hours are directed.

Authorization: This is the first step in processing a credit card transaction. The charge amount is checked against the available balance at the customer's issuing bank, and the amount is put on temporary hold (usually about seventy-two hours). The second part is the Settlement (see).

Average Take: A term used by continuity marketers to describe the average number of orders a consumer will make once entering a continuity program. For example, a music club member may take an average of 6 CD's before canceling their membership.

AVS (Address Verification System): A fraud prevention feature built into most credit card transaction processing equipment that runs an automatic check in order to verify that the billing address given by the customer matches the billing address for the credit card that is presented for payment.

Back-End: Any product transactions occurring after the initial direct-over TV sale generated by an infomercial or short form DRTV spot. Back-end sales can account for 20 to 50% of all DRTV product sales. Additional sales of the DRTV product and related products can be generated via inbound telemarketing (up-sells), outbound telemarketing, direct mail, continuity and club programs and catalogs. Back-end sales can account for 50 to 90% of all product sales. Retail sales are generally not considered "back-end".

Batch. A merchant's collection of credit card transactions over a period of time, usually one full day, that are saved for submission to the acquiring bank all at once, usually at the end of each day. Batch fees are charged by acquiring banks as a way of encouraging merchants to submit transactions in a group, rather than one at a time throughout the day.

Broadcast Month. The broadcast industry divides the year into twelve broadcast months, each of which starts on a Monday and ends on a Sunday. Check out xxxx for this year's broadcast calendar.

A Broadcast Week starts on a Monday and ends on a Sunday.

Call to Action: Also know as "CTA." That portion or portions of an DRTV commercial that "asks for the order." An infomercial can have 1, 2, 3 or more CTA's. Each infomercial CTA is typically a minimum of 2 minutes long and generally reviews the product's main features and benefits, and states the product guarantee, price point, warranties, "send check" address, 800#, credit cards accepted, etc.

Card Issuer: The financial institution (often a bank) that establishes a line of credit with a cardholder and issues the credit card that is used for the purchase of good and services.

Chargeback is a process initiated by an issuing bank at the request of a cardholder who wants to dispute a credit card charge. The chargeback process is usually more difficult for a customer to navigate than a simple refund request (see) made to the marketer, so it is often a last resort for an unhappy customer. When a customer requests a chargeback, his issuing bank notifies the merchant's acquiring bank or ISO, and the merchant has a short period of time to contest the chargeback, before the issuing bank processes a debit against the merchant's account. The MasterCard and Visa rules, which favor issuing banks, are very strict regarding charegbacks. If a merchant has chargeback volume in excess of one percent of his transactions, he is in danger of losing his merchant account. The associations are much more lenient regarding refunds, because processing them is much less time-consuming for them.

Continuity Program: This is a DRTV product purchasing program that encourages consumers to purchase the first in a series of products for a lower than normal price, then continue purchasing the entire series for a higher price. Extensively used for music and book series. Concept also employed successfully for beauty, diet products and self-development products.

Cost of Goods: This is generally the direct costs associated with the manufacturing/packaging of a specific product.

Cost per Order: This is most often called "CPO." Refers to the television media cost to generate one product order. The figure is determined by taking the cost of a specific infomercial telecast and dividing it by the number of orders received. A $1000 time period that generates 100 product orders would have a CPO of $10.

Credit Card Reserves are the often-overlooked sinkhole of our industry. Almost all Ascquirers and ISO's reserve the right to seize all of your MasterCard and Visa receipts without warning and without cause a and hold them for six months. Supposedly, they do this to protect themselves against a rise in returns or chargebacks. Unfortunately it is abused by some unethical processors, who calculate that few small companies will be able to survive the calamity of having all their current revenues seized, meaning that there will be no one left to claim the money when they have to give it back after six months, and they can pocket it.

Daypart: This refers to the various multiple hour segments of televisions 24 hour broadcast day. Dayparts are typically segmented as follows:

Early Morning	Morning	Daytime	Early Fringe	Early News	Prime Access	Prime	Late News	Late Fringe	Late Night
6a - 9a	9a - 12n	12n - 4p	4p - 6p	6p - 7p	7p - 8p	8p - 11p	11p - 11:30p	11:30p - 1a	1a - 6a

Decline: What happens when the charge cannot be authorized (see Authorization) for any reason, which might include inadequate funds available, the card's expiry date has been passed, the card is reported stolen, etc.

Discount Rate: A percentage-based fee, usually falling somewhere between two and ten percent, that is paid to the acquiring bank or ISO for the time and expense involved in the handling of any electronic transaction.

A DR Media Agency is a company which buys infomercial or short form media on behalf of a client, for a customary fee of 15% of the billings. Most DR Agencies provide their clients with regular reports on the profitability of individual infomercial airings or flights of short form commercial airings. They also traffic tapes to the broadcast entities. T Some DR Media Agencies offer additional services for additional fees such as scripting, production, and consulting.

Electronic Check: An electronic check is an unsigned check prepared after a customer buys a product, approves the amount, and provides his bank account and clearing house information, (usually over the phone). Marketers use this service to take orders from customers who do not have credit cards, or cannot authorize a credit card transaction.

Firesale: A term used to describe the last minute, sudden dumping of infomercial media into the media buying marketplace, usually because some agency had just canceled the same media time.

Flight: The term used by short form media buyers to describe a specific number of spots to air during a 1,2,3 week or more period on a specific TV station or cable network.

Gross Media Billings are the media costs charged by broadcast or cable entities or their agents for broadcasts of a short form or infomercial. These costs are calculated including the standard Media Agency fee of 15% (See Net Media Billings).

Guaranteed Media is media purchased with a broadcaster or network of broadcasters under a contract with a marketer , which stipulates that Broadcasters will continue to air an Infomercial until a sum designated in the contract has been generated in Per Order Fees or Per Inquiry Fees (see). Basically, it's a per order or per inquiry deal with an upfront payment to the broadcaster.

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Identifier: The information which appears on a customer's credit card statement, next to the amount of the charge and the date of the charge. It is important to make sure that the name of the product appears here, not the name of the marketer, who may not be recognizable to the customer, and result in a charegback. The marketer must make special provision to ensure this. Also adding a customer service toll free number is a good idea, in the never-ending effort to avoid chargebacks.

An Inbound Script is the script which the inbound operators read to your clients. A well thought out inbound script is important to success, and is often not given the attention it is due.

An Infomercial is a TV or radio broadcast 28 minutes and thirty seconds in length, which offers a product or service for sale through a toll free telephone number displayed within the broadcast.

An ISO (also one of the entities sometimes called a credit card processor) is an independent sales organization (ISO) affiliated with an Acquiring Bank (see) which is authorized by the MasterCard and Visa organizations to settle Visa and MasterCard receipts, and deposit those funds in a merchant's Merchant Account. Many banks offer this service, but impose strict limits on the monthly volume which they will process. They are doubly conservative when it comes to merchants who process a lot of MOTO transactions (mail order/telephone order), which have more than the usual amount of returns and chargebacks, which is typical of direct response marketing. For this reason, it is wise to deal with an ISO, and pick one who has experience dealing with MOTO merchants. Why are Acquiring Banks so paranoid about processing in volume where there is a danger of returns and chargebacks? Because under the Visa and MasterCard regulations, they are responsible to make the consumer whole on credits. And if they cannot collect it from the merchant, they have to pay it themselves. Their biggest worry is they process for a merchant who goes under or disappears, and they are left holding the bag on all the refunds. (See Credit Card Reserves). The ISO has the same liability, but those with MOTIO experience have systems in place to limit their risk.

Issuing Bank: The bank that maintains the consumer's credit card account and must pay out to the merchant's account in a credit card purchase. The issuing bank then bills the customer for the debt.

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Media Efficiency Ratio: Also known as MER. A number, which is a snapshot of an infomercial's overall success or failure. The ratio is derived by dividing total sales (resulting from a particular telecast or telecasts) by the media cost. For example, if you buy a half hour for $1000 and generate $3000 in sales, the MER is 3. Sales / Media Cost = MER

Merchant Account: A specialized account established between a merchant and a financial institution in order to process credit card purchases. By establishing a merchant account, the financial institution agrees to pay the merchant for valid credit card purchases in exchange for the right to collect on the debt owed by the consumer.

Merchant Bank: A financial institution that provides credit card processing accounts for merchants. Also referred to as an acquiring bank or an acquirer, the bank receives funds from a cardholder when a credit card transaction is completed, and then deposits the payment amount, less any fees, into the merchant's business checking account.

MO/TO: Mail order and telephone order. A high risk type of merchant account (by the standards of the processing industry) with a unique set of rules that are much more restrictive than the rules that govern retail merchants, because this type of account allows a merchant to accept credit card payment without the cardholder's signature.

Multi-Pay Offer: See Offers

Net Media Billings shall mean all media costs charged by any broadcast or cable entity to advertisers for broadcasts of the Infomercial, including the Media Agency fees, but excluding Media Funding and Servicing Fees. (See Gross Media Billings)

Offers: A Single-Pay Offer is a consumer offer in which full payment for product shipped to the customer is charged to the consumer's credit card or bank account immediately after the sale. Multi-Pay Offer shall be a consumer offer which permits the consumer the opportunity to pay for the product he or she has purchased in two or more payments. Conversion to One-Pay shall be used in regards a Multi-Pay Offer and shall mean the percentage of total orders which will be charged to customer's credit card in one sum.

An Outbound Telemarketing Company is a ... (?)

Per Inquiry Fee: Broadcast purchases in which the marketer does not pay a set amount to the broadcaster for the purchase of time. The marketer pays a contracted amount for every call booked into the toll free number displayed in the ad running on the broadcaster's station. The more calls come in, the more the marketer pays. Fewer calls mean less fees. Sounds good because it takes the market risk out of buying time. The problem is, there is not enough per inquiry time available to support a campaign.

Per Order Fee: Same economics as above, except that the fee the marketer pays is calculated on the basis of orders instead of inquiries.

Qualified Transaction: ... (?)

Return or Refund.This is a credit to a customer's credit card account at a customer's request. Unlike a chargeback, the request is made to the merchant customer service, not the customer's credit card issuer.

Settlement: The process of completing all necessary funds transfers so that the merchant involved in a credit card transaction is paid for their goods or services.

A Short Form is a TV or radio commercial thirty seconds, sixty seconds, ninety seconds or two minutes in length which offers a product or service for sale through a toll free telephone number which is announced within the commercial.

Single-Pay Offer: (See Offers)

Transaction Fee: The pre-determined and customary charge that is incurred for each individual credit card transaction a merchant processes, and collected by the merchant account provider or the ISO.

Transaction Fees: A per transaction fee imposed by credit card processors on settlements and authorizations (Sometimes one fee for both). Not to be confused with the discount fee, which is an additional charge quoted as a percentage.

An Upsell Item is any product or service offered for sale in the Infomercial or by telephone operators taking orders from the Infomercial, the price for which is not included in the price quoted in the infomercial or short form order screen.

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Wide Rotation: Usually a booking which does not specify a particular day part (see), much less an exact hour and minute, when the commercial will air. Most short form direct response media is bought on a wide rotation basis, so that the broadcaster has the option to slot it in whenever he has an empty slot. Wide rotation, direct response time is steeply discounted from rate card.

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