Studio audience laughter

The consensus of most viewers seems to be that Rupert's act was mediocre and amateurish at best (my opinion) and terrible at worst. The question is, why did the studio audience laugh at his lackluster material?

The answer is that they laughed for the same reason that people laugh at inane sitcom scenes that they wouldn't otherwise find funny thanks to the laughter soundtrack (if the material were so funny, why do people need to be told when to laugh?). People think the material is funny because they're told it's funny.

The audience heard a celebrity - Tony Randall, announce that Rupert Pupkin's act was going to be amazing and that he's destined for greatness, and they took him at his word. More importantly, they assumed that if Rupert appeared on a high profile late night show, he somehow got there deservedly and was "supposed" to be funny. I'm not sure if the studio had cued laughter or not (as many late night talkshows do), but the point is that people accepted and laughed along with Rupert's act not on its own merits but on the show's authority.