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New Client...wants it all

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Chuck Obernesser
New Client...wants it all
on May 21, 2008 at 6:53:46 pm

Hello to all once again...
After being in business for 3 years and doing everything possible for clients I have the opportunity to take on my first big client. I have joined with another company and we offer everything to meet the advertising needs of people in our area. I talked with the owner of the business and he heard "how great our presentation was and is looking forward to meeting with us." He asked me though if we handle everything. What he wants and i am confused is that we make money off of how well his commercials air on TV? Not sure if that is what he meant and he was talking about rating numbers and such. Let's face it I am confused about this but he wants to call up and say I need a spot about this product done and to air by this date. And that is all he really wants to do. He doesn't want people selling coming to his stores he wants to refer them to us and handle it. Has anyone done something like this before. I know many may not be an ad agency type and I don't like to call us that so much. We are more a group. But any guidance would be totally appreciated! Please help.

Thanks soooo much in advance;

Chuck
Obernesser Productions
http://www.obernesserproductions.com


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Mark Suszko
Re: New Client...wants it all
on May 21, 2008 at 9:08:39 pm

"Do it all " to my mind also means arranging the time buys and the fulfillment (you know, taking the calls and processing and shipping the orders from viewers). You do that too?

Reading between the lines of your post it sounded for a second there like he may be talking spec or commission to you for making the spot, instead of paying you up front. I would advise caution if he proposes anything along the lines of "make the spot for free, and you'll get a percentage of every sale we make". I have never known a case where this was not a scam.

There may be some legit ones I don't know about, but I'd be afraid of such a "deal", which basically means you are out all the time and money and may never see any payback.


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Rick Dolishny
Re: New Client...wants it all
on May 22, 2008 at 1:43:05 am

Scam.

God, where was the Creative COW Business Forum 15 years ago?

---
Rick Dolishny
Discrete Editors COW Leader
http://www.thecreativeprocess.ca


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Brendan Coots
Re: New Client...wants it all
on May 22, 2008 at 2:32:36 am

Lenny Lieberman of Lieberman Productions has made a trillion dollars from this type of arrangement with Guthy Renker. GR pays cost to have the spots/infomercials developed, and Lieberman Prod. gets a cut of the profits.

Of course, this would only be a wise arrangement if the client is reasonably well established and (this is key) willing to pay the full costs of production + profit sharing RATHER THAN expecting a total spec.

Specs are scams 99% of the time, but there are some legitimate and very lucrative profit-sharing/partnership opportunities out there. Spotting the difference is the hard part...

Brendan Coots

Splitvision Digital

http://www.splitvisiondigital.com


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Steve Wargo
What?????
on May 22, 2008 at 5:29:29 am

[Chuck Obernesser] "He doesn't want people selling coming to his stores he wants to refer them to us and handle it."

I guess that I don't understand this at all. Can you repost with complete, understandable sentances?



Steve Wargo
Tempe, Arizona
It's a dry heat!

Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
2-Sony EX-1 HD .


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Chuck Obernesser
Re: What?????
on May 22, 2008 at 12:02:11 pm

Thanks all for the input thus far. Steve what I meant by no one coming to his stores is that he runs a car dealership and he does wants sales people coming to his store and asking for the sales manager and take up their when they should be trying to sell cars and not taking time talking about sponsorships or buy time on my station etc... He wants all that sent to us and we decide where best to place his ad budget. I hope that clarifies it a bit. As for payment, I believe we will have a set price for commercial production print ad etc...he was talking about pricing for the spot on TV and it's ratings depending on what the demo is for that spot. But thanks for the advice on everyone's part. I was really confused when he started asking me about all these different things but as I went back I think it started to sink in and made a bit more sense.

Thanks

Chuck
Obernesser Productions
http://www.obernesserproductions.com


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Mike Cohen
Re: What?????
on May 22, 2008 at 1:18:18 pm

It seems you should draft a client service agreement, which states what they get and for how much - preferred rates in other words. For example, 30 second spot, 1 week turnaround, costs X dollars. Specify how you will handle billing, such as monthly invoices with net 30 payment terms.
If you have this guy calling you up with last minute requests, you need to be able to bill him in a fair manner for both parties.

Do you or your partner have the ability to buy time on your local channels or cable system? You would have to know the lead time for getting a new ad in a rotation and let your client know the realities of such requests.

Do it all does not mean anything without a signed agreement stating what they get and what you get.

Now, I have a system I'd like to tell you about that is guaranteed to make you money. All I need from you is $500 and I'll send you whatever....

Good Luck.
Mike


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Steve Wargo
Re: What?????
on May 22, 2008 at 3:08:43 pm

[Mike Cohen] "I have a system I'd like to tell you about that is guaranteed to make you money. All I need from you is $500 and I'll send you whatever."

Mike,

Is cash OK?

Steve Wargo
Tempe, Arizona
It's a dry heat!

Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
2-Sony EX-1 HD .


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Todd Terry
Re: What?????
on May 22, 2008 at 1:35:48 pm

Hi Chuck...

I agree, it was a little confusing at first, but it's fairly clear and simple now... this guy simply wants you to serve as his advertising agency.

At minimum that would mean that you produce his spots, that you research the market, learn the market, establish a budget for him, determine how many GRP (gross ratings points) you want to try to hit for his shows, deal with all the media sales people, determine when and where his media buys take place, and place the commercials.

He would pay you for production, and he would pay you directly for the cost of the media placement. You would make your money from the production, and from the fact that although you are charging him the TV outlets' standard rates the TV stations and/or cable companies will be giving you "agency rates" (usually 15% less) and you pocket the difference.

If he wants to take that a step up and have you serve as his full full service agency, it would be all those things and a few more... it could extend to fully concepting/writing and implementing everything about all his campagins, not just TV but into a lot of other areas as well: radio, web, outdoor, newspaper, fleet graphics, displays, logos, signage, events, etc.

I don't know what your experience is, but although we don't really "talk it up" we have and do continue to do a lot of automotive work... we regularly do about 15 different dealerships throughout the southeast right now (some really good, some really bad but hey, it pays the bills)... most of them do a new campaign every month but a few of them are less frequent than that. We try to steer away from the cheesy screamer stuff and attempt to class it up a bit when we can. For example we just created a campaign for a dealer with high-end products (BMW, Porsche, Land Rover, Jag, etc.) and these spots are very copy light and free of heavy offers, all shot in black and white with a classical music track.... it remains to be seen if they work, but the client is very happy.

That being said, automotive advertising often "is what it is," and most of our car stuff would never "make the reel." In fact, our regular reel only has a couple of very high-end car spots on it, we keep a completely separate specific "automotive reel" for potential car clients that want to see it.

One thing to remember with automotive clients is that sometimes the money is a little slow. That's because much of automotive advertising is co-op... the dealer gets paid back a certain amount of his advertising cost (usually half) from the manufacturer (assuming you stick to all of the company's nit-picky rules... BMW and Volvo are especially tough sticklers). So in those cases the dealers often try to wait until they get the co-op money in hand before they pay you. So often your net-30 invoice can turn into 60 or 90. And by the way, co-op generally applies only to what you spend on media placement and not on production... so there is often the struggle with car dealers who might have very big budgets (we've had dealers who have spent $100K a month on advertising) but still want to keep their actual production costs as low as possible since they have to foot all of that part of the bill. We usually try to convince them that it's better to spend part of their money to air a better spot fewer and more targeted times, than to blow all of their money on media and wallpaper the airways with a bad spot. We try to get our dealer clients to dedicate about 20% or so of their budgets to production costs, and put the rest on the air.

Good luck!




T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com






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Steve Wargo
Re: What?????
on May 22, 2008 at 3:12:50 pm

Todd

It's too bad that all local dealers don't take your advice. We have two Lexus shots on our reel and the rest are buried deep in the library.

Steve Wargo
Tempe, Arizona
It's a dry heat!

Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
2-Sony EX-1 HD .


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Steve Wargo
To finish that...
on May 22, 2008 at 3:16:20 pm

I had that discussion with a dealership many years ago and he informed me that "His type of customer is so stupid that you have to keep telling them over and over. It's almost like you need to reach out and shake them, like when your kids are bad". We don't do any work for him. I can only imagine what would have happenned during the first payment dispute.

Steve Wargo
Tempe, Arizona
It's a dry heat!

Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
2-Sony EX-1 HD .


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Mike Cohen
Re: To finish that...
on May 22, 2008 at 3:45:49 pm

I'm curious, while we are on the subject of car dealers.
Most local car ads are either the Crazy Eddie screaming monster truck style, or manufacturer beauty shots with a donut, or a combination, usually involving the cute children of the dealership owner.

I do not see too many original beauty shot local car ads - aside from the higher cost of production, do car manufacturers have anything to say about how their products are portrayed in advertising that they do not endorse?

For example, if a local Lexus spot has some sweeping shots of the car, the trim, the dash, the tires, the cupholders, etc - these are images of the car - so the spot is selling the Lexus L923x as opposed to promoting the dealership.

Similarly, a local supermarket may run a spot promoting Milano cookies, 2/$4. But what if they have sweeping beauty shots of the Milano cookie, a closeup of the chocolate filling, a shot of someone luxuriously biting into a cookie - then the spot is selling Milano cookies.

In other words, local spots are being made at the dealer's expense to sell a product they do not make, but a product they sell. Is there a difference from a business/IP point of view?

See what I'm asking?

Mike



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Ron Gerber
Re: To finish that...
on May 22, 2008 at 4:11:45 pm

Having done a lot of the really bad local car commercials, generally our point of view is that Ford sells the car; we sell the dealership that sells the car. In most cases, the running footage is more a convenience to use. Generally the dealerships don't know what the manufacturers are going to feature until the last minute (like financing offers or rebates) and they want to beat their competitors to the punch and get on air first. In most markets, the local dealers also have an advertising group that they all chip in to for air time of their product commercials produced by the manufacturer (like an F-150 commercial telling you to go to you the Ford Dealership near you)

There are a few dealerships that we have shot "local" running footage for but for the most part they don't want to do it because of the cost (and at times the look/quality). They do get co-op from the manufacturers on the air time but generally the production comes out of their own pockets.

I hope that makes sense and I didn't add to the confusion.




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Todd Terry
Re: To finish that...
on May 22, 2008 at 6:32:32 pm

Whether you are promoting dealers vs. brands can be a little sticky... and it just depends on where you are and what the competition is...

We do some dealerships (Honda, Buick, Chevy, Chrysler, Jeep) where the stores have major competition from other dealers in the area, so those spots focus heavily on the particular dealership and why customers should by from them.

Conversely, we also have some dealerships (BMW, Jaguar, Land Rover, Porsche) where they are the only game in town. In our area a potential Porsche buyer has to buy from our client or go out of town... to the next dealership 150 miles away. In that case we are a little more heavily advertising the cars and incidentally advertising the dealership.

Just a couple of other observations about car spots...

Running footage reels from the manufacturers can often be used, but the quality varys greatly. And weirdly enough, it seems that the more expensive the car, the worse the reel (and vice versa). Reels for, say, Buick or Honda... they are georgous. You'd swear Steven Spielberg directed them and Haskell Wexler shot them. But BMW or Jaguar?...hand my mother a camcorder and you'll get better footage. And often sometimes you have to shoot your own footage. The reels are so expensive to produce that manufacturers don't always do a new one every year... sometimes even less often than that. So often times we will need a particular new vehicle or model for which manufacturer footage simply does't exist yet. In those cases we have to shoot our own. Fortuantely in our area we have found a couple of locations (the typical winding mountiain roads, bridges, etc.) that enable us to shoot running footage that mixes fairly seamlessly with the stuff from the manufacturers.

The other problem that you can quickly run into especially if you work for a lot of different dealers like we do is scheduling. They ALL want to advertise, and they ALL want to advertise at the same time...with new campaigns typically starting right at the middle of the month when the manufacturers release the "deal details" for the month ($5000 rebate, or 1% financing, or whatever). The problem is, that they never release these details in advance...because Chrysler doesn't want to tip their hand to Ford who wants to keep details secret from Toyota and on and on, so you never know what you are going to need to do very far in advance and it comes right down to the last minute. We've probably done as many as a couple of dozen car spots in a month (maybe more, actually I think 31 was the most we ever did)... now that normally wouldn't be a scheduling problem, but when they all have to be produced during the same week because none of the dealers can give you any advance info it can be tough to get them cranked out because there is a limited amount of pre-production that you can do to get a jump on it.

As I said, car spots rarely make the reel... but they definitely keep the doors open.


T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com






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Timothy J. Allen
Re: To finish that...
on May 22, 2008 at 9:19:03 pm

Let's not forget that advertising agencies actually spend a lot of time researching which types of spots bring the most revenue in for their customers.

While all of us on the production side would like to go for the highest production quality (or at least the highest production value), it seems that the research traditionally has shown that it's more important to customers who are searching for a new car to feel like they are getting "the latest and hottest 'tips' on where to find the best deal".

I've worked very high-end campaigns, shot in HD and film with high production values and where the dealer buys out an entire stop set (instead of a typical 30 second slot). In each of those cases, there wasn't enough measurable return on investment to continue with that approach. Maybe if it happened as a once a year special sponsorship, but not regularly.

I'm all for making great looking and great sounding spots - let's face it, we devote huge amounts of time to hone our skills so we can improve the quality of our work. For better or worse, there is a balance between speed and quality and the balance between speed-to-air and quality is commonly determined by market research and feedback.

Occasionally pride will triumph over riches, but in the end, the dollars that come back to the dealer are the ultimate measure of a campaign's success.




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Chuck Obernesser
Re: To finish that...
on May 23, 2008 at 12:43:46 pm

Thanks everyone for all the info you have provided. It's nice to see other helping and giving advice unlike where I live to ask someone for advice means to let them know of a new business opportunity. All appreciate everyone's ideas and tips and advice. I feel more prepared but I will continue to look into this this even more so I can go in with the owner and tell him what we can offer.

Thanks again!

Chuck
Obernesser Productions
http://www.obernesserproductions.com


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Christopher Wright
Re: To finish that...
on May 23, 2008 at 7:10:32 pm

I thank my lucky stars that I have NEVER had to do a cheap car dealer ad in my entire career. Now cheap, bad political ads? That's another story for another thread!!

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Mike Cohen
Re: To finish that...
on May 23, 2008 at 8:14:21 pm

I once made two local (town first selectman) ads. We did one free ad for both candidates. One guy had a script, and was shot sitting on a bench near a bucolic local pond. The other guy had no particular script, so we shot him at his house with his grandkids, and in front of a local high school. The 2nd guy won and stayed in office for 10 years.

Interesting thread indeed.


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Mark Suszko
Re: To finish that...
on May 23, 2008 at 11:50:49 pm

I've never produced a cheap car dealer ad myself, but would be interested in the creative challenge of making one that was elegant and smart and inexpensive yet brought in the sales.

My wife's a graphic artist and designer, and when we see bad signage or commercial art, I point to it and say: "They need you, hon". She likewise does the same when we're watching TV at home and bad local spots come on.

Sadly, I don't think any cheap local car dealer is going to bankroll me on an untested and experimental spec spot for him, when he's obviously getting a decent enough response doing what he's always done, or he'd have tried other things...

But I have done a ton of low-budget PSA's involving transportation issues over the years, functionally similar to car spots, and many of those looked very good and worked using very little money, because they had a simple but well-thought-out message leveraged off powerful visuals and good cutting.

But back to the car dealerships for a minute.

When I had to shop for a used car, the very last thing I paid attention to were TV and radio ads. I glanced thru print ads in the paper and free weeklies and "shopper" papers, did a lot of internet research on the repair histories and user comments, and read some consumer reports and similar things, narrowed down to exactly two makes/models. Went out and rented the one of those two cars I had never driven before, drove it for a day trip. The wife and I compared notes between our two candidates, picked the one make and model we wanted and the year we wanted (used), then checked all the print sources and internet sources for that exact car near us. Test drove three candidate cars that matched our specs over two weekends at three dealerships. Picked THE car, sat down with all our research and cost estimates and haggled to a respectable deal. Done. Process took about two months from the time we decided it was necessary to buy a replacement vehicle.

In all that time we NEVER looked at anybody's TV ads and ignored all the screaming radio ads. Maybe we are not typical car buyers? When I watch the TV ads, they seem to really try and get a viewer to pull the trigger for a snap decision, stressing panic and deadlines to act. But only an idiot would decide that trivially on a purchase costing thousands, right?

Maybe I'm answering my own questions?





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John Cummings
Re: To finish that...
on May 24, 2008 at 1:34:02 am

"When I had to shop for a used car, the very last thing I paid attention to were TV and radio ads. I glanced thru print ads in the paper and free weeklies and "shopper" papers, did a lot of internet research on the repair histories and user comments, and read some consumer reports and similar things, narrowed down to exactly two makes/models. Went out and rented the one of those two cars I had never driven before, drove it for a day trip. The wife and I compared notes between our two candidates, picked the one make and model we wanted and the year we wanted (used), then checked all the print sources and internet sources for that exact car near us. Test drove three candidate cars that matched our specs over two weekends at three dealerships. Picked THE car, sat down with all our research and cost estimates and haggled to a respectable deal. Done. Process took about two months from the time we decided it was necessary to buy a replacement vehicle."

C'mon...wandering into the dealership to "just look", and going home an hour later with a new car is one of life's most joyous and disorienting experiences.

Some people just don't know how to have fun.



J Cummings
DP/Chicago
http://www.cameralogic.tv


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John Cummings
Re: To finish that...
on May 24, 2008 at 1:37:36 am

Oops...I left out thoroughly irresponsible.


J Cummings
DP/Chicago
http://www.cameralogic.tv


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Ryan Mast
Re: To finish that...
on May 25, 2008 at 5:54:15 am

I know a guy who does that. Seriously. A several-thousand dollar used car purchase on a whim. He thought he might need an extra car for his daughter, so went to the dealer, found one that looked okay, paid, and drove it home that day. And it's not like he had ridiculous amounts of disposable income, either.

So I guess it's not implausible, but is that kind of consumer behavior common? Does the ad create a need, or does it play off of ideas already in a buyer's head? If someone was already thinking they needed to replace their car, does the screaming panic of the ad push the consumer over the threshold to get out and actually buy a new car?



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Bill SerGio
Re: New Client...wants it all
on Jun 8, 2008 at 7:55:24 pm

Hi,

There are 2 types of TV commercials, namely, Spots, and Infomercials. Spots are 2 minutes or less and are a worthless form of advertising. When a Spot comes on TV the viewer goes to the bathroom or refrigerator or TIVO's it out and there is no way to buy Spots low enough from any agency to turn a profit through an 800-number. If you wanted to run a Spot for a product you would have to cut a deal with a "Time Bank Broker"--this is a company that trades movies for Spot time. The average cost on any TV station for any Spot, any Time of day is 50 cents per Spot and that same Spot might eventually get sold for as high as $1,500. Time Banks are sold in blocks of $5 million per bank--so unless you are a good talker and want to try to talk a Time BAnker into working with you, you will NEVER turn a prodit on Spot advertising. Don't waste your time with Per Inquiry TV Spots either--a total waste of time.

The time worth buying is half hour infomercial time. A full half hour costs about 1/10 of what a Spot(2 minutes or less) costs.

The problem is that if you buy infomercial time from an agency they will bid HIGH for that times---usually 20 times what you could actually get it at if you bid low. An agency is not motivated to bid low because their 15% would be low! Your best bet is to partner with an ad agency to air a 30-minute infomercial.

Bill SerGio





Bill SerGio


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Todd Terry
Re: New Client...wants it all
on Jun 8, 2008 at 8:31:00 pm

[Bill SerGio] "Spots are 2 minutes or less and are a worthless form of advertising."

Well, that's a pretty broad and, in my opinion, completely innacurate statement.

I don't get on a soapbox often, but I will now...

I've made a pretty darn decent living directing commercial spots, by this point many many thousands of them, over the past decade.... and 99.99999% of them were :30 spots. We manage to keep all our bills paid, my employees very well compensated and happy... and my clients provided with extremely effective advertising that works for them.

It all depends on what you are trying to sell. We've done our share of informercials, too, but they are definitely not my favorite kind of advertising. For one, the production values are typically lower. I know price ranges vary wildly, but if we produce a 30 minute infomercial for, say, $30K (an average guess for our shop), versus $10K for a :30 commercial, we are putting a lot more bucks on the screen per minute for the spot... which usually (although not always) translates into higher production values. Our profit margins are also much greater on spots than on infomercials.

Secondly, although I'm sure this is not true in all areas or for all advertisers, the potential clients that come to us wanting infomercial production tend to fall much more in the "slickster" or huckster categories than do those that come to us for :30 spots. The infomercial clients tend to want us to help them sell used cars, exercise videos, bargain hot tubs, or a variety of gadgets and tchotchkes that when you get right down to it most people don't need. I'm not deriding them as a client... we take their money and it spends just as well as the other clients... it's just that we tend to gravitate toward and are happier working for the type of higer-end clients that benefit best from :30 spots.

Although we do work for individual clients, the vast majority of our clients are advertising agencies... we work for probably a dozen or so of the bigger ones in our region. And I would say very few of them if any do much if any infomercial work at all... instead, :30 spots are their stock in trade. And I have say most of them seem to be rolling in the dough from those "worthless" spots.

To broadly characterize television spots as "worthless" is incredibly ill-informed.



T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com






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Bill SerGio
Re: New Client...wants it all
on Jun 8, 2008 at 10:27:16 pm

Hi,

I agree with you Todd... you can make a great living shooting and directing 30-second spots but that is called "Display Advertising" and not "Direct Response" which is what the other post referred to...

Let me define what I mean by "worthless"--they are worthless bedcause if you pay more than a $1 a spot you will never turn a profit over the cost of the media through an 800-number on a 2-minute spot.

All TV stations price their "Direct Response" Spots at 50% of the price of their "Display Spots." Large companies like Coke or Pepsi buy these worthless display spots to promote their "brand name."

If you want to air a direct response spot, then you can't pay more than $1 for a 2-minute spot on any station, on any day, in any tieslot. Run of schedule spots are worthless as a form of direct response. You must a 2 minute direct response spot AT LEAST 200 times on the same station, on the same day and at the same time before it will pull a single order. You can air direct response spots on a P.I. or Per Inquiry basis with stations but the income is very little.

I AGREE with you that producing or directing DISPLAY SPOTS for companies can be lucrative, but if you want to air a direct response spot with an 800-number then you can't buy the spots from the station--remember you bid on spot time and you don't "buy it."
To make any money with a Direct Response Spot you must cut a deal with a timebank broker and then your spots on ANY station and at any time will cost you about 50 cents each.

Since half hour TV time costs about 1/10 of what 30 seconds would cost you, why would any businessman buy anything other than a half hour if they have an 800-number and are trying to sell a product.

You are right when you say that clients with infomercials tend to be "entrepreneur types" and clients who want "spots" are larger corporations...

Bill







Bill SerGio


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Bill SerGio
Re: New Client...wants it all
on Jun 8, 2008 at 10:48:22 pm

Hi,

An ad agemcy would not be in business very long if it sold 2-minute "Direct Response Spots" with an 800 number because their clients would realize immediately that they were not making a profit.
Agencies lect to sell Display Advertising because their clients will never know if the advertsing made any money or not. The agency will present the Nielson numbers and that's all the executive of a publicly traded cares about--doing his due diligence to verify the media buy. If coke or pepsi ever put an 800-number on any of their Display Spots they would realize that they lost money on every buy!

Direct response is nothing like Display Advertising and your comment about "production values" being lower on an infomercial is correct but NOT for the reason you think--the lower the production value the higher the Pull Ratio of the infomercial. A set with a black background will pull FOUR TIMES as many orders as a beatifully lit set with a bookcase and flowers because there is no visual objection to distract the viewer from listening to the sales pitch. I have produced over 140 infomercials for my own products and I own several companies that buy and trade in bulk in half hour infomercial time.

Production companies are used to doing high end productions for clients to please their clients but "good-looking" infomercials rarely work. By work I mean that the show will pull over $4 in TV sales for every $1 of TV time on every station PER DAY--less than that is an unsuccessful infomercial...






Bill SerGio


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Mark Suszko
Re: New Client...wants it all
on Jun 8, 2008 at 11:48:55 pm

If there is one thing I will NOT abide, it's absolutists:-)

I don't know what to make of this new argument, however, I have seen plenty of "call this 800 number" spots on my local cable, all of the 30-second nature, scattered through all the channels and playing only once or twice in an hour on any one in particular. 30-second spots, with response needed to order. Yes, many of them are cheesy, others have a bit more production value. Same cable co. runs 30-minute informercials on a couple dedicated channels that I NEVER watch, in fact have deleted many of those channels from my remote.

How does this figure into your assertion?


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Bill SerGio
Re: New Client...wants it all
on Jun 9, 2008 at 12:26:33 am

Hi,

I don't see your point? There are a lot of 800-direct response on TV for many reasons. They may be placed through a timebamk broker so they only cost 50 cents each and therefore are profitable at THAT COST! When a client calls an ad agency and asks "How much will it cost to test my commercial?"... the agency will ask, "What it is budget?" and by coincidence whatever the client's budget is what it costs to test a commercial.... the same is true for what some production companies will they a client when the cllient asks "How much to shoot a commercial?" and the production company asks--what is your budget?

And because you see something on Tv doesn't mean it is making money!

For example, in the case of display spots, the comapny selling a product in retail must show the retail distributors a media schedule that they have spent so many dollars on spot ads in the area the product is to be sold--that money is a total loss to the company in almost every case.

I have literally shot and aired over 600 SPOTS for my own products and in every case I ran my spots through a deal with a timebanker so my cost per spot was always under $1...

Bill




Bill SerGio


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Mark Suszko
Re: New Client...wants it all
on Jun 9, 2008 at 12:35:25 am

Bill, I truly am not trying to bait you or anything, but after reading your COW bio I am very curious to see what kind of stuff you're actually selling and how you sell it. It would help me to understand your assertions on this topic a little better. Clearly, you are moving some product in profitable quantity. But how you are computing the costs and values is not clear to me. Can you point to some actual cases or online examples of the stuff you're doing?


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Todd Terry
Re: New Client...wants it all
on Jun 9, 2008 at 1:20:40 am

I certainly understand the infomercial theory as Bill has laid out...

But to contend that clients like Pepsi and Coke are throwing their money away on "display spots" is an asinine assumption.

(By the way... I'm guessing that is a well-known term in the infomercial world, but despite a couple of decades in the business and 11 years as creative director at my own shop I have never heard the term "display spot." Thinking I must be crazy I called two Creative Director buds -- one at a BIG agency -- and they had never heard the term either. Display ads in print, sure, but never heard it in TV. But I will use it in this posting for clarity's sake.)

Simple fact is that those "display spots" do work, and can work very well if effectively created and placed well. Coke, Pepsi, GM, and a thousand other big advertisers would not be spending billions of dollars a year on them if they didn't.

Before we moved into a bit more high-end stuff, our little company started by doing price/product "display spots" for grocery store chains throughout the southeast. Yes, those gawd awful spots. Yes, I fully realize they are barely one click above infomercials on the advertising food chain and they certainly never "make the reel," but they enabled us to start our company and get us to where we are. But the surprising thing about those spots is that they work. Advertise frozen pizzas at a "special price" (which might not be all that special) one week and they might sell 150 cases... as opposed to the usual 10 cases that week. I was honestly amazed to hear reports from the clients and their vendors as to how well they worked. I guess I'm a typical man... I never look at a price in the grocery store, I just put stuff in the basket... and I would never dream of driving across town to save a nickle on a jar of pickles, but apparently plenty of people do.

As for infomercials, outside the office I consider myself an "average viewer" and can't say that I've ever really watched more than a few minutes of one other than for the can't-look-away factor ("Wow, Chuck Norris' face sure looks tight"), and never considered buying anything from one (although I was intrigued by the Little Giant ladder, until I learned the price).

But I guess infomercials do work, or they wouldn't still be around in such mindnumbing droves.


T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com






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Bill SerGio
Re: New Client...wants it all
on Jun 9, 2008 at 1:58:53 am

Hi,

You said "Simple fact is that those "display spots" do work.."

Where is your PROOF? Show me any study that proves that spot ads work? You can't... But you can go to American Demographics magazine that publishes studiesa and find hundreds of studies showing that spots DON'T work.

There are 2 types of spots (ads that are 2 minutes or less), namely, "Display Spots" which are also referred to as simply "Spots" and Direct Response Spots which are always called Direct Response Spots and nothing else.

Advertisers are finally getting smart and realizing that spots are worthless--they spend the money on spots because they are forced to in order to satisfy their media budget minimum for distributors of retail products.

Agencies make their money by pleasing their clients and an agency really doesn't want to sell direct response spots because they client will know immeditaely that the ads were worthless!

Half hour infomercial time is called either "half hour avails" or "infomercial time" or long format time.

You can go to American Demographics and look up the studies for yourself.

If you want to sell direct through an 800 number then spots are worthless and if you want to amke any real money in the mail order business then you won't use any ad agency!









Bill SerGio


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Todd Terry
Re: New Client...wants it all
on Jun 9, 2008 at 3:52:19 am

[Bill SerGio] "You said "Simple fact is that those "display spots" do work.. Where is your PROOF?"

Hmmm, strangely enough I don't feel any real compulsion to provide you with any.. However... chiefly my proof is dozens of clients that use them successfully every day, that credit the success of their businesses to them, that see real tangible spikes in sales when they do advertise, and definite slumps when they do not.

[Bill SerGio] "Advertisers are finally getting smart and realizing that spots are worthless"

I guess that explains all those two-minute blocks of dead air that permeate television programs. How much again did they get for a :30 spot in the Superbowl?

I have no doubt that I could find "proof" (some kind of demographic studies or what ever) that "display spots" work, but I've got no interest in doing that and shall not bother... infomercial zealots are welcome to think as they please. The people that matter to me, my happy clients, already know they work.

It makes no difference to me if you think that spots are a waste of money... my efforts to contradict it thus far have only been to prevent the possibility of anyone else buying into this bunk. You can drink the "infomercials are the only smart advertising" Kool-Aid all you like, I'm aware I won't sway your steadfast "spots are worthless" opinion. I don't spend too much energy trying to convice doubters that the moon landings were real or that pro wrestling isn't legit, either.


T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com






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Bill SerGio
Re: New Client...wants it all
on Jun 9, 2008 at 1:42:42 am

Hi,

I got into the mail order business when I was young and teamed up with a man who owned the remnant space in 13,000 newspapers and magazines. He had signed these contracts to buy all of the unsold ad space back in the 1940s when nobody dreamed what the value would become. His cost for a full page in the New York Times was $4 and $6 for a full page in the National Enquirer. If you paid $50,000 for a page from the Enquirer you would NEVER turn a profit--you might gross $16,000, but if you partnered with me and my partner, we would put up the page and take 50% of the gross of the direct response. The bottom line was that if you wanted to make a profit in print direct response, you did business with my partner--or you could NOT make a profit.

That was my start in mail order where I learn that it was what you paid for ad space that determined if you made a profit.

When I started airing infomercials and spots I realized that what stations and agencies sold spots for was marked up so high that you can't make a profit so I went to the major time bankers. A time bank is a collection of 30 second to 2 minutes spots with a retail value of $5 million--that is the minimum. When you buy a timebank you pay an average of 50 cents per spot on any station in America and at that price you can make a profit with direct response spots--or you can per enquiry a deal with the timebanker--NOT with the station.

With infomercials it is much more interesting. I own a dozen ad agebcies that bid on half hour time in bulk and I apy from $15 to $150 for any half hour on any broadcast station in America or Canada.
Cable is even more interesting but I won't go into it here publicly.

I make my money by buying half hour time and selling it to ad ahencies or buy airing my own infomercials in that or buying syndicating national TV shows using my half hours.

Because a half hour costs so mucjh less than 30 seconds, it is a business with awesome potential.

I wrote a program that repakces media buyers and automatically bids on half hour time to 176,000 sources of half hour time in my database. There are only 1493 high power broadcast stations but the total number of good sources, not including worthless low power sources, is amazing. No human being could call or email or fax 176,000 sources of media and ask for avails--my software determines how much to bid for each half hour using an artificial intelligence module I wrote that assigns probability densities to each avail.

In this way I can get half hours for less than anybody else...

When you buy a half hour from a station or canle network you can air an infomercial, or an entertainment show or ahybrid of an infomercial and entertainment show. A national half hour that airs in all 50 states and reaches 37 million viewers costs me between $1,000 and $8,000 for teh best half hours NATIONALLY. A 30 second spot with that same time slot can be sold, depending upon the time for literally hundreds of thousands of dollars while the half hours costs less than $8,000.

I don't sell time to "clients"... I buy it for myself or sell it to ad agencies... A typical half hour I buy in bidding for $15 to $150 will be sold by an agency I might sell it to to their client for over $500 to $5,000 depending on the agency....

I don't have the patience to deal with clients and my agencies only buy and trade in bulk time packages.

For example, if I syndicate a non-informercial TV series I will paint the side of a truck green and shot it going by--a scene that I will repeat over and over. Then after the TV show or movie is finished--not an infomercial--I can sell out product placement where I insert a logo on the green side of the truck. Product placement is very lucrative....

Bill

Bill SerGio


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Mark Suszko
Re: New Client...wants it all
on Jun 9, 2008 at 2:01:33 am

Where can I see some of this work?


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