Question: Why do I need media funding?
Answer: Media is always the biggest single cost in a direct
response television, radio or print campaign, but almost all the media agencies and broadcasters
require pre-payment, and tie up your money for about three weeks. If you are spending $100,000 weekly
(which is a modest success) you will need about $300,000 available in cash just to maintain your
media schedule. You will need even more if you want to expand your campaign. In either case, Media
Funding provides those funds.
Question: How much will your service cost me?
Answer: We discount your media invoice before we pay it. After the media runs,
we collect the full amount of the gross media spent - including the discount - from your cash flow. The discounted
amount is our fee. In other words, out fee is included in the customary fifteen per cent media agency fee. We have
been in business many years, and have this discount arrangement in place with virtually every agency in the DRTV business.
If your media agency commission is less than fifteen per cent, call us for a quote.
Question: Is the money I get a loan?
Answer: Yes. It is a loan to your company, guaranteed by your
infomercial campaign. Unlike traditional lenders, we know what a successfully tested DRTV campaign is
worth. We treat it as valuable collateral, and we are prepared to lend against it.
Question: Do I have to personally guarantee the loan?
Answer: Your only personal guarantee is against fraud, meaning you
try to divert money out of your regular flow of credit card processing into your merchant account,
or hiding significant problems in your campaign which negatively effect results.
Question: We are a start-up. Our campaign has tested
successfully, but our financials, at best, are kind of thin. Can we qualify?
Answer: Yes. We want you to run your business ethically and
efficiently. Keep inventory on hand. Control your returns and chargebacks. And maintain an MER of 1.7
or better. Financials are of secondary interest to us.
Question: Where else can I borrow a few hundred
thousand dollars for media without putting up a personal guarantee?
Answer: When you find out, let me know.
Question: What media do you fund?
Answer: TV, radio, print, and direct mail and Internet.
Question: I do not have the money I need to roll out,
but some companies in the infomercial industry have offered me distribution deals where they run the
infomercial for me? Should I take one of these deals?
Answer: The good thing about distribution deals is that you
will be turning over the work of managing your campaign to a third party, and if the campaign is
very successful you will make some money without investing a lot more time. The downsides are
twofold. If your campaign builds steam slowly, or falters, most companies will quickly move on to
the next distribution deal, and you are out of luck. They also come out ahead if the campaign is
successful, because they will keep a minimum of fifty per cent of the gross profits. Doesn't seem
right after you have shouldered all the risk of product development and video production.
Question: Yes, but they will pay all the costs.
Answer: If you contract with Media Funding to pay your media bills,
and get terms on your inventory, you should be able to cover your other costs of sales from current cash flow
without giving up equity in your company, or loosing control of your campaign.
Question: So I combine media funding and inventory funding?
Answer: Yes.
Question: I am planning to offer an easy payment plan,
which is going to impact my cash flow significantly. Where can I get help with that?
Answer: If you offer an easy payment plan, you may end up in a
cash flow crunch that will make it difficult to pay for your media and other campaign bills.
We can help with our media funding with extended terms.
Check it out.
Question: My offer includes a continuity program,
and that is where I make most of my money. Where can I get help with that?
Answer: Some marketers use extended payment terms to finance
their media from continuity revenues. Check it out.
Question: Where can I get more information about how to be
successful in the infomercial industry?
Answer: After putting the Suzanne Somers's ThighMaster campaign together,
and running it successfully, I wrote a memoir about the experience, which is also a how-to. It's called
'This Business Has Legs'. Check it out here on our website. You
can also use our Links section for the web site for the Electronic Retailing Association, which has a
bookstore with other books about the industry. The Links section will also bring you to some other useful sites.
Question: Are you available for consultation?
Answer: I'll talk to you on the phone, and try to steer you in the right
direction. I don't charge. Give us a call now!
|
