How to Get Ripped Off!

Someone emailed me his plans for marketing a product using television. He told me that he wanted to spend a few thousand dollars making a commercial, then run it, starting in his local market. He planned to go out and raise money for the project and he wanted to write the script for the TV commercial himself. He was interested in hiring me to produce and place it.

I told him that, in my experience, there was little hope that he would make any money this way. Product commercials (as distinct from commercials for local services) usually require national or regional play to work. Even then, most of them are not successful. For every product commercial that works, there are ten or more that only make money for the production company or ad agency that produced it.

In a postscript to the email I sent this person, I penned a little "What can happen to you" scenario, as follows:

Imagine that, instead of telling you what I told you, I had told you something like this:

"This is my business. I know how to make these things for a fraction of what the big ad agencies charge. Not only that, I have deals with cable companies and TV stations so that I can buy spots for much less than you can. I buy them in big lots, wholesale. So I can put together a package deal for you -- production plus airtime.

I like the looks of your product and I think you have a shot at making -- within the first year -- 10X, maybe 100X, what you put into it. Some people have made a hundred thousand dollars a month doing this! It is just an incredible business! It is a wonder more people have not caught onto it.

So what I will do for you is make a commercial for you, along with a beginning placement package of 100 spots for a total cost of $5000. Half up front, the other half when the spot is made. After that, you can either take the spot to one of the giant agencies and show them how you are already making money or you can let me continue to place it for you."

You are overjoyed! You borrow the $5000. You think your fortune is made!

When I get your $2500 up front, I go into the studio and make a spot that costs me $500 to make. You want to write the copy yourself -- fine, no problem. In fact, I tell you, "Most of the big moneymakers have been written by the advertisers themselves -- it adds to the authenticity and doubles the calls!"

You have no idea that I've just made $2000 and you haven't even paid me the 2nd half yet. Then you pay me that money and I place your spots. I buy a few daytime spots in your local area on regular channels, a few primes on cable channels and a ton of overnights for which I pay as little as a dollar or two each. The 100 spots, mostly of very low value, cost me $1500. So I have just made another $1000 from you + my 15% agency commission from the TV stations on the $1500 ($225).

At this point, you have your commercial (which may look pretty good, actually) but no calls to speak of (maybe no calls at all), you are out $5000 and I have made $3225 pure profit for possibly 2 days of work, max. You complain about the lack of calls and I just say, "Hey, I did the best I could. It doesn't always work." My friend, you are screwed.

I am not a thief or a con man so I don't do this. But unfortunately, that is the way the TV ad business often works. And this is a relatively small money example. Advertisers with bigger budgets get ripped off for hundreds of thousands of dollars, millions of dollars, every day! Don't let it happen to you!