in this issue
	Series "Art of War" by Sun Tzu The Direct Marketers Nightmare Create Something From Nothing Short Terms Loans and Interest Free Ahead of The Curve

The Direct Marketers Nightmare

The television stations require cash-in-advance payments for direct response customers, so marketers do not have the luxury of booking the media first, making a sale, and paying for the media later from the gross sales. Being held back like this left our clients vulnerable. The COPY CATS had a window of opportunity to "knock-off" the product, and start buying their own media. The client got bogged down in media budget demands, inventory demands, and business expenses to the point that a successful project was threatened due to lack of capital to fuel the success, and poor allocation of financial resources. Several of our clients became their own worse enemy, or their competition got the jump on them.

Create Something From Nothing

We decided that if our clients were going to be successful, they would need to be relieved of the heavy cash-in-advance media burden. So we created a financial instrument called media funding (today it is pervasive in the industry), and provide money for media even if the client would never be able to acquire this kind of credit through traditional means. It basically works like this. If an infomercial or direct response spot is successful-it produces more cash in sales than the costs associated with airing and fulfilling the offer-then it represents a valuable asset. An asset than could be considered worthy of a non-secured loan. This is the essence of media funding. One of our first media funding clients was a weight-loss client that was severely undercapitalized. They had created a commercial, bought product, set-up the infrastructure to run the business, and had about $10,000 left over for media buying. Their first airings were extremely profitable, so they had a hit on their hands but very little money to even begin to capitalize on their opportunity.

Short Terms Loans and Interest Free

So we offered this client short term loans with NO INTEREST CHARGE. All the client had to do was pay our company (who was the media buying agent) a 15% commission, and we would supply all of the media purchasing services plus loan them the money to rollout their infomercial: "no holes barred." Given the client had only $10,000 for media buying to start, within a 4 week period we were purchasing over $250,000 of airtime per week for the same client, and they hadn't spent one red dime in interest for that money! At best, they would have been able to acquire $100,000 in media in the same timeframe-had they relied on their sales profits alone, and reinvested a portion of those funds back into media. However, we put them 150% ahead of schedule in four short weeks! In 4 months we had loaned the client 3.5 million in media expenditures, and they had generated 7 million in sales. It would have taken the client 10 months to accomplish the same goal had they relied on reinvesting an increasing portion of their sales revenue only, and not taken advantage of our media funding program.

Ahead of The Curve

This is an extremely powerful tool, because it cost the client nothing in interest, and they got sales revenue plus market presence a full six months AHEAD of schedule. It was virtually impossible for anyone to copy their concept and launch a product. The client had captured their market. The presence of this product was everywhere, and there was a "bandwagon effect" in place. People were buying it, because it was HOT! This bandwagon effect had a full six month's worth of life left in it, because we had saturated the market so quickly. The public had no time to start looking for something else-we were the only game in town! Next Week's Issue The Mechanics of Media Funding »