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Skip Rosell
October 11, 2007, 12:46 PM
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Question: What is the "Ad Media" or "Ad Product" you are selling ads in or on?

Comment: My experience has been that if this in an "Advertising" program...similar to placing ads on restaurant menus or Placemats... Advertisers will stop paying after they do not see a swarm of new customers coming to them as a result of your "Ad Program"....so a "monthly payment" won't work (my opinion)

Comment: "Factors" won't be interested in this unless you have an "AitTight Contract with a Clause that allows them to take the advertisers business if they don't make payments. Plus..."Factors" want, pretty much, a "Guaranteed Return"...or...they want a HUGE ROI...otherwise, why bother. These people are NOT "gamblers". They want "sure things"!

So...charge a "yearly or semi-yearly" fee and collect it in 3 payments;
1) 1/3 Deposit on Acceptance
2) 1/3 On Proof
3) 1/3 on Delivery

And...the prospects who told you to "See Me In The Spring"....forget 'em! IF you want to waste your time and visit them "In The Spring"...guess what they will tell you then? Yup. "See me after April 15"! After Tax Day they will tell you..."Whoops! We spent our entire Ad Budget! See me in the fall!" etc.

Don Alm

Hi Shane,

Thanks for asking about collecting payments for ads.

Don Alm has given you the best way of collecting on these advertising accounts but I have done one other way that worked on a monthly basis.

I collect one third down, one third on proof and the balance on start of promotion. BUT I have also done it this way. When a business bulks about that agreement I collect one third down and on approval of proof I make a monthly payment plan for the balance. If they pay off the second 1/3 by the time I am ready to print then I will print their ad and continue to collect the balance with monthly payments. That way if I get stuck for the last third I still sold the ad for 2/3's and I am happy. If they have not made payments to total 2/3's by the time I am ready to deliver, I place them in the NEXT printing.

So here is how this works out. If I am doing a town or zip code(s) every 6 months and I have 6 ads for each promo, I collect all the ad money from the ones that are willing to pay before printing the first promo. Let's say that is 3 of the businesses.

I then may have one or two that have paid 2/3's by the time of proof and the last one or two may have to go in the printing in 6 months from now.

Here is the breakdown by money collected. If all pay at $1,500 the promo brings in $9,000. If three pay and two pay two thirds by printing I have collected $6,500 and will collect the rest $2,500 in payments over the next 6 months. Let's say the last one sticks me but wants to go in the next printing. I have collected the down payment from them of $500 so I am stuck for $1,000. If they pay good, if not I have their deposit for my time and effort of making the proof and will not print their ad but continue to collect for the next 6 months until the next printing.

Worst case is I spend 15% of total which equals less then $1,500 and I will make a profit of $5,000 instead of $7,500. In hard to sell areas you some times have to discount the prices to sell the last few spots anyways.

This is just a neat way to make it look like you have given them an easy way to pay but you do not have to discount the ads to get their business. If all make the payments then you got full price for the promo, if not you will only take a small hit to your profits on the promo.

Best of success,

Skip Rosell

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