Keep the thoughts coming. I’m gaining some good insight at this end of the business.
Interesting how Nick new this involved politics. He must have remembered that from my previous posts.
Locally, I’ve done cable spots. Sometimes the cable company send me business on spots that are unprofitable for them to produce. When I’ve done local cable spots I either send them to the sales rep or I help them do the buy and simply add that to my package price.
Recently some people have been contacting me just to help with the buy (they usually have “self produced” ads (one might imagine the quality). I had been turning this business away since the buy was often small (on par with the fact that they “self produced” the ad) and taking any percentage wouldn’t amount enough to make it worth the phone call and paperwork time.
I have been approached recently by someone who wants to advertise statewide. It was through a recommendation (we know word of mouth works). It’s a lower budget client of course but higher budget than the others I’ve mentioned above. They can certainly afford a targeted statewide buy.
I’m curious about being a “recognized” ad agency though. Ultimately the cable companies want to sell their time so I can’t imagine them saying no to a buyer (unless it’s unprofitable of course). Obviously the bigger the volume (as “recognized” agencies can do) the greater potential for discount/markup. Keep in mind that political candidate ads are already “discounted.”
Wouldn’t worse case scenario would be that I get the client the “book” rate and charge the client for my services based on the buy?
Additionally, does one create a contract (and what does it look like) if the cable company gives you the percentage vs a contract with the client.
I see three business models (maybe more?).
1) Client pays me and I write check to cable company, taking my cut.
2) Client hands cable company check and another check made out to me for my fee and I hand check to cable company (assuring I get paid).
3) Client hands me check for cable company and the cable company writes me a check for percentage (how the “kick back” – I hate that phrase – works?).
It seems that since I’m not a “recognized” agency and this is not a local buy (those folks know me and certainly want me to bring them regular business) that (2) seems to make the most sense. In this case I would assume the client signs contract with cable company, I do the administrative work, and have a separate contract with the client for such consulting work.
BTW, I agree with Nick, since I am experienced in dealing with politics/political campaigns one always gets paid no later than on(before) delivery with such campaigns. Never allow a political campaign to owe you money.
Feel free to keep chewing at this. Thanks for your thoughts. Please do tell me about the various forms of contracts for such things too.
Given the nature of the beast, I won’t be able to monitor the airwaves for delivery but I would get (and have to trust) the cable reports on when aired (as I have done for local spots). I’m concerned about being in the middle of any discrepancies that may happen.