Media Joint Ventures

10/21/2013

Purchasing television airtime requires a substantial amount of upfront capital. It is therefore common to seek joint ventures to finance your media buys.

Entering into a joint venture with a TV station simply means that the station is willing to extend you the airtime in exchange for a percentage of your sales. Or they will finance you for a flat fee based on units sold or inquiries generated during each airing.

Since TV stations rarely advertise this aspect of their business, you may have to call a number of them to find those who accept per order (PO) or per inquiry (PI) deals.

There are also media brokers who put together similar deals. Service bureaus who broker turnkey infomercial projects also have access to TV stations that will do PO/PI deals. See the listings at the end of this Guide.

Regardless of which route you take, you will be required to produce customized material that shows an 800 number exclusive to the TV station on which your material is being aired. This will allow both you and the station to track the number of leads or sales generated by each airing.

Per Inquiry

If you have a lead generation DRTV spot, some TV stations, particularly those with huge inventories of unsold commercial time, will accept payment based on the actual number of leads each airing of your ad generates.

Per inquiry deals are usually confined to 1 and 2-minute DRTV spots. TV stations seldom extend half-hour airtime for a lead-generation infomercial. If they do, however, expect to pay a premium for each inquiry you generate with each airing.

Some stations may require a guarantee to run your DRTV spot on a per inquiry basis. For example, if you agree to spend $1 for each inquiry, the station may require you to give them $300 in advance until you've generated the equivalent of 300 leads.

Per Order

Per order deals are usually available for both DRTV spots and half-hour infomercials. With per order advertising, the station may charge a fixed amount for each unit sold or a percentage - between 30% and 75% - of the gross value of the product.

As with per inquiry deals, some stations may want a guarantee before they air your infomercial or DRTV spot. The guaranteed amount is usually based on the percentage the station expects to earn from the selling price of your product.

For example, if your product sells for $100 and the station wants 50%, the station will want a guarantee based on $50 per unit. If the station asks for $1,000 as a guarantee, it will run your infomercial or DRTV spot until you've sold 20 units.

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