Profitmaker: Sponsor Point

William Ronat
May 1997

The old cliché is: "Build a better mousetrap and the world will beat a path to your door." Unfortunately, this is mouse manure. The world isn't going to lift a finger (or continent, or whatever) to buy your video product--no matter how good it is--if the world doesn't know it exists.

You can go out and buy advertisements in magazines or run TV commercials on national networks to promote your product, and many people will become aware of your video. But this route could be more expensive and risky than your potential profits may allow.

Another way to get awareness for your video into the minds of buyers is to hook up with a sponsor. A sponsor is a company that will promote your video as a means of promoting the sponsor's product.

For example, let's say you have a script and are planning to produce a fishing video. You contact Acme Bass Boats to become the sponsor for the show. There are several ways that Acme could benefit.

• Acme could give your video away as a premium when a fisherman buys an Acme boat.
• Any boats used during the shooting of your video could be Acme boats.
• The Acme logo could appear on the packaging and titles of your video.
• Acme television commercials could run at the beginning and end of your video.

Will Acme Boats sponsor your video because they like you? Not likely (even as likable as you are). Acme wants to sell boats, period. If sponsoring your video will accomplish this goal, then Acme might do it. But remember that Acme has a wide range of traditional advertising vehicles from which to choose. And these vehicles can show how many fisher folk will see the company's advertising per dollar that Acme is spending. Companies buy advertising based on X dollars per thousand "impressions."

Being a wheeler-dealer, you have lined up a distributor to sell your fishing video to rental chains across the country. The chain has agreed to buy 10,000 units. If each of these videos rents 30 times each, with an average of 2.5 viewers per rental, the video will generate 750,000 impressions. At a cost of $25 per thousand impressions, your video would be worth $18,750 as an advertising vehicle to your sponsor.

Of course, this is just a guide. Your video is really worth what you can sell it for. In business, as in life, you don't get what you deserve, you get what you negotiate.

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