Profitmaker: Sponsor Point

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.

Another way a sponsor could use your video program is as a premium. For example, when a customer buys a case of oil for his/her outboard motor, he/she gets a coupon redeemable for your fishing video.

What kind of deal could you negotiate here? You could offer to edit a special version of your show that would include your sponsor's commercials. Feature your sponsor's logo at the beginning and end of the show ("Fishing In Tasmania has been brought to you by Castor Outboard Motor Oil, for when you really must be going."). Offer special packaging featuring the sponsor's logo.

You could sell a package of 25,000 units at a cost that would equal your production, dubbing and packaging costs plus $1 per unit. This would cover your nut and give you $25,000 in profit. If you had several shows in the can, you could work out a continuing sponsorship deal. Every four months or so Castor would offer another of your shows. Or you could run an offer inside the content of your program to sell the other shows in the series to the viewer.

Why is this deal worth more than the initial $25,000 in profit? Because Castor is going to get behind their premium giveaway such as national advertising, magazine ads, point of sale campaigns, flyers stuffed into the cases of oil, etc. Your video receives all this expensive advertising support it requires at no cost to you.

Your target market (people who fish) is getting thousands of impressions about your product for free. When the sponsor's campaign ends, there will be people who never got around to buying a case of oil who will know about and want to buy your video. You hit them with a direct mail campaign and reap the benefits.

This all sounds like a good deal, right? It almost sounds too good to be true, but only because you haven't heard about how difficult it is for an individual to put this kind of deal together. Odds are, you may get struck by lightning first.

You may have seen films being sold at unusual outlets, like fast-food restaurants (even the postal service sold a video during the holidays last year). Usually these are products from major Hollywood studios. These production companies have a publicity machine in place to make these deals, plus advertising budgets of their own for cross-promotion. Your machine may have only one cog and that cog looks like you. This means that you have to work much harder than the big kids with a smaller chance of success.

Before you even attempt to contact a potential sponsor, make sure that you understand what you are trying to sell them. The sponsor has no interest in your video. The sponsor is only interested in the people who will watch your video.

Does MacDonalds sell Disney films because the owners like to watch cartoons? Well, everybody likes to watch cartoons, but MacDonalds is more interested in pulling in people who will buy two Big Macs and two and a half Happy Meals per visit. If the reason these folks walk through the door is to buy 101 Dalmatians for half price, that's fine--as long as they have fries with that.

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