Even Though Remnant Advertising Can Be Cheaper, It’s Probably Not The Best Solution For You.

Written by Rich Harshaw

Rich:

We are members of an industry peer group and heard about buying radio & TV on an auction bid buying basis; we’re considering trying it ourselves. The company in our peer group says they tell the stations the price they’re willing to pay and then the stations run the spot when they have remnant space, open spots, etc. They say they have had fabulous results with this program, receive excellent placement and pay about 60% less. Have you dealt with this before? Do you have an opinion?

Sincerely, Rebecca

Hahaha! Do I have an opinion? Do I ever NOT have an opinion?

First of all, for those who don’t know or aren’t familiar, remnant buying simply means you buy unsold advertising space at a discount. Remnant space can be found in newspapers, magazines, radio, and television. The publication or station figures it’s better to sell at a discount than not at all. If you go directly to a station, you’ll have to learn the “secret knock” because they’re pretty much never going to bring it up—think about it! Why wouldn’t they want to just sell you regular (read: full-price) space?

There are some agencies that specialize in remnant buying, and if you choose to go this route, you’d probably be smart to go through one of these. Find them by simply Googling “remnant advertising brokers.”

Pros & Cons: Naturally, the advantage is that you can buy the space for less money. The cons are that you have very little control (sometimes ZER0 control) of when your ad actually runs. The biggest, con, however, will be covered in detail below: you can’t consistently reach the same audience, so it’s really hard to build up any brand awareness over time. Consequently, you should think of remnant buying as a DIRECT RESPONSE vehicle, not a long-term advertising solution.

I’ve used remnant buys plenty of times in my career—most notably in 2003 & 2004; we used to buy sixty-second spots on the Rush Limbaugh show for $13,000 (broadcast on 530 stations) instead of the much more expensive regular rate of about $24,000 (at the time). We were generating leads for a business opportunity at the time, and didn’t particularly care when the leads came in, so it was a good fit. Sometimes a couple of weeks would pass with no availability, then sometimes there would be 2 or 3 spots available in a single week. It was very hit and miss—that’s the hallmark of remnant advertising.

Recommendations: If you’re a long-term advertiser, however, remnant buying is probably not a good solution. This was the main point I wanted to impart to Rebecca. It’s a matter of deciding what your long term goals are—and for most companies, long-term goals should be to build up a recognizable brand in the marketplace that people automatically know to call when they have a need for your services—as a result of their repeated exposure to your advertising over time.

To be sure, part of your budget should be in “hunting” mode—direct response mode: Spend money today, get an immediate return. And as stated previously, remnant is a good way to accomplish this. But if your company is $2MM or more, you need a good portion of your budget in “farming” mode so you can consistently reach the same people over and over again. You’re trying to create a dialogue with them so they know who you are and why they should buy from you WHEN they become ready to buy. You aren’t just generating business for today; you need to be generating business for 2015, 2016, and beyond. Your ability to accomplish this goal is greatly compromised if you’re popping in and out of stations and publications all the time.

Which brings up another important point I need to address from Rebecca’s original question: She claims that the company she heard about this from is “receiving excellent placement and saving 60%.”

I find this essentially impossible to believe. 

If that’s true, then you really are not buying remnant at all; you are simply paying the actual going rates. Think about it—why on earth would any publication or station consistently sell you premium space for 60% off their normal rates? They occasionally will, sure. But consistently? Extremely unlikely.

If it is true, then they are in reality just lousy negotiators. They would be MUCH better off negotiating a long-term deal at the same rates (or even lower because of duration of contracts) that allow them to consistently be on those stations so they can effectively nurture those prospects. That’s a good solution, it’s just not called “remnant buying.” It’s called “buying advertising.”

You know what they say, right—if it’s too good to be true, it probably isn’t true.

Remnant buying can be an important part of your media plan, but realistically, for most contractor marketing, it should be no more than 15% of your budget, and probably much lower… maybe even none. If you’d like to discuss this in more detail for your company, please don’t hesitate to email:rharshaw@mymonline.com.

© 2014 – 2016, Rich Harshaw. All rights reserved.