Saturday, January 05, 2002


The nature of my equations is the nature of everyone's equations: revenue - expenses = profit. That is as true for GM as SPP. I've presented the math for cost of acquisition through broadcast media. There seems to be a sense here, odd to me, that this sort of advertising doesn't work, but of course if that were true, QVC would be off the air and Procter and Gamble would be bankrupt.

Now you propose a system where, over some unspecified period of time, 25K extra boxes of tangerine Jello are sold, but you don't provide a sense of what it will cost to sell those boxes. How much is it to underwrite a site? To reach how many people, on average? Who will have what liklihood of buying a box of Jello? In what time frame?

If you tell P&G you have a way to sell more Jello, you'll be politely shown the door. If you tell them you have a way to sell more Jello for the same money they're spending now, you'll be told to take a number. Only if you tell them you have a way to sell more Jello for less than they are spending now will you be ushered into the marketing directors office. GM is no different than SPP, protest about the math how you may. It goes on the balance sheet as a cost center, and unless someone can explain how it improves profits, its a non-starter.


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