'Sex Alert'
a marketing story (page 2)
by Philip Goutell
© 2023 Philip Goutell
I now had my work passed around through several members of the firm and finally was given a go-ahead for the concept. But before I could get my Sex Alert knockoff back on track, there was still the matter of the lawsuit brought by the model from my original ad.
The ad itself used a headline stolen from a former client, only instead of a small three or four inch ad, mine was now a full page in the New York Post. It seems that the husband of the model was having dinner with a client the night the ad came out and, as the male model worked for the postal service, some jokes were made about his wife having an affair with the mailman.
The photographer, who later because best man at one of my weddings, had scouted the models from an agency he did business with. He too was named in the suit, along with the publisher. He was surprised by her being so upset — she had posed nude for him and he still had the negatives — but he too had to defend himself. I was now being represented by a woman from Gleeson's office.
The judgment went against the model. The judge, also a woman, commented that the model had posed, had signed a release, and had been paid the fee her agent had negotiated. End of story. At one point in my deposition the model's attorney had asked me if we had ever had any trouble over the ad. I was prompted to say "no" as, in the mail order business, all this legal stuff was just business as usual.
Now a revised ad was prepared, to clean up some of the issues that the New York AG had highlighted. And a new model was hired to replace the one who had sued. The new model came from the same agency. During the first model's lawsuit her lawyer had gotten a statement from the owner of the model agency saying that if he had known what the ad was, he never would have provided a model. So we showed the new model where her picture would go in the ad and had her sign it. She had no problems signing.
Advertising in the New York Post had a limited reach and a plan was now formed to convert the ad into a direct mail (junk mail) piece. I recruited an artist I had worked with before to do the artwork and make the "mechanicals" — the boards that go to the printer. A printer had given us a quote and we were almost ready to roll. But printing cost money and list rentals cost money so some money had to be provided for the project. Only later did I give some thought to the process we went through to finance the project. At the time I was just happy to be moving forward with the prospect of making some money for myself.
The plan now was that I was to take out a bank loan for $100,000 or $200,000, I can't recall. I was to alert the bank that I would be coming in with collateral so please have the papers ready. At the time I had about $20 in my account. The bank manager didn't take my request very seriously. But accompanied by Tom and Jerry (not their real names) we headed downtown and fetched some bearer bonds.
These are bonds that act like cash. There are no names on them. The money goes to whoever possesses the bond. So, with the bearer bonds we headed back uptown to my bank and presented our loan request to the manager, offering the bearer bonds for collateral. Out came a yellow pad. A loan agreement was drawn up. The bank got the bonds and I got the loan. The only loan document was just that sheet of ruled yellow paper.
Some years later I would learn that the bank had been in some trouble with the feds, over money laundering as I recall, and this may have been an example of it. At that later date this bank wouldn't let you deposit a check — not cash, a check! — for $10,000 or more without an officer's approval. Very weird.
But now we had money so progress was being made. The artwork was sent down to Baltimore for printing and the mail service had the lists ready to process. Then we got a call. The printer wouldn't print. Why? Because they had customers who printed Bible stuff and the Bible customers would turn away from them should they print my ad. This came after their sales rep had seen the ad and thought it was fine! So now we had to find another printer. I'm not sure who we found but I know one of the printers we did use at some point had gone to jail for printing record jackets for pirated albums, but I don't think he was involved with this job.
The job did get printed and the brochure did get mailed and it was profitable. This was the beginning of a business that grew over the next few years. The Sex Alert ad morphed into a string of ads, one after another, some more profitable than others. What was making it work besides the ads themselves was the expanding universe of names we were able to rent for our promotions. A deal had been worked out by Max to take mailing lists — large lists -- that had only a portion of names in the age brackets we wanted -- but, with the list owner's permission Max would have the lists sorted into age brackets and give this enhanced information to the list owner, meanwhile only paying to rent the names that fell into the right age brackets for our promotions. This allowed us to acquire hundreds of thousands of profitable named that would not otherwise have been available to us.
My mentor once told me that he wanted a business that grossed no more than $300,000 a year and netted the same. His reasoning was that this would make the business too small for the authorities to bother with. We had long since passed the $300,000 mark and the authorities were again taking an interest.
I forgot exactly how the reckoning started but suddenly we were getting notices that out incoming orders were going to be blocked and our latest and most profitable promotion was going to be shut down. Lawyers to the rescue. Negotiations. A possible solution, the kind that only lawyers can devise.
Our orders were coming in from both ads in magazines and what the public would call "junk mail." For us, the problem had been that there were very few magazines we could advertise in profitably. On the other hand, thanks to Max's work with list owners, the potential universe of prospects from mailing lists was enormous. So a deal was struck. We would agree that our ad, as it appeared in magazines, was indeed fraudulent. For this concession the government — the Postal Service — would agree that our junk mail brochures were not fraudulent. The ad was the same in both media.
Now of course this result was pleasing to us and it later turned out that orders coming from magazine ads were never blocked, perhaps from a small oversight; perhaps because the order never made it through the bureaucracy. Even our lawyer was surprised by this.
And there were surprises at the post office. The deal was too good — for us — and their lawyer's supervisor refused to sign off on it. That might have been the end of it but for a move by our lawyer. She sued the government for reneging on an (oral) agreement.
Now legal experts came out of the woods telling us that this couldn't be done. An oral agreement is nothing. We had nothing. That's what the Justice Department said. The Justice Department handles litigation for federal agencies getting sued. The Postal Service is among their responsibilities. But something went off track. The Justice Department was representing — defending — the Postal Service but the Postal Service wasn't taking the suit seriously. The Justice Department wanted to be done with the case so they came to us. Here's where things got really crazy.
Government agencies can disapprove of a company's advertising but they can't approve of it -- usually. We were now offered an opportunity to prepare and ad which would be attached to a settlement document. In short, if we wrote an ad that passed Justice Department and Postal Service scrutiny it would be certified OK by the US Government. Our troubles would be at an end and we could go on making money forever. But, as it turned out, it would be up to the postal service to "certify" the ad as acceptable. Our regular adversary from the Postal Service would be reviewing the ad; I would be writing it.
In thinking through what I would write, I was thinking of negotiations. There had to be something that we could give away, so, in writing the ad, I put in obvious candidates for removal, claims that were so ridiculous that they could be spotted easily. They would stand out. Then, while the lawyers argued over these claims, they would hopefully overlook some of the more modest claims that I wanted to make. This seemed like a reasonable strategy but I had made a major miscalculation. The government's lawyer had a daughter, a daughter who aspired to be a lawyer. She may have already been on her way. But in age she appears to have been close to the age to that of my own lawyer. I sat in the room when the two lawyers "reviewed" the ad, word for word, over the phone. The dialogue went something like this:
"Now Eric, you couldn't possibly have any objection to this..." and she would read a slice of sexually charged imagery. Through the wire of the phone you could almost feel her adversary's face glowing red. He was too embarrassed to say anything, too embarrassed to argue or discuss. Too embarrassed to object.
And so it went, line by line. Nothing was removed and this was the ad copy that would be attached to the settlement giving us the government's protection, if we used the ad as it was. Any changes and protection was lost. Soon we hit an obstacle: Old Farmer's Almanac.
Now that the feds had certified our new ad as being "clean," we could advertise in magazines again and one of the magazines I wanted to advertise in was The Old Farmer's Almanac. But Farmer's Almanac recognized something that our adversaries at the post office had missed. Now that our ad was certified legal, it was totally fraudulent. What to do? To change the ad would be to take it out from under government protection. To leave it "as is" would mean the publication wouldn't run it. Betting that any changes by Farmer's Almanac were not going to bring us back under the government spotlight, I made the changes. No problems arose.
And so we continued, selling many thousands of bottles of our pills. As time went on, fewer claims were made leaving it to a simple photograph to tell the story. Friends who saw the ads marveled that anyone would buy from these ads. Some were pretty stupid. But they sold pills, without controversy. All thanks to apricots from Hunza and an orphaned ad for a pill called "Sex Alert."