NAB reports (Jan-Dec 1941)

The following letter was received this week by the NAB Department of Broadcast Advertising: Dear Mr. Pellegrin: In the NAB Reports of April 11, 1941, page 33S, there appears an article headed “Advertiser Threatens Suit.” I think that our experience with this same advertiser, the Mendenhall Mfg. Company, might prove of interest to NAB and to all NAB member stations. We would ask, however, that all references to this station be omitted if you see fit to publicize our experience. ■About January 16th or I7th, we were approached by the Mendenhall Mfg. Company for rates and available spot time. There was no least hint that this company desired P. I. rates and we had no suspicion that it sought time on a P. I. basis. In our reply of January I7th, we quoted our rates and available time on a strictly card rate basis. Replying on January 24th, the Menden¬ hall Company wrote as follows: Dear Mr. : Replying to your favor of January 17th, please enter our order for 300 announcements of the enclosed continuity at $6.60 each, to begin at your earliest convenience and to run daily on your 7:40 a. m. spot and Sunday on the 12:59 p. m. spot. Thanking you, I am, Very truly yours, (Signed) Spurgeon Pickering, Mendenhall Mfg. Company.” We were not content with this blanket order for the spots and under date of January 29th, we sent our regular contract with the times and number of spots clearly stated together with the unit price. One paragraph of this letter was as follows: "We are enclosing our contract form made out in duplicate in accordance with provisions in your letter. Will you please sign and return both copies; the duplicate will be accepted by this station and returned to you for your files. Although your letter is considered our authority to run the announcements, it is a station policy in all cases to have our contract forms duly signed in order that we have a permanent record of our mutual under¬ standing in our files.” We have had a large number of complaints about the non¬ delivery of hosiery to those who sent in letters with the requisite price and which were forwarded to the Mendenhall Company. Again and again we urged them to be more prompt in delivery, at the same time sending our regular weekly bills for their in¬ debtedness to us. .After six weeks, we ceased broadcasting the spots as we had not been paid. Finally, about two weeks ago, our manager succeeded in getting Mr. Spurgeon Pickering on the telephone and told him that unless we had a check within the next three days we woufil short-rate him and institute suit. Mr. Pickering promised faithfully that we would have the check. But no check has been forthcoming. Finally, on .April 9th, we wired him as follows: “Molding legal summons forty-eight hours. Stop. Must have check in full for account. Advise Western Union.” Back came the following answer: “What in the H do you mean legal summons. Your city is not place for a summons. I am not any novice in business. In the first place you had no right to run my announcements without pulling four returns for each dollar.” It scarcely seems worthwhile to institute suit as the case would have to be tried in Mississippi anrl the court costs, attorney’s fees, etc., would amount to more than Mendenhall’s indebtedness to this station, namely ,$277.20. I suppose, therefore, that we shall have to take the Ijeating. It seems to me that these and similar cases of bad faith and crookedness on the part ol advertisers should be handled by some appropriate dei)artment of N.AB, If some sort of insurance plan 354 — April 18, 1941 under which stations would pay NAB a definite premium were set up for the conduct of such cases and the prosecution of wrong¬ doers, it would be for the benefit of the whole industry and, at the same time, estop such practices on the part of unscrupulous individuals. Had this station management ever suspected that Mendenhall was a P. I. account, it would not, of course, have even considered taking the Mendenhall spots. We would be very much interested in knowing what may be the ultimate outcome of the case you published in the April 11th N.AB Reports, page 335. Likewise, we would like your advice as to procedures other than prosecution by which we might obtain a part, at least, of what this firm owes us. Respectfully yours, (Signed). NAB replied as follows: Dear : Your letter of .April 14 regarding the Mendenhall Co. poses some interesting problems which have had the serious study of our staff members here. Russell Place, NAB Counsel, advises that legal action would have to be instituted by your attorneys in Mississippi; that the likelihood of your recovering would be slight, and that the expenses of legal action would entail further loss. Nevertheless, you would like to obtain at least part of the money Pickering owes you, and the only practical suggestion we can offer at this time is for you to take your record of response on this account, and submit a bill to Pickering based on four returns per dollar, since he has already admitted his indebtedness to you on that basis. Although this would not cover the full amount of your bill, and although you definitely did not understand this to be a P-I account, that is one practical way for you to recover at least part of your costs without further expense. We cannot emphasize too strongly the necessity for stations to secure credit ratings on unknown accounts of this type, to avoid sad experiences such as this. One station to my knowledge handled the Pickering proposal as follows: On receipt of his original offer, the station replied that announce¬ ments could be bought only at card rates, and quoted its price for a month’s service. Pickering accepted and authorized the station to proceed. Unable to learn his credit rating, however, the station requested payment for the month’s service in advance. This was never received — and the announcements never went on the air. The station did not lose any money ; its listeners were not dis¬ gruntled by slow delivery of merchandise ordered, and Pickering did not get the benefit of “free” radio advertising. Procedure similar to that should, we think, be followed in all such cases. A slight amount of “business” may be lost by rigorous adher¬ ence to such procedure, but in the long run collections will be higher, expenses less, listeners better served, legitimate advertisers protected, per-inquiry dealers and outright chiselers effectively discouraged, and the ultimate best interests of the radio industry and advertising in general better served. Your suggestion for the establishment of some sort of insurance plan is being referred to the NAB Board of Dirctors, to be con¬ sidered at their next meeting. Sincerely yours, Frank E. Pellegrin, Director, Dept, of Broadcast Advertising. A retiuest for free time has been reported by several memlicrs from the “Society of Inter-American Relations, Sociedad Fanamericana, Quito, Equador.” This organi