Our host and T.V.commercials...

joeykoins

I'm sure this has been posted before but why hasn't PCGS invest in T.V. ads? Won't this boost business? Come to think of it, there's not one grading co. that advertises, why not?

JJacks

joey,

This is just my guess, but:

First of all I think PCGS has just about all the business they can handle
Secondly, TV advertising nationally is very expensive. As far as local goes, they aren't like a local furniture store that sells almost all of their stuff in one area.

I think the large expense for any extra business they would get is simply not worth it.

JJacks

LindeDad

The users of their services is in effect a very small audience. Actual people that spend money on their services.

Silveraholic

Coin grading has appeal for a very small slice of the population. A national tv ad campaign would be a tremendous waste of money. Targeted advertising in coin mags and coin websites are a much better use of their advertising budget.

Elcontador

David Hall has been selling coins and bullion for quite some time, in addition to his involvement with PCGS. He knows what sort of advertising is the most effective for the dollar.

RedTiger

As much as collectors think the world revolves around their hobby, it is not that big, doesn't extend its reach very far. There might be 100,000 active U.S. coin collectors in the whole country. Maybe 5,000 of them, mostly big time coin dealers or auction houses, do 90% of the paid submissions. Buy TV time to target that 5k? Is there a bigger possible waste of money?

Coin grading is a small niche. CLCT (parent company of PCGS) has revenues in the $60m per year range, profits are 1/3 of that, and that includes the other divisions. As much as $60 million might seem, that's sardine size for a nation wide business. Compare CLCT to a medium-sized company such as Gap (the jeans company, symbol GPS). Gap has $60 billion in revenue, $6 billion in profits, that's about the size where buying regular TV time can make sense. 250 million people might buy a pair of jeans vs. the 5000 people that might submit a coin for grading.

joeykoins

<< <i>As much as collectors think the world revolves around their hobby, it is not that big, doesn't extend its reach very far. There might be 100,000 active U.S. coin collectors in the whole country. Maybe 5,000 of them, mostly big time coin dealers or auction houses, do 90% of the paid submissions. Buy TV time to target that 5k? Is there a bigger possible waste of money?

Coin grading is a small niche. CLCT (parent company of PCGS) has revenues in the $60m per year range, profits are 1/3 of that, and that includes the other divisions. As much as $60 million might seem, that's sardine size for a nation wide business. Compare CLCT to a medium-sized company such as Gap (the jeans company, symbol GPS). Gap has $60 billion in revenue, $6 billion in profits, that's about the size where buying regular TV time can make sense. 250 million people might buy a pair of jeans vs. the 5000 people that might submit a coin for grading. >>

I See. I guess Starbucks would also be that example also and the reason they too don't really advertise on T.V. that much. but think of it, PCGS should market their commercials on the family public as to giving a gift for that particular holiday something completely different! People (unknown so to be collectors) would might be interested in giving a new and exciting conversation piece to their loved one. ala, Grads,moms and dads, anniversaries,etc... Just a thought to enlighten the hobby maybe?

RedTiger

<< <i>

<< <i>As much as collectors think the world revolves around their hobby, it is not that big, doesn't extend its reach very far. There might be 100,000 active U.S. coin collectors in the whole country. Maybe 5,000 of them, mostly big time coin dealers or auction houses, do 90% of the paid submissions. Buy TV time to target that 5k? Is there a bigger possible waste of money?

Coin grading is a small niche. CLCT (parent company of PCGS) has revenues in the $60m per year range, profits are 1/3 of that, and that includes the other divisions. As much as $60 million might seem, that's sardine size for a nation wide business. Compare CLCT to a medium-sized company such as Gap (the jeans company, symbol GPS). Gap has $60 billion in revenue, $6 billion in profits, that's about the size where buying regular TV time can make sense. 250 million people might buy a pair of jeans vs. the 5000 people that might submit a coin for grading. >>

I See. I guess Starbucks would also be that example also and the reason they too don't really advertise on T.V. that much. but think of it, PCGS should market their commercials on the family public as to giving a gift for that particular holiday something completely different! People (unknown so to be collectors) would might be interested in giving a new and exciting conversation piece to their loved one. ala, Grads,moms and dads, anniversaries,etc... Just a thought to enlighten the hobby maybe? >>



PCGS has nothing to do with those kind of gifts. The U.S. Mint and a few dealers have more of those kinds of gift items, such as proof sets, birth year coins and sets, Christmas ornaments with coins in them, folders, albums. PCGS has little to do with gift giving. PCGS is primarily a marketing firm, that serves very wealthy dealers, seeking to add value for their wealthy clients. An ad in Barrons newspaper might make a little bit of sense. A regular TV ad, no sense at all. Might as throw the money away. 99.999% of the audience has zero interest in certifying coins, most have no idea what certification is, or is about. Just to get to square one, basic understanding of certification, would take several half hour infomercials, not a 30 second ad. Again, the main reason against TV ads, is that the coin hobby is a tiny in terms of national revenue, and smaller than a dot, in terms of numbers of collectors or potential collectors. Starbucks is fairly big, bigger than Gap jeans, but chooses to spend their marketing money in other ways.

My two cents on people that gift expensive collector coins to non-collectors, are that those gift givers are making a mistake. A lot of the time, those gift coins get cashed in at a local pawn shop for ten cents on the dollar the first time the young person needs money for a date, or a new video game. Same for collectors that build expensive sets for their heirs. Most of the time they are cashed in very quickly.

TwoSides2aCoin

Production costs of advertising for helping to secure added value subtracts from the bottom line, so it's counter-productive to consider even putting before a board, in my humblest opinion.

Kind regards

ms70

I can't picture their commercial being very exciting.

WTCG

<< <i>As much as collectors think the world revolves around their hobby, it is not that big, doesn't extend its reach very far. There might be 100,000 active U.S. coin collectors in the whole country. Maybe 5,000 of them, mostly big time coin dealers or auction houses, do 90% of the paid submissions. Buy TV time to target that 5k? Is there a bigger possible waste of money?

Coin grading is a small niche. CLCT (parent company of PCGS) has revenues in the $60m per year range, profits are 1/3 of that, and that includes the other divisions. As much as $60 million might seem, that's sardine size for a nation wide business. Compare CLCT to a medium-sized company such as Gap (the jeans company, symbol GPS). Gap has $60 billion in revenue, $6 billion in profits, that's about the size where buying regular TV time can make sense. 250 million people might buy a pair of jeans vs. the 5000 people that might submit a coin for grading. >>



Good analysis. Television advertising time is expensive, commercials are expensive to produce and the size of the target audience is smaller than minute compared to that of mainstream retail.

MGLICKER

A thirty second Super Bowl ad would be classic!

joeykoins

<< <i>A thirty second Super Bowl ad would be classic! >>

OPA

<< <i>

<< <i>A thirty second Super Bowl ad would be classic! >>

>>



unlikely @ $2million a pop per 30 seconds= almost one quarterly net income. .

joeykoins

Yeah, lets get Michael Jordan to sell PCGS!