Monday, September 29, 2014

DD Marketing, Small Smiles Dental Centers: Double dipping?

In 2003 while dental centers owned by the DeRose family were coming under fire for abusive dental treatment of children, by North Carolina investigative reporter, Stuart Watson, South Carolina was gearing up to  not only allow the clinics to operate in the state, but also let the taxpayers foot the bill for the clinics advertising while it lured children to the torture chambers. School districts signed contracts with DD Marketing agreeing to pay them $48K per year plus 20% commission, and DD Marketing would work their hardest to recruit advertisers to assist in generating income for the schools.  By August 2003 the South Carolina school district was locked in a lengthy and complicated contract with DD Marketing.

First recruited advertiser, was Children’s Medicaid Dental Clinics—Small Smiles Dental Centers as we know it—who contracted to pay the school district $10K so they could hang 2 x 5 foot banners in schools and adorn school vehicles with signage.  In return the school district paid DD Marketing $6K for that first advertiser—$4K monthly fee plus $2K commission.

Problem? DD Marketing and Children’s Medicaid Dental Centers, were owned by the same people. Stink? Yes! Multiply that by nearly 200 districts across the county and that’s nearly $1Mil in additional revenue and it stinks way past “high heaven”.

Small Smiles Ad Scam

Vending machines were also allowed in the schools of which DD Marketing also reaped a hefty profit; need those to keep the patient flow up at the clinics, right?
Double dipping? More like Quadruple dipping in my opinion.

Schools Welcome Ads, March 5, 2003

“Pueblo, Colorado-based DD Marketing will receive $4,000 a month to recruit business and 20 percent of the proceeds generated for the district.”
“Mr. Paige Carlton - Tompkins, Kinard & Associates, an advertising and consulting service whose regional office is located in Columbia, South Carolina; Mr. Dan DeRose - President of DD Marketing, Inc.; and Mr. Mike Roumph - Vice President of DD Marketing, Inc. (DDM); made a marketing presentation to trustees. The company is located in Pueblo, Colorado and is a consulting service for marketing and advertising that works to meet the specific needs of government, public and private agencies, political organizations, corporations and individuals by developing a multi-faceted campaign to generate revenue for the client. The firm provides detailed research and analysis to develop partnerships for clients such as education, economic development, transportation, energy and natural resources, and environmental regulations.
The company is in the process of finalizing a contract with Richland I School District. The company has met with representatives from Berkeley County School District, Greenville County School District, and Lexington #5 School District. The company recommended packaging the district as a whole and negotiating an exclusive beverage deal that would result in income 4-5 times what the schools are receiving now on an individual school package deal. The firm would audit the commission that the district received each quarter on every machine to ensure that no mistakes were made and that every machine was operating correctly. The company currently has corporate packages in 39 states, in 192 school districts, and 4 different beverage deals in Brazil. The company would package deals with vendors and local business that would keep schools from constantly having fundraisers to generate additional revenue for the schools. Students in the elementary schools are selling candy, wrapping paper, and other miscellaneous items for school fund raisers and often have to go door-to-door to sell these products. Middle school and high school students sell advertisements for the yearbook and newspapers and solicit ads and support from local businesses. DDM would eliminate the need for fundraisers in the schools altogether. The company would establish corporate relationships that would maximize the income received by the district as a whole instead of individual schools soliciting funds from local businesses or conducting individual school fundraisers. Mr. Carlton said that the community would support a corporate partnership program that would eliminate solicitation by various groups during the school year. Local vendors would be able to include the corporate sponsorship in their budgeting process and could even pay the funds monthly, quarterly, or once per year. DDM would develop different levels of partnerships and would have a simple contract with the various businesses. The company would also audit and provide reports on the income generated by the various schools. Since the revenue would come directly to the district, the administration would determine how the revenue generated would be divided among the schools in the district. This marketing program would not interfere with any of the current partnerships that area businesses have with the schools, such as the Adopt-A-School Program or the High Performance Partnership Program. Mr. Carlton or Mr. Roumph would meet with the PTA/PTO and school principals to determine what fund raisers are held each year in the individual schools and the revenue that is generated by the fundraisers. This information would be used as baseline information to determine the amount of revenue that each school received on a yearly basis through their individual fund raising efforts. The company would also negotiate with a major beverage company such as Pepsi, Coke, or 7-Up for exclusive advertising rights as well as other snack or food vendors to generate revenue for the district. This type of marketing strategy would eliminate the nickel and dime fundraisers, keep students off the streets selling miscellaneous items, provide accountability for discretionary funds, and generate more income district-wide, which could be distributed to the schools proportionately. The firm would first complete an evaluation of the district and determine the most appropriate marketing strategy to generate revenue for the district. The firm would work closely with the school principals and club sponsors to maximize the amount of revenue generated. The firm would use a competitive bid process to contract major beverage and snack vendors to support the district through various revenue programs. A corporate sponsorship would be the backbone of the annual revenue-generating program. The company is a performance-based company that has a strict fee structure. The company would receive a monthly fee of $4,000 and a percentage of the revenue generated by the company for the district. Mr. Kirby made the motion to proceed with contract negotiations with D & D Marketing, Inc. to research marketing opportunities for Cherokee County Schools, seconded by Mr. Crosby. All trustees voted unanimously for the motion.”
The External Revenue Generation Beverage Contract was approved by the school board August 12, 2003.
“Approval of External Revenue Generation Beverage Contract was the next item on the agenda. The administration recommended that the district enter into an exclusive beverage contract with Pepsi Cola, Inc. Pepsi Cola submitted the best revenue-generating contract secured by DD Marketing, Inc. through the bid process. The district could also receive revenue through truckload sales and the Community to District Vending Program. Pepsi Cola will provide carbonated non-alcoholic drinks as well as non-carbonated non-alcoholic beverages nutritional drinks including fruit juices, fruit juice-containing drinks, and fruit flavored drinks, tea products, isotonic (Gatorade), fruit replacement drinks (sports drinks) and packaged waters. Mr. Kirby made the motion to approve, seconded by Mr. Crosby. All trustees voted unanimously for the motion.”

Coke Moves With Caution To Remain In Schools, September 3, 2003

“Backing out of contracts can be costly for the schools. In the Richland County School District 1 in South Carolina, for example, one high school made about $40,000 in profit when it sold both colas and noncarbonated drinks. When the district banned the sale of soft drinks, it was taking in an estimated $5,000 to $6,000 in commissions, according to an newspaper article in The State of Columbia, S.C. School officials have called that data incomplete, saying the numbers did not reflect an entire year's sales.”