Costing and Negotiation


So, you’ve done your homework, picked the right buyer for your needs, know exactly what type of media you are going to buy for your marketing campaign. Now, it is time to consider costs before you make a definitive purchase. For starters, you need to know how media is bought and sold. Normally, you would send out a request for proposal (RFP) to Advertising and media planning agencies which will respond with their standard and bulk rates for, say radio spots, newspaper advertisements or any other media. You will either get a fixed monthly rate based on your needs, or a bulk rate for ‘x’ number of spots in various categories. If your marketing plan is a bit more complex, you might even get on a call with a representative who will take stock of your needs and craft you a customized plan.

However, in the last decade or two, digital analytics (which is where the world is moving) has ramped up the game. Spots are sold on the basis of ‘payable action’ which means the user interacts with the ad or does ‘something’ in order to justify a payment to the publisher/distributor. So, now, you pay either cost-per-mille (CPM) , cost per click (CPC), Cost per lead (CPL), or you buy in bulk say, the cost of a thousand viewable ads (i.e, you pay for 1000 ads that are viewed by the target audience. What you end up buying will depend mainly on your budget and campaign needs.

The great thing is, such analytics are becoming more pervasive in the offline world as well, as newer technologies and artificial intelligence are increasingly being used to say, gauge the number of people that pass by a digital display, or gauge the traffic of a particular public place -  and use these metrics to figure out the costing of a particular offline spot. Although these changes are exciting, it can be daunting trying to figure out which advertising space if the best for you. Here is where an experienced Gainbuzz agent can walk you through the process so you can make an informed buying decision - both online and offline.

When you approach any advertising agent, be sure to go with your own agenda and well-researched plan. However, be flexible enough to know when the agent gives you good advice on alternative strategies or points out flaws and suggests changes in your plan. Below are some of our tried-and-tested tips for negotiating a great media buying bargain and to ensure that your collaboration results in a win-win situation:

Have a plan

Having a strategic plan like we discussed in the Campaign Strategy module can literally make or break your advertising campaign. No strategy could lead to chaos as you end up spending in all the wrong places and fail to see results despite heavy marketing spend. On the other hand, having media buying strategies listed out for every medium can be both tedious and time-consuming as the complexity involved I pre-deciding which advertising avenues work for you can be a huge challenge. Most businesses learn through trial and error. However, when the trial and error experiments are shaped using a strategic plan, your chance to grab audience attention is much higher.

Negotiate like a pro

Advertising, like any other profession is a community filled with jargon, different modus operandi, and a specific way of interacting inter professionally. In order to succeed in an effective and beneficial media buying exercise, you must be able to negotiate specifics such as:

Knowing the Base and Fixed rates.

In order to make a smart purchase, it is crucial to know what you are going to spend on a particular media vertical. It is important to know what you’re going to spend on a particular media channel. Normally, the agency will give you a standard base rate based on your volume. This base rate will help you approximate how much each of your advertising vertical will cost you as a general ballpark figure.

Using your clout to dangle a carrot

Media agencies bow down to businesses with higher volume. Generally speaking, the more volume you have, the higher your bargaining power. Current needs aside, you can also use your clout to offer a future commitment if you foresee growing needs in order to make your negotiation more persuasive. Usually this means giving a ballpark commitment on media spend in a particular media channel. This is the best time to set  and voice a minimum expectation in regards to discounts, perks and value additions within your media buying relationship.

Build collaborative relationships

Extensive marketing campaigns work best when you treat the media agency as a partner rather than a provider. Does this sound counterintuitive when you are trying to drive a hard bargain and negotiate the lowest price possible? Perhaps, but treating them like a partner works because the media providers are veterans of the industry and if you build a good relationship with them, they will give you ideas as to what sorts of marketing activities will give you the most returns. Listen to what they have to offer- it might lead to the best media deal you have ever negotiated. Novice buyers have this perception that media buying is about securing the cheapest deal for the most number of media spots. However, the quality of the spots matters too, and the media agency professionals are your best source of information the best quality media spots.

Of course, as a cost-conscious entrepreneur or manager, you want to drive a good bargain, but always ensure that you are paying more attention to the value you are getting out of the campaign rather than driving a great bargain, but your resources are not spread optimally so as to give your ad campaign a strong impact and foothold among your target audience. Your objective should be to get the most value for the same amount of money - whether that is in terms of a better quality media spot, more airtime or a prominent sponsorship.

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