Every medium has value, because they all have readers, viewers, and listeners. But some are more valuable than others given the goals of an advertising campaign.
How this value is determined is through calculating and comparing CPM (cost per impression) for each medium considered for a campaign—the number of viewers, listeners, or readers / the cost of the inventory. (Check out our glossary for more on CPM.)
In order to negotiate, you need to understand audience numbers, placement, and rate.
So, what is an advertiser to do? Are there any methods advertisers can use to negotiate rates with the kind of market volatility described in Parts 1 & 2 of this post? Yes.
1. Never pay rate card.
2. Ask the media outlet to give you third party validated audience information for the specific inventory (placement,daypart, program) they are offering you.
3. Negotiate placement, daypart, or program as much as rate.
4. Work with a sales rep, not a manager or owner.
5. Find tools or systems that can give you benchmarking data on average rates by medium, geography, and placement.
6. Ask for value-adds and free remnant inventory as a bonus.
7. Test, measure, and repeat.
When Supply is greater than Demand, the price should be lower. Keep this in mind when negotiating.
Remember the audience is the demand side of the “supply and demand” equation. All the inventory being sold has different demand for it depending on what the content is, how the content is being delivered, and when the content is being delivered.
Right now almost all media has plenty of supply—the media world is so fragmented, and there is finite demand.
This too is a wonderful way of explaining what we do in lay terms. So many times we get caught up in the “slang” we use everyday that we forget that those not exposed to this on a daily basis will not understand our verbiage. This says it well.
Comment by Donette Arcos — May 21, 2010 @ 12:57 pm