Negotiating a Media Buy

A lot of people have been asking me lately how I negotiate my media buys.

First and foremost, I find it easier to deal with someone that you know or have had some sort of past communication with.

The first tactic that you can employ would be to simply ask for a discount. Often times, if you have had some sort of past communication they will offer you a good rate right off the bat, negotiation over.

But, if you don’t get your desired rate right off the bat then it’s time to use some additional tactics.

• Approach them as a new company that is looking to experiment with some ad placements and has a limited budget. Tell them right up front “what you can afford” , making sure that it’s actually 50% below what you can actually afford to risk.

Don’t be afraid to make a counter offer if you don’t feel that you’ve been given a good or optimal deal.

• Even if the price is listed right on the site or agency site, don’t be so quick to just assume that they won’t be flexible.

Tell them your situation and be honest about it that you are taking a big risk trying your banners on their site/network and you’ll need to get it for $X price.

A typical conversation might take 5+ emails or several phone calls to negotiate a price. Don’t assume that they are going to budge on the first try.

• Phone is generally “better” than email for negotiating a price, if you are making a multi thousand dollar deal (or relatively large deal for that site or network.)

Using the phone you “put them on the spot” and human nature kicks in and they may take a worse deal than they would have by sending emails back and forth where they have time to “think about it” and come up with excuse or justification as to why that price is no good.

Let’s look at a little scenario.

Company XYZ charges $9 CPM with a minimum $2,500 spend, as listed on their website.

I would approach them as a first time buyer (asking for a special deal as a new buyer on their network/site.) If my target goal was $7 CPM, I would ask for somewhere around $4.50 and a $1,250 spend. Exactly half of what they are offering.

• By approaching a company and making a counter offer to their listed rates with odd numbers like “$4.50″ and $1,250″ it makes it seem like you have thought out your pricing, more-so than if you were to ask for $5 and $1,500.”

I almost always counter offer with odd numbers to give that impression that I have thought out my needs (and I always do think out my needs for low pricing.)

If you are dealing with a “monthly placement” and the price is really low (less than a few hundred) , often times that website owner or network has decided that they are pricing it to sell. If it’s a reasonable number, you may find success in offering multiple months payment up front. For example, on Daily Conversions you can pick up a $75/month 125×125 on the right side. And, if someone were to offer me $65, I would probably just say that it’s not worth it for me (and it isn’t, since I have advertisers willing to pay $75 and more–>meaning I should be raising the price) on a placement that is probably already extremely under-priced. However, if someone were to come to me and say that they’d give me $65/month with 6 months paid up front, I might be more likely to say yes.

If it’s a high price point CPM deal with required buy-in, you usually have more room to negotiate than a lower priced monthly deal. But, always try to either offer multiple months for a monthly placement up front (if you can afford it) or offer less money than their listed rate if a CPM deal using odd numbers.

Be persistent, and use the old sales rule that you need 3 NO’s before they actually mean it