The Art of Negotiating an Online Media Buy

by Rishi Shah on October 2, 2012

Rishi’s Note: I invited Jana Fung the marketing manager behind MixRank to talk about the art of negotiating a media buy. This is the perfect guide to go through after you have discovered a site that is sending you high converting traffic.

About Jana and MixRank: Jana Fung is the Marketing Manager of MixRank. MixRank is a competitive intelligence tool for display advertising.  You can learn more about scaling your display campaigns by downloading MixRank’s free eBook “Scale Campaigns with Profitable Placements.”

So you’re running a display campaign through an ad network (for example Google’s Display Network or BuySellAds.com).  You have found an amazing site is sending you really valuable converting traffic.  You’re already targeting the placement and increasing the bid to dominate on impression share through your ad network traffic… but you want more. So you ask yourself:

Is there any other way to optimize this campaign further?

The answer: Yes!

Direct media buys are a great way to get impressions at a bulk discounted rate, rather than paying per click or impressions through an ad network. Publishers will want to work with you as well, because they will reap the full payment for the ads, not having to pay commissions to an ad network. However, you should be wary that the publishers listed pricing isn’t always guaranteed superior, as it’s the price the publisher wants, but is not necessarily in line with demand.  Marketers can and should negotiate for the best pricing that’ll suit business goals.

Step 1: Evaluate the pricing options

Visit the “Contact Us” or “Advertisers” page on the site of interest to obtain their ad prices. Publishers can list prices by cost per thousand impressions (CPM) or at a monthly flat rate fee.

If the site only has CPM pricing, you can proceed to step 2.  If the site has both types of pricing (or just monthly flat rates), you’ll need to dive deeper and ask for more data regarding how many unique visitors and page views the site gets per month.  If the ratio of visitors to page views is low, CPM may not be a good option as your impressions may all be shown to the same visitor.  However, this all depends on what your ad copy is and how much you’re willing to spend on a customer.

Evaluate both pricing models and determine which would be better for your business based on the amount of impressions you believe you’ll get in a month versus how much you’d pay for the same amount of impressions via CPM.

Step 2: Analyze your campaign’s performance metrics

Figure out how much your current (CPM) is on this site.  Obviously, you’d want to get a lower rate with a direct media buy.  If you’re doing a monthly flat rate, ask how many impressions they can guarantee at that price and measure that against what you’re already currently paying. Is it higher or lower?

If you’ve never advertised on this site before, figure out the customer lifetime value (CLV) for your business to determine how much you’d be willing to pay for a customer (CPA).  From there, you’ll need to ask for the publisher’s average click-through rate and have your landing page’s conversion rate handy.  With CTR and conversion rate, estimate how many new customers you would get from this media buy.  Is it in line with your ideal CPA?

Step 3: Negotiate like a pro

Now that you have all of your bargaining chips, you’ll need to point to the publisher why their listed price is too high.  Even if their price is lower than what you’re currently paying, they really don’t need to know that. You still can and should negotiate! Here are some things you should put into play when negotiating:

For advertisers who have displayed ads on this site:

  1. If their price is too high, simply state what you’re currently paying and that you’d want a discount for buying in bulk.
  2. Always ask for a discount for a long-term commitment. Since you already know this placement performs well for you, a longer commitment should get you some additional savings
  3. Find out if you could get specific ad units for your ads.  This may not result in monetary savings but could get your ad above the fold for every impression!
  4. Ask for an additional discount if you pay in full upfront (rather than month to month).
  5. Get some add-ons! Ask if they could include an email newsletter feature for the first month as a test. If it performs well, you’d be willing to pay for more newsletter ads.

For advertisers who haven’t done any ads on this site:

  1. Point to reasons why you think the cost is too high – maybe their CTR is poor, or their unique visitors to page view ratio is too low.
  2. Try to do a test or trial with them at a discounted rate.
  3. Ask about remnant inventory and if you could buy that at a discounted rate

Whenever you negotiate, don’t give up all your data at once.  You’ll want to see what their response is to each point before you move onto the next.  This gives you more chips for bargaining and allows you to get the best rate and reach possible.

If you liked this blog post, you can get even more tips with MixRank’s FREE EBOOK called “Scale Campaigns with Profitable Placements.” Claim your free ebook here.

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{ 2 comments }

Jason Oman October 3, 2012 at 10:31 AM

Loved this post. Most people don’t realize that you can even do this. They just keep spending like crazy inside the actual ad network.

Great post Jana!

Rishi Shah October 8, 2012 at 2:00 PM

Yes! This is why I liked Jana’s blog post so much.

Such a great (and somewhat easy) way to optimize conversions even further.

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