Via Media Buying Academy

May 23, 2011

Spot Television Negotiating Tips – Part 2

Remembering that a good negotiation is WIN!  WIN!  WIN!, media buyers and media sellers know that there are times when one or the other is simply going to have to bend in order to get on the buy.  Where the rep might have to bend in one daypart, and buyer might have to bend in another daypart.

For instance, AM News (M-F 7-9am) has limited availability and a strong demand, versus Daytime, which has a large window (M-F 9am-4pm) of availabilities without the strong demand.  Taking this one step farther, there is more demand on Soaps (M-F 1-4pm) than there is for the hourly shows that air from (M-F 9am-Noon).  Most stations who carry a Noon News (usually one half hour) have a heavy demand on that particular program, so we’ll leave it out of the morning segment for now.  We might want to negotiate it separately.

                                                                           A18-49                       A18-49    

                                                                                                                                                                         &nbs p;             Last Year’s                                                                                                                                                        

                                                            Demo                         Demo                      Need     Last Year     Negotiated

Days        Time     :30       Name of Program       Ratings Est.      CPP        (000)       CPM        Rate         Rating            Rate

M-F         7-9p        Y           AM News                          2.5          $40.00        20.0      $5.00       $100           2.3               $  75

M-F        9a-N        Y            Daytime                             2.7          $46.30        23.0      $5.43       $125           3.0               $100

M-F        1-4p         Y           Soaps                                4.1          $48.78        36.0      $5.56       $200           3.5               $250

Totals                                                                            9.3          $45.70         79.0      $5.38       $425           6.5               $425

M-F    N-12.30p     Y           Noon News                        5.1          $49.02         42.0      $5.95       $250           5.0               $275

Here, the buyer can afford to go up $25 per spot for both the AM News and Daytime; however, she cannot pay more than $250 for Soaps and more than $275 for the Noon News.

Smart buyers and reps would bundle these spots so that both buyer and seller are happy.  For every Noon News bought at $300, the buyer will get a package of AM News/Daytime/Soaps for:

Package (4 spots)                                                        14.4          $46.88          121.0      5.58       $675

The TV rep, who just made the buyer look like a real hero, can allocate those spots with the following rates.

         AM News                  $  75             Last Year - $  75

         Daytime                    $  75             Last Year - $100

         Soaps                       $225             Last Year - $250

         Noon News               $300             Last Year - $275

                                          $675                                $700

The media rep has gotten a $25 rate increase for the two dayparts/programs that were important to him – Soaps and Noon News.  Also, inventory is severely limited in those two areas.  He left last year’s AM News rate alone at $75, knowing he could clear that through his Local Sales Manager.  The only daypart to go down in price was Daytime, an area where he had plenty of inventory and not such a big demand.  He was happy.  The buyer was happy.  She got all of her “Need Rates” met.

WIN!  WIN!  WIN!

by Chris Buddemeyer