annual war of words on media inflation
has started in earnest and as usual the television networks
are the ones speaking longest, loudest and most
bullishly about the levels of increase the
market can expect.
The rise and rise of rates
Naturally, another 'bumper' year in 2004 with
double digit increases in revenue and a strong economic
outlook are the cornerstones of their case for continued
rate inflation to ensure a 'steadying' impact
on the strongly over-demanded market that exists.
Full steam ahead
The Howard Government's win in the federal
election has only served to emphasise their claims with a 'steady
as you go' attitude endorsing the maintenance of the
current ad industry economic bubble.
In this there is simply an amplification of the situation coming
onto 2004 and the relative ratings strength displayed by the
Nine and Ten Networks particularly provides them with further
ammunition to claim the high ground in terms of audience
delivery versus cost.
A reality check
Most industry pundits and the financial market
are predicting mid-single to low-double digit growth.
As in the past, rate inflation will outstrip any real
audience gains and the cost-of-audience will only mitigate
the overall rate-on-rate position.
Bigger is better
Despite the fashionable claims in some quarters that the big
buying groups aren't providing the jump on the market they used
to, it is clear that in such a strong seller's market,
volume will continue to speak terms. Any advantaged
'base rate' position from which to leverage individual client
negotiations can only be a benefit in these circumstances.
How will you fare?
The real outcome for individual advertisers will depend
on a range of factors including the method by which
they choose to measure media inflation, the
methodology they and their media agency employ in negotiation
and the size of the budget they bring to the
table versus last year.
Getting the most from your negotiations
Here are five tips for advertisers as the negotiations commence:
1. Get involved
- The more you know about the negotiation and the more you get
to know the Networks, the better the chances that the outcome
will reflect your expectations rather than the media
agency's overall agenda.
2. Think strategy
- What options do the media agency propose and what
strategy will they employ? For instance, one, two or
three Network buys are all valid strategies but depend on your
needs in terms of overall volume, target audience, environmental
3. Don't be afraid to take
a risk - In order to get what you want or need,
the traditional approach taken in the past
may simply be dragging you back to the lowest common
denominator. Push the media agency to explore the options
- you may still come back to the current paradigm but if you
don't test it, you'll never know.
4. Think ahead, plan ahead
- In today's market, there are no prizes for coming
into the game late. The current lack of airtime (exacerbated
by seasonal factors) means that any advertiser relying on the
'short term deal' will be out in the cold.
An overall highly demanded market means that the 'peak' seasons
are getting longer.
5. Call P3Media Benchmarks -
we can give you independent, unbiased advice
on the state of the market, the advice you're being given and
the best negotiating strategy for you, reflecting
your own unique set of needs without any hidden agendas.
more information on rate negotiations or
any issue associated with media strategy or buying
or visit our website at www.p3media.com.au
Workshops scheduled for the new year
your interest now.
To be held in partnership with
the Nine Network and 9mm Commercials at Nine Studios Richmond,
Vic and Willoughby, NSW.
If you are interested
in the next workshop, contact P3 by email at email@example.com