Evidence of Christmas decorations in retail outlets and discussions about media negotiations suggest the end of the year is closing fast.

In this edition of P3 e-news Mark Chesterfield from P3Media Benchmarks looks at the state of play for this year's media negotiations and offers some suggestions for advertisers on how to get the most from your annual media negotiations.
 
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The 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 factors, etc.

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.

For more information on rate negotiations or any issue associated with media strategy or buying email media@p3.com.au or visit our website at www.p3media.com.au

P3TV Production Workshops scheduled for the new year

Register 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 tv@p3.com.au

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