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Negotiations, Under-delivery and Media Refunds

This short document focuses on negotiations and under-delivery in media communication campaigns.
1. what kind of approach should be followed when faced with display campaign that under-delivered?
2. are there any Best Practices to reduce the risk of under-delivery?
3. when negotiation can be truly evaluated and rated?
Prepared in 2011, the document contains evergreen guidelines about media deals evaluation.

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Negotiations, Under-delivery and Media Refunds

  1. 1. Negotiations,  Under-­‐delivery  and  Media  Refunds   I have been a Media Auditor for 10 years and worked previously in a variety of media companies: agencies, media owners and advertisers have given to me some insight about negotiations. Miracles don’t exist and great deals are based on 4 key drivers: . knowledge . determination . flexibility . time (most important!) No deal can be evaluated over a short frame of time: . Evaluation can be done only when goods are fully delivered. . Negotiations skills can only be assessed when fiscal year is closed, for both the seller and the buyer. In fact there are 2 common risks to be considered: 1. The content of media deal may not be fully delivered when it is due. 2. A sort of negotiation “balance” is put in place by the sellers; meaning that a great deal is often balanced by another one that is not great at all. Balance may happen over the same period (and may be applied to different goods bought by the same purchaser) or, more often, over a longer period. Because of the passion and professionalism of many people, and because of money constraints, communication campaigns are often studied in order to provide the right amount of stimuli to the target. While over-delivering on the same media may be a money-wastage, under-delivering puts the communication investment at risk of being ineffective. So what kind of approach should be followed when faced with display campaign that under-delivered? As a media auditing company we decided to provide the full spectrum of choices to our WEB audit clients; focusing the attention on three key methodologies, each one illustrating a different approach. 1. The Accurate Approach: Guideline: refunds calculated on each single part of the communication puzzle. Assumption: placements have been studied to contribute to the campaign success exactly the way they were bought (+/-10%). Evaluation based on: individual placement, per site, per campaign. 2. The Medium Approach: Guideline: refunds based on site / campaign. Assumption: the value of placement under-delivery and over-delivery are balanced within the same campaign / site. No matter about different placement. Evaluation based on: total placement value per individual site per campaign. 3. The Light Approach: Guideline: refunds based on each site over a long period
  2. 2. Assumption: . Site is the driver. . Compensation is accepted over a long term period, therefore a lack of communication to one campaign and an overpressure to another are considered ok. Evaluation based on: total placement value per individual site. While the accurate approach is considered most suitable option to media audit and refunds calculation, the other two alternatives were often used to show how much numbers can change when methodology is in a grey area. Between “light” and accurate methodology the number of detected issues may vary significantly: the higher the number of under-delivery the bigger the spread. So how can time be taken into account in evaluating negotiations? And what can be done to avoid risks? Our recommendation to advertisers: 1. In order to have a reliable negotiation assessment always make a full fiscal year audit. With all deals included. 2. To detect under-delivery, follow an accurate methodology that considers individual placement, per site, per campaigns. In brief: check each single part of the whole fiscal year communication puzzle. Are there any Best Practices to reduce the risk of under-delivery? Of course there are! Here are 4 tricks: 1. Define under-delivery and process refund before closing any media deal. Making all the players aware that advertising will be checked exactly the way it was planned will have them more committed. 2. Verify process feasibility before starting the campaign. Make yourself sure delivery can be checked the way you want it and that results will be on your table when expected. 3. Check placement delivery weekly. Have the agency and the media owner fully committed to it. Prevention is better than cure. Last but not least….. 4. When comparing media options, always prefer the one that can be checked and fine-tuned while the communication investment is still running Having advertising refunds while the campaign is still active is the best way to be safe about communication perfomance . Paola Furlanetto is now working as location independent consultant. To know more about her activities, please check Linkedin profile