Discounts and extra charges - Advertising

Discounts and extra charges

When selling advertising time on television, the system of mark-ups and discounts is quite widespread. Margins are usually of two types:

• for positioning an ad in an ad unit

• for a fixed placement of the commercial;

• for placement in prime;

• seasonal.

Positioning involves placing an ad on the first or last position in the ad unit, which costs the advertiser in the form of a 10-15% mark-up to the tariff. In the second half of 2001, on some TV channels, there was an extra charge for positioning the ad at any other position (except the first and last), which in fact meant a fixed placement at the second position in the block.

Fixed placement of the commercial assumes the possibility of selecting a specific ad unit in which this video will be published. Dynamics of television viewing of target audiences leads to the fact that not all parts of the day and ad units are equally interesting to the advertiser in terms of the target contact and its cost. Therefore, he is ready to pay extra for the possibility of guaranteed access to the most profitable parts of the day in ad units with a large share of his target audience. The markup for a fixed placement is up to 30%, depending on the share of such placement (possibly a partial fixed placement) and the seller. The opposite of a fixed placement is a floating placement, in which the release time of the roller is determined by the seller, placing them in any free ad units that are not occupied by a fixed placement.

Placing in prime is interesting to the advertiser by the fact that prime time consistently has the largest amount of audience viewing and, being placed there, you can cover it with a message quickly and in large volume.

Seasonal margins - the demand for advertising varies from month to month. There are periods of high consumer activity, in which advertisers prefer to put their advertising and form a high demand for advertising placement, but there are periods of its decline. Accordingly, in periods of high demand for advertising, the sellers regulate the placement price using the seasonal margin, and in periods of low demand, the seasonal discount (Table 8.2).

Sometimes there are rates for the urgency of placement - in an already-mesh broadcast network they are trying to find a place for an advertiser who is willing to pay extra money for placing his advertisement.

Table 8.2

System of seasonal discounts and mark-ups for placement on national TV, 2013

Month

Video International

CTC Media

PTR. Media

Gazprom Media

January

-35%

-35%

-35%

-35%

February

0%

0%

0%

0%

March

10%

10%

10%

10%

April

15%

15%

15%

15%

May

5%

5%

5%

5%

June

0%

0%

0%

0%

July

-20%

-20%

-20%

-20%

August

-20%

-20%

-20%

-15%

September

20%

20%

20%

20%

October

25%

25%

25%

20%

November

15%

15%

15%

20%

December

5%

5%

5%

5%

A special place is taken by mark-ups for the number of brands in one video. For example, Procter & amp; Gamble (brand Fairy ) and SE (brand Tefal ) are present within the same video. Appearing on the air together, both brands receive an equal number of contacts with the audience, paying only half of the costs. At the same time, payment goes through that partner who has great benefits when placing. Since August 1999, on all major TV channels, special mark-ups in the amount of 50% of the contract price have been applied to this kind of commercials. Later, this mark-up began to spread only for the time of the presence in the commercial of the second advertiser. For example, if a second advertiser is present in a 10-second clip of one advertiser for 4 seconds, then 6 seconds are paid with a coefficient of 1 and 4 seconds with a coefficient of 1.5.

Discounts are more diverse. Among them are the following:

• agency;

• three-dimensional;

• Packages;

• for placement in the interprogram space;

• for placement outside the prime time;

• seasonal (see seasonal surcharges and Table 8.2);

• on venture contracts;

• on the super-commission.

Agency discount is given to an advertising agency that buys certain amounts of advertising time. At present, on major TV channels, the agency discount is 15% of the advertising budget amount.

The volume discount depends on the amount of time purchased - the larger the volume, the higher the discount. When switching to the sale of advertising on the ratings, most TV channels formally refused a volume discount, but nevertheless the largest advertisers, concluding annual and multi-year contracts, receive a decrease in the cost of placement several times. A package discount is provided when several advertising channels are placed on several channels. A media seller who has the ability to advertise on several channels, tries to maximally pick up the advertising budgets of individual advertisers and offers them various options for batch placement. Seasonal discounts are applied in January and July - August, when the activity of advertisers falls a little.

Discounts on venture contracts - are quite rare on domestic television. A classical venture transaction, regardless of the market segment, is a deal with a high degree of risk, but simultaneously with increased profitability. In the advertising business, they tend to be used to bring a new brand to the market. In fact, the advertiser is trying to share with someone the risk of failure. A media dealer or a TV channel offering a advertiser in this case a significant discount at the initial placement, but with the condition that in the future the main budgets will go through this channel or this seller and according to the already established price list, can act as a partner. The benefit of the channel is in attracting a new advertiser. The advertiser's benefit is in the ability to adjust the advertising campaign by tracking the effectiveness of the initial outputs.

Supercomission is a specific discount given to a media buying agency for placing on a channel or channels controlled by one mediaeller a certain percentage of the advertising budgets of its customers. In some cases, the super commission can be calculated for individual advertisers.

When calculating the total amount of discounts for a particular advertiser or agency, a sequential subtraction of the discounts received is made. First, the amount to be paid by the advertiser after applying the first discount is calculated. The remaining amount is applied to the following discount, etc.

As we know, the development of the television advertising market is closely connected with the development of television itself. In recent years, TV as a carrier of advertising opportunities has made a significant step forward. Today there is a television broadcasting system that includes federal, regional, network, satellite, cable channels. In terms of advertising, federal channels remain the most attractive, although regional, network and cable channels in the near future will become full-fledged subjects of the market, which will lead to technological changes in the placement of advertising. We are talking primarily about the decentralization of advertising on TV, about some reorientation of the placement of even national advertising campaigns from the federal to the regional level.

As far as the development and professionalism of television sociology develops, there will be a widespread transition to sales by ratings, and federal channels, perhaps even further, will sell not so much the audience as the number of contacts with the advertising spot. This is a more perfect system of advertising placement and, in the opinion of specialists, the very near future of the United States television and advertising market.

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