By: Cindy Seebeck
Broadcast buyers count themselves among some of the best negotiators in the media business, but negotiation means a lot more than simply getting the best price for a schedule.
Did you know that over focusing on getting the best price can put you at higher risk of preemption and keep you from reaching your communication goals? As many of you know, the buying and selling of media time is akin to the selling of airline tickets, in that it is a supply and demand model. When an airline is close to sell-out, the price of your ticket will go up. Conversely, when a specific flight has open seats, the price of your ticket will be less expensive. And, if a flight is sold-out, an airline may bump you off the flight so that they can sell your seat at a higher price to another customer.
The media business works the same way. If you are able to negotiate a very low rate for a specific program, you are in jeopardy of getting preempted, if the demand is there, from a buyer that is willing to pay more than you are. The preemption will result in you having to negotiate a makegood for the preemption. You may then need to take a less desirable program than the one originally purchased, as you won’t have enough money to purchase an equitable show at the same rating estimate.
Less-seasoned buyers can sometimes feel that the only way to get what they want is to bully their sales reps. Although this approach often works, it is short-sighted. Alternatively, what should be kept in mind when negotiating, is the actual definition of negotiation. As defined by Merriam Webster, to negotiate is to arrange for or bring about through conference, discussion, and compromise. Therefore, buyers, take note: you can’t always get what you want. Isn’t that a song title? I digress….
The other important element in the negotiation process is knowing when to stop negotiating. This doesn’t mean that you are a weak negotiator. It means that you understand market dynamics, recognize the value of who you are negotiating with and their importance to your longer-term success. Unlike the constantly-shifting sales landscape of digital, broadcast buyers tend to negotiate with the same entrenched sales reps over and over again for multiple deals throughout the course of years. There are many sales reps I’ve dealt with since I first started in the business a couple of decades ago.
So, how do you know when to stop? That is not an easy question to answer as it has been my experience that it varies with each situation. However, there are certain clues that might help you recognize where the breaking point is. The first is when the sales rep says, “I’ve brought this to the top of the sales chain and this is management’s last offer. They are willing to pass on the business if these terms are not acceptable.” This is an obvious clue.
A subtler one may be when the sales rep becomes hard to find or is inaccessible. It may be his or her way of saying, “I’d like for you to sit with the deal and simmer for a while in hopes of you reassessing what is on the table.” This is a risky option as the negotiator may either get angry by the inaccessibility and/or reach out to a competitor for a similar package.
Another clue is to the alteration of a deal you have been negotiating for a long time. This signals that the sales rep can’t lower the total cost of the deal without adding elements to the package. Although this sounds counterintuitive, adding deal points to the overall cost can reduce it. However, those additions water down the effectiveness of the original package by inserting less valuable inventory that a station can discount or offer as bonus units to make the overall deal work. This clue often comes after you’ve gone to order and the sales rep asks to re-work the numbers so that the package will clear.
The above examples are just a few of those that I’ve uncovered over the years. I’d love to hear some of yours! In the meantime, buyers beware of over-negotiating and always think about the long-term.