Relative Value

I posted this link on the BAP Facebook page yesterday, but I wanted to go into a bit more detail about it. What the link takes you to is a pdf of the Clearchannel outdoor media rate card–a listing of the prices advertisers pay to rent billboards and the like.

The first think I’d like to point out is that there are a lot more media options than you may have ever thought about. For example, we all know about bus shelters and bus wraps, but we tend to forget about inside of the bus or commuter trains, on top of taxis, or all the ads we see at malls.

Even though there are a lot of things listed on this pdf, these are actually just a few media options. There is media (space rented by advertisers, I mean) everywhere– the conveyor belts and carts at the grocery store, flyers filling your mailbox, and everything digital, of course.

And it all costs to rent. Those prices are pretty much standardized within their relative markets and usually you can get those prices on online media cards like this. By looking at these media cards, you can start to understand the relative value of your work and estimate your fees more accurately.

There are still people who say that basing your usage fees of media rates is an old, discarded way of doing the math. Apparently it was done 20+ years ago, before I got into the biz, and rejected. I have no idea why or what things were like then. But just because it didn’t work then doesn’t mean it’s a bad idea now.

Now it makes sense. As noted in Getting to Yes (Ury, et al), one of the pillars to successful negotiations is using objective criteria–using the media rates (something out of the control of both you and the agency/client you are negotiating with) makes your position rational. If placement costs $800,000 then the usage fee should be greater than placement which costs $300,000. Pencil-pushers can understand this. As I discuss in this month’s Creative Lube, cost consultants are looking at everything to try and get the numbers down–you need to have a rational argument for why you are billing what you bill. Taking yourself out of the equation and, instead, pointing out the simple logic of a more extensive media buy equalling a greater usage fee simply works in these numbers-guys’ heads. They can’t argue with math.

These media numbers are important to know, also, because when you are selling an unlimited license of some sort, you need to know what you are really selling–it’s a hell of a lot more than you may think. Don’t give it away. When you understand the value of your work in the media environment, when you learn what sorts of numbers your clients are used to dealing with, suddenly that $48K for creative AND usage fees for two years GLOBAL unlimited print media doesn’t sound like such a good number after all (see first estimate posted by APE). Yes, $48K is a lot of money to a lot of you, but it isn’t a lot of money in the world of your clients–that is, their perspectives are different. They are used to much higher numbers!

You must learn to separate your personal perspective (“$48K is more than I’ve made this year! I’d be thrilled to get this!”) from the actual, objective value being exchanged in this transaction. The objective value for that broad usage (global unlimited print!) is a hell of a lot more than $48K (and remember, that number quoted by that photog INCLUDES the creative fee as well as usage, so the usage is actually less than $48K!).

Think about it… how many taxi tops, bush shelters, and grocery carts are there in the whole world…