Latest / The Yield Doctor with James Deaker / Beyond the Price List: Most Media Rate Cards Leak Revenue

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Beyond the Price List: Most Media Rate Cards Leak Revenue · The Yield Doctor with James Deaker

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  Most media companies think that their
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  rate card is just a price list and
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  that's where they go wrong. It's also
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  one of the main reasons that companies
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  are losing revenue without even
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  realizing it. The mistake is in thinking
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  that the rate card's job is to tell the
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  market what things cost, but that's not
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  actually what it does. The main job is
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  to tell the market what it is that you
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  sell. And that distinction is more
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  important than it sounds. When people
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  build rate cards, they tend to focus on
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  the prices, but the real leverage is in
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  the structure because the structure
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  determines what buyers can buy, how they
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  compare options, and ultimately where
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  demand flows. And so if you get the
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  structure wrong, better pricing won't
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  save you. Crucially, there is a logic in
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  how you need to build a rate card. You
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  need to start with the product
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  segmentation.
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  Depending on your business, that might
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  be the format of the ads, the site
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  section, the audience, the device, the
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  geography, or even the type of
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  guarantees.
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  Then you define the type of pricing
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  model. And by that, what I mean is, are
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  you going to charge on a CPM basis or a
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  CPA basis or charge for different types
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  of sponsorship? And then finally, after
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  you've made those major decisions, you
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  get to focus on the actual prices.
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  Unfortunately, many companies do this in
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  the reverse order, and that's where the
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  problem starts.
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  The other thing that is often missed is
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  the cadence. A rate card is not a
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  one-time exercise. you need to update it
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  regularly because if you don't it gets
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  stale and it stops reflecting the market
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  value and when that happens you start
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  leaking value without even realizing it.
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  Another key point is that your public
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  rate card is only one rate card that is
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  in your system. Internally, you need to
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  also have target prices where you expect
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  to have the deals close, floor prices
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  where approvals are needed below that
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  price point, and you need to have
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  additional structures like deals and
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  other escalation processes. Without that
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  type of system, your rate card can
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  become more of a suggestion for how your
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  sales team operates than an actual
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  control mechanism, which it needs to be.
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  If you step back, a good rate card needs
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  to work on two dimensions. The first is
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  the structure. Is it clear to the
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  clients, to the buyers, what is actually
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  available? and does it represent how
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  those buyers think. There needs to be a
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  clear logical value to the hierarchy of
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  the different types of products that are
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  listed. And the second major bucket is
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  around usage. Is there discounting
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  that's governed by structure? Is it
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  clear who owns the rate card internally?
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  Is it clear how often updates need to
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  occur? If either of these uh systems
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  break, then the overall system breaks.
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  The main idea here is this. The good
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  rate cards don't just price inventory.
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  They shape the demand that's coming in
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  from the market. They determine what
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  gets bought, how budgets get allocated,
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  and where revenue actually lands. If you
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  want more frameworks like this, I write
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  regularly in the Yield Doctor
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  newsletter. Please go ahead and
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  subscribe. I am James Deika. I am the
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  Yield Doctor and I work with my clients
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  on exactly these types of issues. Thanks
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  for watching.