Magazine article Marketing

A Red Letter Day for the Volume Deal

Magazine article Marketing

A Red Letter Day for the Volume Deal

Article excerpt

The phenomenon of volume dealing, which means that media buyers with volume "clout" can negotiate better rates for clients, is maturing rapidly after a slow start. 1993 will be the first trading year clout comes into its own, encouraged by two factors: TV sales houses, and the grey market enforced by the withdrawal of published revenue data. The breakdown of talks between Granada and MAS represents only a temporary abatement of an inevitable commercial pressure on TV companies to simplify the way they sell airtime. Guaranteed volumes negotiated upfront with a major buying point must be a more cost-effective game plan than the current advertiser-led system. Equally influential will be the erosion of station price as a currency. The more uncertain buyers are of the real market rate, the more confident media owners will become in offering preferential deals to their largest agency or media independent customers.

It seems likely therefore that 1993 will see an unprecedented polarisation of buying performance between the bulk buyers and the "also-rans". The pay-off for clients in terms of discounts will be real - in the short-term broking and "hidden discounts" are a non-starter for the UK given the still considerable media owner strengths and advertisers' awareness of their rights to those discounts. The real risk of playing the volume game comes from a different source - the difficulty of ensuring that objective, tailored brand planning decisions are made in the context of a business increasingly dominated by aggregate agency price deals. …

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