Question

Topic: Other

Media Buying: Retainer, Hourly Rate, Commission?

Posted by Anonymous on 9/13/2005 at 3:55 PM ET 125 Points
I am getting ready to open a media buying company (in a niche industry). For the past 9 years, I have SOLD the media in this industry, so I think my past experience will give me a good perspective, and be quite beneficial to my clients--since I have sat on the other side of the table, and have many industry contacts from which to leverage. I was wondering what I need to consider contractually. Do I charge a commission for the media that is picked (e.g. 15%)? If so, how do I ensure that the client doesn't implement my suggestions on their own? Do I charge a retainer in advance? Do I charge an hourly rate for upfront research? I just want to make sure that I don't invest time and energy into creating recommended buys only to have the client reject them but then have their ads turn up in my suggested media vehicles at a later date. Thanks!
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  • Posted by mgoodman on 9/13/2005 at 6:57 PM Accepted
    Jesse, it depends on who you're trying to appeal to and what you want the relationship to be.

    If you are going after large companies for an ongoing retainer relationship, you probably want to charge a flat fee for your services.

    If you're going after smaller companies for one-shot assignments, you might want a combination of a project fee and a small percentage of the buy.

    You need to decide who your target audience is and how you want them to see you. That will lead you to the pricing strategy.

    There's a detailed discussion of the various ways consultants can bill for their services in Rasputin For Hire : An inside look at management consulting between jobs or as a second career. It's probably worth reading if you're really serious about hanging out your shingle and becoming a full-time media buyer/consultant.

    The discussion of pricing options for consultants includes a fairly detailed list of the pros and cons, and when you might use one approach versus another.

    You can get the book through Amazon.com or bn.com, at most bookstores in the US, or at www.rasputinforhire.com . That website will also allow you to preview the table of contents, introduction and chapter 1 ... so you can see if you think the book will really be helpful to you.

    Good luck. I've had great experience with a talented media buyer/consultant, so I know the potential is there to bring high value to your clients. The hard part is landing those first few clients ... but isn't that always the case?
  • Posted by mgoodman on 9/13/2005 at 7:02 PM Accepted
    A quick PS: Do NOT fall into the trap of billing by the hour or the day. You're not selling time; you're selling your knowledge and experience.

    Billing for your time encourages you to be inefficient and it ensures that your client will be watching the meter as it ticks away his/her money, instead of on the great benefits you can deliver to help his/her business.
  • Posted on 9/13/2005 at 9:00 PM Author
    This is very helpful advice, thank you! I will get that book.
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