Internet consultant Ryan Dohrn offers strategies to media companies to make money using correct and accurate pricing.
Pricing your digital assets can be tough due to the large number of products and variables in your marketplace. There are three factors I would advise you to consider: competition, base line pricing and overall bundled price.
The first step is to create a competitive matrix or grid. This grid allows you to see a side-by-side comparison of what your competition has to offer in comparison to your multimedia offerings. Some pricing has to do with market exclusivity and special opportunities that only you or they can provide. So, be accurate and throw out items that are not year long offerings. Without this comparative grid, you are guessing at best.
Next, your baseline – where to begin with pricing your digital assets. In most cases you can simply take the price of your highest priced magazine ad times 25% to arrive at a base price. As an internet consultant, I have been a part of over 1,000 business evaluations on this exact topic and in almost all cases the numbers mirror this 25% example. Now, this does not mean that your banner ad sells for that figure, it just gives you a ballpark number to not go far below. Basically, a starting point. With social media, price those out at a CPM of $125. For every 1,000 fans or followers you have, charge the advertiser $125 per inclusion.
Last, your bundled price. If you added all your multimedia together, what type of discount can you give an advertiser for buying multiple products from you? To take this one step further, let’s not discount print one penny. (Can I get an Amen out there?) Next, make a list of what you would charge the client line by line for each digital item under print a la carte’. You should not show this list to the advertiser. This is for your eyes only. Using a calculator, how low can you go on the multimedia discount and still make a 30% margin or better on the digital products?
Now, circle back to step one. Some pricing is based on playing the field and knowing what the current market will bear. But, how does your pricing line up with the competition? Unless what your multimedia offer is clearly superior, is market exclusive or contains some wild unique feature, your pricing needs to be real and in line with the competition. I hope you see that with your multimedia discount that you are lower than the competition and proving a better value and greater exposure to your client. After all, even if they like the salesperson, if the price is not real and in the same realm as your next closest competitor, you’re out.
Ryan Dohrn is an Internet consultant that trains sales and editorial teams to take full advantage of the web to make money. Ryan@RyanDohrn.com (803) 867-3769. Internet consultant, Internet consulting, business speaker, Internet design, business coaching.