Pricing in Media

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Here is a presentation that I gave to an MBA class at the UBC Sauder School of Business. Let me know if you have any questions .

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Pricing in MediaMay 7th, 2009

Pricing in MediaMay 7th, 2009

Ian CruickshankIan Cruickshank

Quick OverviewQuick Overview

Who is this guy?

Media landscape

The Class

Traditional Examples

Non-Traditional Examples

35 Min + 15 for Questions

Who is this guy?

Media landscape

The Class

Traditional Examples

Non-Traditional Examples

35 Min + 15 for Questions

Who is this guy?Who is this guy?

I ’m just like you

Undergrad

6 years in Media

Radio Guy

... moved to print?

Don’t worry - Digital

I ’m just like you

Undergrad

6 years in Media

Radio Guy

... moved to print?

Don’t worry - Digital

The Media LandscapeThe Media Landscape

Traditional or Legacy

Newspaper/Magazines

Television

Radio

Traditional or Legacy

Newspaper/Magazines

Television

Radio

The Media LandscapeThe Media Landscape

TelevisionTelevision

The Media LandscapeThe Media Landscape

Non-Traditional/New Media

Out of Home & Digital OOH

Digital

Online Display

Online Search

Mobile

Non-Traditional/New Media

Out of Home & Digital OOH

Digital

Online Display

Online Search

Mobile

The ClassThe Class

“Pricing is the moment of truth - all of marketing comes to focus in the pricing decision” Corey 1962

“Pricing is the moment of truth - all of marketing comes to focus in the pricing decision” Corey 1962

The ClassThe Class

Where do we fit in to the four current practices

Cost-based, Customer-driven, Competition-driven, Value-based

Customer and Competition-driven

Where do we fit in to the four current practices

Cost-based, Customer-driven, Competition-driven, Value-based

Customer and Competition-driven

General Media PricingGeneral Media Pricing

The ClassThe Class

Customer-driven

Supply and Demand

Negotiation

Budget

National vs. Local Retail

Customer-driven

Supply and Demand

Negotiation

Budget

National vs. Local Retail

The ClassThe ClassCompetition-driven

Monopoly

Oligopoly

Competition

Cannibalization

Competition-driven

Monopoly

Oligopoly

Competition

Cannibalization

The ClassThe Class

Russian Proverb: There are two fools in the market. One does not charge enough. The other charges too much.

Or the competition doesn't charge enough...

DON’T LEAVE MONEY ON THE TABLE!!

Russian Proverb: There are two fools in the market. One does not charge enough. The other charges too much.

Or the competition doesn't charge enough...

DON’T LEAVE MONEY ON THE TABLE!!

The ClassThe Class

Psychology in pricing

Newspaper pricing & perceived value

“It’s time for the Newspaper Industry to Die”

Yet Circulation is still Strong in Canada

Psychology in pricing

Newspaper pricing & perceived value

“It’s time for the Newspaper Industry to Die”

Yet Circulation is still Strong in Canada

The ClassThe Class

Price Discrimination

Segmentation

Local vs. National

Direct vs. Agency

Consumer type & Industry

Price Discrimination

Segmentation

Local vs. National

Direct vs. Agency

Consumer type & Industry

The ClassThe Class

Price Discrimination

Buyer location

Time of purchase

Quantity/Volume

Bundling

Price Discrimination

Buyer location

Time of purchase

Quantity/Volume

Bundling

The ClassThe Class

Price Discrimination

Yield

Which Media?

Price Discrimination

Yield

Which Media?

Perishable products with fixed capacity

Variations in WTP and arrival purchasing time

The ClassThe Class

Channels

Direct

Agency

adbid.ca

Channel conflict?

Channels

Direct

Agency

adbid.ca

Channel conflict?

Traditional ExamplesTraditional Examples

Newspaper

WTP

Price Discrimination

Time & Volume

Value perception vs. effectiveness

Newspaper

WTP

Price Discrimination

Time & Volume

Value perception vs. effectiveness

TraditionalExamplesTraditionalExamples

Newspaper

Rate Card

Newspaper

Rate Card

Traditional ExamplesTraditional Examples

Television

WTP

Time & Volume

CPM/GRP

Television

WTP

Time & Volume

CPM/GRP

Traditional ExamplesTraditional Examples

Television

Rate Card

Television

Rate Card

Traditional ExamplesTraditional Examples

Radio

WTP

S&D, Sales Volume, Demographic, Ratings

CPM/GRP

Radio

WTP

S&D, Sales Volume, Demographic, Ratings

CPM/GRP

Traditional ExamplesTraditional Examples

Radio

Rate Card

Radio

Rate Card

Radio

Submision

Radio

Submision

Traditional ExamplesTraditional Examples

Non-TraditionalNon-Traditional

Out of Home & Digital OOH

S&D, Seasonality, Volume, Number of Markets, Demographic

Creative variations

Out of Home & Digital OOH

S&D, Seasonality, Volume, Number of Markets, Demographic

Creative variations

Non-TraditionalNon-TraditionalCreative variationsCreative variations

Non-TraditionalNon-TraditionalCreative variationsCreative variations

Non-TraditionalNon-TraditionalCreative variationsCreative variations

Non-TraditionalNon-Traditional

Digital

Metrics and Analytics

CPM, CPC, CPA, CPL, CPT...

Trackable/traceable

Digital

Metrics and Analytics

CPM, CPC, CPA, CPL, CPT...

Trackable/traceable

Non-TraditionalNon-TraditionalDigital

Rate Card

Digital

Rate Card

Non-TraditionalNon-TraditionalDigital

Targeting = pricing in $CPM

Mass Impulse Buy < $1.00

Demographic = $5.00

Psychographic = $7.00 - 10.00

Contextual = $15.00 - $25.00

Behavioral = $40.00 - 80.00+

Digital

Targeting = pricing in $CPM

Mass Impulse Buy < $1.00

Demographic = $5.00

Psychographic = $7.00 - 10.00

Contextual = $15.00 - $25.00

Behavioral = $40.00 - 80.00+

Non-TraditionalNon-Traditional

Digital

So where is digital media pricing going?

The new job of a media company is to be a Data company

Information is pricing power

Digital

So where is digital media pricing going?

The new job of a media company is to be a Data company

Information is pricing power

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