I was chatting with a friend at JWT the other day about how agencies can’t make money in today’s social media entranced marketplace — and I may have solved the problem. Here goes:
Say you come up a with a big engagement idea. It’s for a new product launch and you have created a fun video demonstration of the product. A couple of graduate students from NYU did the production at a cost of $4,500. You work at Publicis and know you can post the video for free and the mark-up won’t pay for the pastry at the presentation meeting. How do you price it? Staff it? Measure it? Is it done under a retainer? Oy.
The answer is simple: You price it based on delivered reach, with a smidgen of frequency. If the video is viewed 0-24,999 times (uniques) you charge $2,500. If seen 25,000 to 75,000 times $4,500….and so on.
If the video is linked to another site, Publicis earns a bonus based on other site’s traffic plus the additional views. If the video gets played on TV or a big portal, another bonus plus those views. Think of the model as part SAG/AFTRA, part pay-per-view, part Nielsen Ratings.
Now that wasn’t that hard, was it? Piece. I mean Peace!