Under the Umbrella

You’ve been doing business with a site for quite some time. Month after month, client after client, there are some sites you always seem to bump up against. They may not end up on every buy, but more than 50 percent of the time they are on your list of sites to which you send RFPs and consider for a plan.

A number of different circumstances create this kind of scenario:

  • The site is one of the “big boys,” and is going to be desired for every plan you put together. These kinds of sites are almost always the portals and search engines. Their reach on one level and their targetability on another (specifically through keywords) make them a regular site to at least RFP, if not buy, for each plan you put together.
  • The property is one of the ad networks. The network buy is often part of every plan you are putting together, either because you are committing a one-time test (and networks are great for doing that), or because you are looking for monstrous unduplicated reach, and networks offer that with the wide variety of sites they can aggregate.
  • You’re dealing with a big site that gets lots of traffic and charges relatively low CPMs. These sites, more often than not, are community sites, at the ROS or run of category (a major category like “Women”). At this level, the CPMs can be kept low, and the amount of inventory that can be purchased can be kept high.
  • You’re dealing with a site that’s well targeted and that you have been running on for a while for a particular client. At some point, you will most likely even stop RFPing these kinds of sites and merely renew on an ongoing basis.

When you end up with a regular list of sites that fit into one or more of the categories above, it is time to look for ways of dealing efficiently, simply and fairly with all of them and start thinking about longer-term arrangements. It is time for an umbrella agreement.

An umbrella agreement is a contract between you as a buyer/planner (or your organization) and the sites you deal with establishing terms and conditions that are applicable to each buy you place, regardless of the client.

An all-encompassing agreement will help to streamline the planning and buying process on both sides of the table, as it were. Sites will no longer have to fill out a new RFP with each and every buy, and buyers will no longer have to negotiate rates for each placement with the site each time a new buy comes up.

This is something traditional media has done in the past, and it is something that I’ve worked out with some sites back in the “old days” of online. It has been a while since, but the notion is beginning to make the rounds again, and I think it’s a good idea.

What’s accomplished with these agreements are the setting of types of placements, creative units, commitment levels, and costs.

Types of Placements: Just where on the site is the inventory that will be covered by this kind of agreement? This is important for the site in terms of inventory management, among other considerations. It is also a factor in determining cost for placements, and what kind of revenue stream the site can expect based on how much business is going to be moving.

Creative Units: This is most important for advertisers using a lot of rich media or for a site that offers a lot of rich media. As rich media units tend to use more bandwidth and require more work, they cost more and thus contribute more weight to an overall bottom line. It also helps to anticipate the amount of time and work that advertisers can expect in execution if there is a regular amount of rich media.

Commitment Levels: This is tricky. Sites invariably want the agency to commit to a minimum monthly spending level. Agencies want something more like a commitment to activity level. Though they are related, the difficulty with spending levels from the agency perspective is that clients, particularly dot-com advertisers, are fickle, and their budgets change dramatically. As an agency, I can say that my clients – existing, new, or otherwise – will always want to buy on site X, but I can’t say with certainty for just how much. This is a difficult issue and always is the source of the most debate.

Costs: The costs should be certainly well below rate card. You and the site need to agree on what kind of savings should be afforded the agency or advertiser, given the amount of time saved and work that doesn’t have to be done in order to get the buy. But also, the commitment level is a very big part of determining costs. For the site, it’s all about cashflow. For the agency, it’s all about activity level and performance.

So, if at the end of the day, you’ve felt rained on by RFPs, and half of them are from sites that you deal with regularly, let both a master agreement and a smile be your umbrella.

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