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Top Down Costing

Marketing platforms demand that planners enter a budget amount for "working media"--this is how much media you will be able to buy after paying fees for ad serving, verification, or agency compensation.  The problem is, planners don't know how much these fees will be before deciding on how much media to buy.

With this new capability, media planners will be able to enter their budget and their fee rates, and Bionic will figure out the rest.  You'll be able to calculate your media fees accurately and be able to buy media with confidence.  It's like Goal Seek for media.  Never again will you risk overspending your client's budget, and you can do it all in Bionic.

Here’s an example situation:

  • I have a $10,000 total budget 
  • I know that 10% of that $10,000 is my agency’s compensation 
  • I know that I am going to be charged $1.50 / 1000 impressions by the Ad Server.  But I don’t know how many impressions I’ll serve!?!? 
  • I know I am going to be charged $0.50 / 1000 impressions by the Ad Verification company.  Again, I don’t know how many impressions I’ll serve!?!? 
  • How can I calculate how much media I can buy considering all of the fees that I can’t calculate??

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Start With What You Know

The first step in any campaign should be to set up your defaults for Itemized Costs and Key Performance Indicators (KPIs).  You can learn more about these topics here: Itemized Costs and Key Performance Indicators.  Of note, you can now add KPIs as a percentage of “Total Cost” for Production Fees, Agency Compensation Fees, and Delivery Fees.     

Here, I’ll add my Ad Serving and Ad Verification costs based on a price per thousand impressions:

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Then I’ll add my cost efficiency goals for the campaign based a total cost per thousand impressions:

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Enter your Placement Cost as “Total”

In the past, the two cost options were either Gross or Net.  If you are confused about the difference between gross and net, check the most popular article on our blog.  Now you have the option of entering your cost as “Total.”  Essentially, you are telling Bionic that you want it to figure out how much media you can buy including all your fees.

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Voilà! Net Media and Fees are calculated!

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The guesswork, wonky math, and Goal Seek exercises are a think of the past…

 

A few things to remember.  If you are using Bionic to solve for your total cost, and using a CPM for one of your fees, you MUST use a KPI based on Total Cost.  Otherwise, this creates what is known to most Excel users as a circular reference where the computer keeps looping because the answer is always changing. 

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