Simpler Digital pricing & Packaging – Worksheets Included

Inspired by a Pricing and Packaging webinar shared by  Kenny Katzgrau of Broadstreet, we created some worksheets in Google Sheets to use to create ad packages and pricing that roll them up into an overall revenue plan.  Pick a model and make it your own.

Kenny advises to a. start with the end in mind – the revenue goal to cover costs plus 20%, b. divide into a limited number of packages, c. check that they are unique products and provide enough value to get a “wow” from advertisers, and d. keep it simple.

Not an easy task! But he’s not the only advocate of this basic approach. Nearview Media also recommends limiting packages to a  smaller number of partnerships that sell out and beefing up value – along with doing a reality check against the upward limits on price. We’ve included a CPM chart from Broadway as a basic guide at the end of this report.

In the meantime, we’ve created three overall revenue models to consider and worksheets to get started on a scarcity partnership model:

1. Small, medium, and high-priced packages on a share-of-voice model with pricing blocks that add up to the revenue goal.

2. Eight all-inclusive share-of-voice partnerships that add up to the total revenue goal, a model shared by John Bennett of Nearview Media.

3. A one-advertiser per ad unit model adds to the total revenue goal, also suggested by a member.

PLEASE NOTE: Any mistakes in deploying concepts or the worksheet are ours; we are just working off Broadstreet’s ideas.

Please DOWNLOAD OR COPY these documents so that you are working on your copy, as they are shared from Google Docs. 

1. Eight partnerships model 

This approach takes all the media’s inventory, including the website, social posting, and newsletter, and divides it into eight share-of-voice partners, each with exclusivity in their category and a significant presence.

In other words, there is only one package – though it can be customized – with multiple units and shares of voice.

This is an excellent approach for B2B  categories that reach high-value corporate decision-makers, mainly if the media has limited sales staff but great industry insights they leverage into an actual partnership model that includes sponsored content that addresses the audience’s critical needs. You can also invent extras, such as branding on an area of the site.

A note from Johnn Bennett of Nearview Media, who has sold this model: a scarcity sale requires discipline and sales training. When you reach eight sales – or whatever the number is that you choose – other interested customers must go on a waitlist. Current customers know other customers are on that waitlist, too, making them less likely to lose their spot.

Whether you only sell partnerships or combine a few exclusive partnership packages with other packages, this holds. Typically, a limited number of high-priced content partnerships are included in the overall plan, along with banner ads and other products.  Do your own double-checks. Is there enough in these partnerships that a significant advertiser could not turn it down? Are you excited to sell it?

Also note that in some cases, the sponsored content partnerships have evolved into running client-owned content programs, which command much higher prices, as they replace a half or full-time employee.

2. Exclusive Advertiser per Ad Unit Model

One publishing company, Spotlight Media, which runs online sites and magazines in several cities in North Dakota, uses a “one advertiser” per ad unit model with annual contracts.

We’ve reinvented the concept here with nine ad units with a 100% share of voice for nine different advertisers. You can add industry exclusivity for a faster sale. Again, this is not Spotlight’s exact model, only our version of their scarcity concept. Make it your own with your products, pricing, and testing.

We only added a package worksheet on a tab at the bottom of the worksheet for Billboard ads, however, we suggested you create all of them and go through the checklist.

When selling and marketing, a great strategy is to have one sheet with all the positions and the ones marked “Sold” crossed off.  You can also sell multiple positions to the same advertiser for a small discount.

It’s harder to build a vast revenue number with this model, but for smaller print magazines who want to create FOMO, cover their basic business costs, and sell annual contracts, this a simple model to launch, easy for sales reps to understand, and to add onto print packages.

Note that this plan has a somewhat arbitrary number of products: nine.  But in the double-check for value,  our reasoning went something like this:  More than three premium banner ads (right side) would create less attractive positions below the fold.  On the other hand, an interstitial sponsored-content ad could now run across the entire page and be a more exciting and valuable position. The logo tag position is a unit sold by Broadstreet that is extra valuable because, though small,  it runs on every site page.

Combining approaches for small/medium/high pricing blocks 

A combination of lower-priced, mid-priced, and higher-priced ad blocks is often ideal to meet the variety of advertisers in some markets. Even some national B2C niches, along with hyper-local communities, have a combination of smaller brands and heavy hitters (restaurants versus hospitals, for example).

Note that the small, medium, and partnerships model has five unique packages and 32 total sales before it is sold out at about $20,000 a month.

It allows more flexible pricing based on business size but also requires some sales horsepower to “sell out” and training on qualifying advertisers.

Again, train reps to count employees and find what kind of advertising the client is doing on, say, Facebook, as a way to qualify which packages to sell to whom. It is better to ask how many employees they have, in other words, than “What is your budget”?

Note that every package still has built-in scarcity.  Add value by throwing in other value: a social welcome post and/or email newsletter mentions for upcoming events and sales. You can even reserve a week of a billboard advertisement- if you require them to schedule it at the time of close and limit it to the first five or another number taken out of the total weeks offered to other advertisers.

Also, note that a few of the shares-of-voice for a medium-priced ad unit can be reserved as inventory for a higher-priced extensive partnership, as it is here. For example, if two premium ad unit positions rotate among eight advertisers, but two shares-of-voice on each team are reserved for the higher-priced partners, leaving six.

Checking against value,  1/of eight may be too high for a local site with only 25,000 visitors, but find for 1 of 4 events listed in each of two newsletters per week.  Use the process above, and check against ranges you can command based on the exclusivity of the audience, buying intention, and uniqueness of the product.   Montclair Local sells up to five shares of two or three right-side ad units on their hyper-local community site with 100,000 impressions.  The time-strapped independent contractor working commission beefs up interest and saves time by bringing in pre-built eye-catching units shown on the website in preview mode.

We also took the ideas for  “spotlight” ads from Montclair Local, which sells eight below the fold for $25 a week. But that’s not the only model to use.

Here’s how Broadstreet visualizes breaking the small/medium/high-priced models into blocks: 10 at $200, 5 at $1000 and 5 at $2000:

All the packages are in tabs under the overall model. You create a worksheet for each package and work through all of the criteria. Who is the likely customer in the number of employees and potential industry?

Is the package unique – even if what makes it unique is only your direct exclusive audience? This description will help create the sales one-sheet.

Is the value great enough to excite advertisers, including limits on the share of voice or industry exclusivity?

If you have thrown in everything your media can do – is it still simple to execute? Can you complete the entire sales and delivery process in two hours and still provide great value? Can you boil down the method to a Google doc that an intern can follow?

A key difference for this model is that a total of 32 packages can be sold. Media that don’t have sellers to manage this number of packages can consider adding a hunter on commission only.

FOR ALL MODELS – Steps to customize

1. Start with the revenue needed. We added up the number of required revenues to meet expenses at goal, plus added a 30% margin. Plug in your number at the top of the worksheet under “revenues needed.”
2. Price packages in flat fee blocks and include blocks sold to create a basis for share-of-voice sales. When sold out – or when you reach what you think you can sell – it should add up to your revenue goal.  Note the share of voice model based on the number of blocks projected to sell. For example, 1/4 is a share of voice at 25% or one of four advertisers rotating through the position.
3. Give each package a name, and list what is in the package.
4. In each package’s separate tab (bottom of the worksheet), identify the target customer by employee size and the relevant industries that might be interested. These “package worksheets” allow the team to check against your criteria and tweak what goes into them.

Types of products to consider:

Criteria checklist for each package:

1. Is the package unique compared to what the competition offers?
2. Is there enough value in these packages to make them exciting to sell – and to buy? Are they something the advertiser “can’t refuse”?
3. Do you have ad tech to make the package simple to create, sell, and deliver in two hours? If not, what is needed?
4. Who is the target customer by employee size and potential industry categories?
5. If necessary,  check against CPM to see if the range seems reasonable – a sanity check, as Katzkrau puts it.  A chart is included below.
6. How many blocks can each of your sellers close in 90 days? Does that allow you to reach the revenue goal?

CPM checklist

Again, This checklist from Broadstreet is only a rough guide showing some ranges. The higher ranges in both whole dollars and CPM are typically for larger businesses such as hospitals or B2B categories with difficult-to-reach audiences and higher dollars at stake.

Many thanks to Kenny Katzgrau for another great webinar that got us started. If you want to look at Broadstreet’s ad units, you can reach him at Kenny@ Broadstreetads.com. For a consultation on your revenue model, contact Alisacromer@gmail.com.

See also five reasons publishers undersell digital products,  and Four Pillars of Pricing and Packaging, foundational to using these worksheets.