Variable Gross-to-Net Discount
The 15% “Standard Media Commission” is a vestige of a bygone era on Madison Avenue when all agencies got paid the same way and at the same rate. Despite long ago being ruled illegal by the US Department of Justice, it persists in media planning. As such, Bionic has included a standard 15% discount when calculating Net Media Cost when the media is priced in Gross Media Cost.
The problem with hard-coding this into the software is the Gross to Net discount is not always 15%. Outside of the United States, if there is a standard commission, it’s often something other than 15%. In many cases, there is no standard commission and it varies from campaign to campaign based on the negotiated rate.
Furthermore, the media planning definition of Gross Cost versus Net Cost is confusing to many people, even industry insiders. That’s because they reasonably assume based on their business experience that Gross Cost is the standard list price, Net Cost is the negotiated price, and the difference is the savings from negotiations.
To solve all these problems, Bionic upgraded its media planning software to enable you to override the standard 15% Gross-to-Net Discount. In the “Basic Info” section of your campaign settings, you can set your gross-to-net discount to whatever works for you and your negotiations.
Here’s a short video showing you how to do it: