Are you paying a fair price for your video email?
We audited a clients video email contract and identified a saving of $155,500
Here’s what we discovered 👇
The client was looking to purchase 50 million video plays over a 2 year period, where a video play is equivalent to an email opener.
The contract rate proposed by the video email platform was $4.50 CPM plus an annual license fee of $7,000, equating to a 2 year contract value of $239,000.
And remember this cost is on top of the email send fees from the ESP, in this case Salesforce, so it’s a significant spend commitment.
➡️ We advised the client as follows:
🔷 The proposed $4.50 CPM for video plays was at the top end of the range, even given the discount the vendor was offering against their claimed rate card of $7.00CPM.
🔷 Once you are looking to purchase in excess of 10 million video plays an annual licensee fee should be waived. Often this fee is associated with the inclusion of quarterly strategic reviews provided by the vendor, in our experience these reviews deliver little to no value, so we where adamant this fee should be waived on this deal.
🔷 You are in a strong position, as large volume video email contracts are ultra rare, with less than 10 deals a year currently being signed. Given this the vendor has a hard pressure point to secure their share of this small number of opportunities, and as such they are open to negotiation.
🔷 We know that video email platforms operate on astonishingly high gross margins, with their video play costs in the region of $0.50 CPM + or – 15%, with plenty of room for negotiation from the $4.50CPM they where proposing.
✅ Here’s the deal the client signed:
➡️ 50 million plays @ $1.95CPM (56.7% decrease from the original offer)
➡️ $0 annual subscription fee
Total Contract Value: $97,500 (59.2% decrease from the original offer)
✅ Total Saving from original Contract Proposal : $155,500
