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Discount Tier
A discount tier is a spend threshold in a rate card or deal that, once crossed, unlocks a higher negotiated discount percentage off the gross rate. Deals typically define several tiers (e.g. three or four spend bands), each carrying its own discount, and the buyer's effective price depends on which tier their cumulative committed spend lands in.
Formula
Worked example
A TV deal has three tiers: Tier 1 up to EUR150,000 at 8% off, Tier 2 EUR150,000-300,000 at 12% off, Tier 3 above EUR300,000 at 16% off. A buyer commits EUR280,000 gross, landing in Tier 2: 280,000 x 0.88 = EUR246,400 net. Adding EUR25,000 more spend pushes the total to EUR305,000, crossing into Tier 3: 305,000 x 0.84 = EUR256,200 net, EUR9,800 more cash out but EUR15,400 saved versus paying Tier 2 rates on the same EUR305,000, so the top-up is worth it if there's inventory that can absorb it.
How it is used
Buyers track cumulative spend against the tier thresholds through the flight or quarter and look for ways to top up near-miss commitments, sometimes by pooling spend across brands within the same agency group, to reach the next discount band. Since most rate cards apply the tier discount retroactively to the whole spend rather than just the amount above the threshold, small top-ups near a boundary can produce outsized savings and are worth chasing before a deal closes.
The common mistake
Buyers often assume the discount applies only to spend above the threshold like a tax bracket, when most deals apply it retroactively to the entire spend once the tier is reached.