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What you need first

• Discount tier grid with gross-spend thresholds and rates, from the station or sales-house rate card
• Current committed gross spend and GRPs delivered so far, from the media plan or booking system
• Card CPP rate for incremental inventory, from the rate card
• Net CPP benchmark or campaign target, from the campaign brief
• Tier reset date (quarterly or annual), from the sales contract

The procedure

1. Read the discount tier grid and locate the current committed gross spend inside its band, noting that band's discount rate and the gross threshold of the next band up
2. Calculate current net spend and net CPP as gross spend times (1 minus current discount), divided by GRPs delivered
3. Compute the gross spend gap to the next threshold by subtracting current committed gross spend from the threshold
4. Convert that gap into incremental GRPs at the card CPP rate, and add a 2-3% buffer so make-goods or bonus spots don't leave the booking short of the line
5. Recalculate total net spend and net CPP at the next tier, including the incremental GRPs and the higher discount
6. Compare the marginal cost per incremental GRP against the current net CPP to confirm the added points are cheap enough to pull the blended rate down
7. Flag the recommendation to push or hold based on whether the new net CPP is lower than the current one

Worked through with numbers

Booking sits at 800 GRPs and €480,000 gross, card rate €600/point, inside the tier-2 band (€250k-€500k, 5% off). Net spend = 480,000 x 0.95 = €456,000, net CPP = 456,000 / 800 = €570/point. Next threshold is €500,000 gross at 8% off. Gap = 500,000 - 480,000 = €20,000, which at €600/point buys 33.3 points; round up to 34 points (€20,400) to clear the line with margin. New gross = 480,000 + 20,400 = €500,400, new GRPs = 834. Net spend at tier 3 = 500,400 x 0.92 = €460,368, net CPP = 460,368 / 834 = €552/point. Marginal cost of the 34 added points = (460,368 - 456,000) / 34 = €128.47/point. Reading it: net CPP drops €18/point (570 to 552) even though total net spend rises €4,368, because the marginal points cost a quarter of the average rate and pull the blend down - push is worth it.

Where it goes wrong

• Don't compare the discount percentages alone (5% vs 8%); compute net CPP including the incremental GRPs, since the higher rate applies to the whole spend, not just the top-up
• Don't treat the top-up spend as pure margin loss; it buys additional GRPs at card rate, so those points belong in the denominator of the new net CPP, not left out
• Don't aim exactly at the threshold; add a 2-3% buffer, since make-goods, bonus spots, and agency-commission netting can leave the invoiced total short of the line even when the booked total clears it
• Don't ignore the tier reset date; if the contract resets quarterly, spend already committed this quarter may not carry into the calculation the sales house uses to award the next tier

How to know it is right

Terms used

• Discount Tier
• Budget Iteration Loop
• Net CPP

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