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What you need first

• Seller's current rate card CPP for the target audience and daypart, from the seller's rate card document
• Seller's discount tier grid tied to committed spend levels, from the seller's terms or trading agreement
• Account's committed annual or quarterly spend level, from the agency's own booking or commitment records
• Any additional negotiated or agency discount percentage, from the signed IO or trading agreement
• Confirmation of whether discounts stack multiplicatively or additively, from the seller's trading contact

The procedure

1. Pull the seller's rate card CPP for the target audience and daypart, producing the gross baseline cost per point
2. Match the account's committed spend level against the seller's discount grid, producing the applicable tier percentage
3. Confirm with the trading contact whether tier and negotiated discounts stack multiplicatively or additively, producing the calculation method
4. Apply the tier discount to the rate card CPP, producing the tier-adjusted CPP
5. Apply any additional negotiated discount to the tier-adjusted CPP using the confirmed method, producing the net CPP
6. Cross-check the net CPP against the last invoiced or reconciled net CPP for the same seller and period, producing a sanity check
7. Record the net CPP with the tier and discount percentages used and the date, for the next negotiation cycle

Worked through with numbers

Rate card CPP for W25-49 prime time on the seller is €1,150. Committed annual spend of €3.2m qualifies for Tier 3 on the discount grid, 38% off rate card. The trading agreement confirms tier and negotiated discounts stack multiplicatively, not additively. Tier-adjusted CPP: €1,150 × (1 − 0.38) = €1,150 × 0.62 = €713.00. A further negotiated agency discount of 4% applies to that figure: €713.00 × (1 − 0.04) = €713.00 × 0.96 = €684.48. Net CPP is €684.48, an effective 40.5% off rate card ((1,150 − 684.48) / 1,150 = 0.4046). Read this net CPP as the true per-point cost to load into the seller comparison, not the 38% headline tier discount, which understates the real saving once the negotiated discount is stacked on top.

Where it goes wrong

• Don't add the tier and negotiated discounts together when the contract stacks them multiplicatively, since that overstates the total discount and understates net CPP.
• Don't reuse last period's tier without rechecking committed spend against the current grid, since tiers reset every contract period and spend can drift below the threshold.
• Don't apply the discount to a rate card CPP that already nets out agency commission, since discounting a net figure a second time produces a false net CPP.
• Don't apply a total-day discount grid to a prime time buy, since tier grids are often daypart-specific and using the wrong one misprices the point.

How to know it is right

Terms used

• Net CPP
• CPP
• Discount Tier

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