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What you need first

• Seller's rate card gross CPP for the market and daypart in question, from the seller's commercial proposal
• The seller's discount grid listing each discount type, percentage, and qualifying threshold (volume tier, early-commit window, loyalty tier)
• The sequence and basis on which the seller applies each discount, from the contract or commercial terms, including whether any rebate is a flat sum rather than a percentage
• The agency's prior-period committed spend or volume tier, if the volume discount is tier-based, from booking history
• Confirmation of whether the quoted gross CPP already nets out agency commission, to avoid discounting a rate that's already net

The procedure

1. List the gross CPP and each discount percentage separately, tagging which are true percentage discounts and which are flat rebates
2. Check each discount's qualifying basis against the seller's grid so no two discounts are keyed to the same spend threshold
3. Apply the percentage discounts as sequential multipliers against the running net CPP, one after another
4. Subtract any flat per-spot or lump-sum rebate from the result after the percentage discounts, not before
5. Calculate the effective discount rate as (gross CPP minus final net CPP) divided by gross CPP
6. Compare that effective rate to the sum of the nominal percentages to see how much the additive method would have overstated savings
7. Log the net CPP and effective discount rate in the negotiation tracker for the cross-seller comparison

Worked through with numbers

Gross CPP on a mid-size European TV market: €140.00. Seller quotes three stackable discounts: 15% volume, 8% early-commit, 5% loyalty tier. Sequential multiplication: 140.00 × 0.85 = 119.00; 119.00 × 0.92 = 109.48; 109.48 × 0.95 = 104.01. Net CPP is €104.01. Effective discount rate: (140.00 − 104.01) / 140.00 = 25.71%. The naive additive sum (15+8+5=28%) would have produced 140.00 × 0.72 = €100.80, understating the net CPP by €3.21 per point. Read the result as: the client is actually paying €104.01 per point, 2.29 percentage points more than the additive shortcut implies.

Where it goes wrong

• State the total discount as the multiplicative stack, not the sum of the nominal percentages — summing overstates savings and produces a net CPP that undercuts what the seller will actually invoice
• Apply each discount to the running net CPP after the prior discount, since applying every discount to the original gross CPP inflates each individual discount's value and breaks the compounding
• Check whether the quoted gross CPP is already net of agency commission before stacking further discounts on top of it, since discounting an already-net rate double-counts the commission
• Subtract flat per-spot or lump-sum rebates after the percentage discounts are compounded, since folding a flat rebate into the percentage chain as if it were a percentage misstates the sequence and the final figure

How to know it is right

Terms used

• Discount Stacking
• Discount Tier
• Net CPP

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