Hannah, your pitch sounds amazing we’d love to work with you! So, how much do you charge? Um… Four… Twelve? You all want to know this. In this video, we’re going to talk about how to find the right price in a brand deal and we’re going to share our process that you can copy and apply to your own channel. When working with brands, and especially if money is involved things can go wrong. It certainly happened to us, and in hindsight, it could’ve been avoided. The first rule of the brand deal is don’t be random. It is difficult to justify a price if you don’t know why you’re asking for that price. Second rule of the brand deal don’t underprice yourself. If a brand promises you future work in order for you to lower your prices or give them a discount, be careful.
But let’s get specific. The price of a brand deal consists of three different parts. Part one is the creative. That is basically your time and production costs to produce the video. Maybe you already have a team that helps you, that needs to be paid or you need to license music or a stock video or you need location permits or you have insurance for the production that needs to be covered. Think about all the costs involved in producing this piece of content. And, jobs that you can only do yourself because you are, for example, in front of the camera and you are the face of the channel. Well, those costs double because you can’t multiply yourself. Media is a fee spent by a brand in order to reach an audience.
It can be paid to a TV station to get them to run the brand’s ad during Super Bowl. Or it can be spent on YouTube to get them to run the brand’s ad in front of other videos. But it can also be spent on you in order for you to include the brand’s message in one of your videos and reach your audience. So media is calculated in CPM: The cost to reach 1000 people. So how do you get to your CPM, your price? Just ask around. You can call a newspaper or a TV station and ask them how much it is to run an ad in front of their audience. And you might be surprised to hear but some of them even publish these numbers on their website and you can just look it up. If a brand wants to use your video for their website or uploading on their YouTube channel or another one of their platforms don’t forget to charge a buyout.
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A buyout is a fee that you charge when a brand wants to use your face on any other platform but your own. So, just as a reference, in Germany we would change one day-rate extra for one year online and three day-rates extra for one year on television. In negotiations, stand your ground. Be confident. And you can be, after all, you know why you charged this price. It’s not random, it’s not a weird number that you pulled out of a hat. You know why you need this money to produce this video. Bottom line: be sustainable and scalable. Overall, try to figure out how many videos you can do realistically in one year and then think about how much money you need in one year in order to cover all of your expenses and be profitable. Now you have the ballpark of how much money you need to charge. In the next video, we’ll answer some of the questions that creators ask us over and over again and that we wish could’ve been answered for us when we started working with brands.
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