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| Media Buying Today -- The Way it Really Is |
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| By:
Gene Willhoft |
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Over
the past few years, many industry experts have discussed the rising
importance of media planning and buying to the success of an overall
advertising campaign. Having been relegated to the shadows, media
planning and buying is now acknowledged as a critical part of the
advertising mix.
As a result, media-only reviews are now
commonplace, and media consolidations of multi-division advertisers
are a given.
This article explores various media issues that I
think are, or should be important to advertisers. They include:
whether to unbundle the media when selecting a creative resource,
clout and pricing, bidding out buys, purchasing time in bulk and price
vs. strategy. |
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| Should a full-service agency handle the media or is unbundling the media planning and buying a more effective approach? |
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There is no
standard answer to this question. It depends on a number of factors:
the experience level of the media people at each company, experience
in the category, how active the account is (whether a lot of
coordination is needed between creative, media and marketing
personnel), account conflicts, size of the account in relation to the
size of the buying company, whether media budgets across divisions are
being consolidated, not to mention the fee implications of one vendor
vs. two.
I believe that unbundling the media planning and
buying can work 95% of the time. However, it may not be workable for
very active retail accounts (airlines, banks, department stores, for
example) that change creative and media schedules on a moment’s
notice. Advertisers in these categories may need to make decisions so
quickly that it is preferable if media, creative and marketing people
are at the same location.
I suspect that most advertisers could not care less
if their account were unbundled or not. I believe they are only
concerned with getting the best service they can for each discipline.
If this means splitting up the creative and media, then that’s what
they’ll do. In an unbundled situation, there may be more
coordination needed on the client side. However, after canvassing our
clients, they say they don’t believe it takes much more additional
time and most report that they like having the additional
control. |
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| Broadcast
Buying -- “Clout” and Pricing |
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As a smaller
media buying company, the issue of clout occasionally comes up in new
business meetings, although less and less often.
We all have heard the claim that the biggest buyers
get the best rates. However, over the years I have read articles from
trade publications where well-known buyers have
commented that when buying spot television or radio: “the
bigger the buying company, the more likely it is for that company to
pay
average prices.” This is a direct quote from an Ad Age
Roundtable article.
Makes sense to me. If the media give increasingly
lower prices to big and bigger buying companies, profit margins will
obviously suffer. And, there has to be a point below which rates just
will not get any lower. The only people that really know are the media
salespeople, and they aren’t telling.
Some friends and acquaintances of mine,
recognizable names in the business, have commented that any buyer, on
any given day, has the ability to get a lower price than someone else.
It all comes down to when the schedules are ordered, the amount of
money spent on each station, if another advertiser is seeking relief,
the season of the year the schedule runs, and importantly, whether the
spots have to run as ordered.
One big concern is that in a tight marketplace,
spots priced too low are regularly preempted. So who’s smarter, the
advertiser whose buyer paid 10% more for spots that aired, or the
advertiser whose media buyer had spots priced at 10% less, but most of
them didn’t clear? |
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| Bidding out Buys |
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Some clients bid out buys.
They’ll ask a few different buying companies to price out schedules,
be it spot or national television or radio. The lowest bid wins the
business.
I generally try to stay away from this process
because I view it as shortsighted for both sides:
Various conditions may cause rates to rise or fall
unexpectedly. If prices rise more
than predicted, the company that won the business will probably have
to either admit
that the going-in estimates were too low or purchase inferior
schedules to meet the
buying criteria.
What do I mean by inferior schedules? Take your pick:
- limiting a schedule to a few low priced and/or low-rated programs or stations. In other words, avoiding higher rated, higher cost-per-point inventory.
- inflating rating estimates
- changing television
dayparts (for example: paying for a late news spot at 11:00PM EST
and coding the spot as prime time), or for radio, calling the
daypart 5AM-10AM, but ordering the spot only from 5AM-6AM (at a
much lower rate).
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| Buying in Bulk |
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Some buying companies
pursue new business by saying they get low rates by pooling their
client’s funds together and buying time in bulk. This usually
happens in spot radio, although it is not unheard of in spot
television. Here a company will say to a radio station: “I’ll
spend $1,000,000 on your station throughout the year if you guarantee
me a CPM against a target audience of X (guidelines are made for
daypart distribution) for all my clients.”
This may be done without an advertiser’s consent.
And there is no way for the advertiser to know anyway.
But what happens if the buying company loses a
client or a client cuts back in spending?
In this case, in order to fulfill the commitment,
inappropriate stations may be put onto schedules. As proper due
diligence, clients should examine each station or program on a
schedule and demand answers if things look strange. |
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| Price vs. Strategy |
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Recently, a $5,000,000
advertiser came to us and asked if we could purchase spot television
and radio cheaper than their current buyer. While I welcomed the
prospect of new business, I politely suggested that before we look at
the prices paid, we should examine whether the media strategy was
sound. The thought being that while price is important, if the target
audience is wrong, then it is likely the daypart makeup is incorrect
as well. Even the best negotiators in the world can’t make a bad
strategy work.
The client eventually agreed that strategy was
foremost (not price) and was very receptive to a frank critique of its
media strategy.
I suggest that unless you are completely sure your
media strategy is right, emphasize
strategy first, low prices second.
To conclude, there is more to buying media than
meets the eye. The best way to make
sure you’re getting the most of your ad dollars is to hire a
competent, honest, firm and
then stay involved in all aspects of the process. |
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| Mr. Willhoft, 25-year
media veteran, has been Director of Media Services at three Manhattan
ad agencies. For the past six years he has been President of Absolute
Media Inc. in Stamford, Connecticut, an independent media planning,
buying and consulting service. |
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