Tag Archives: marketing science

Is Your Marketing An Investment Or A Cost?

Never underestimate the importance of goal setting and strategy in media. While smart media buying will save you money, smart media strategy will make you money. Without a well thought out media plan you are not getting the most from your budget because you have not determined what you should buy and what you should not. While what you buy may be priced well relative to other options, buying the wrong media is wasteful no matter what the price is. And all too often advertisers and their agencies let buying lead the media process or are missing the connection between the plan strategy and the buy.

Would you use an investment strategy of buying only stocks that are less than $10 per share? And would you use the broker who charges the least per transaction because all he has to do is tell you how much of a given stock is available when you are ready to buy? Or does this sound crazy to you? It is crazy. But what’s crazier is that some companies handle their largest investment, advertising media, in this manner.

This approach is designed to limit your costs, but what you may not know is it also limits your return. Successful media buying, much like having success in the stock market, depends on good research and good timing because the basis of both is supply and demand. The biggest difference is that media buying is more negotiable than the stock market, an extra level of complexity that ultimately determines how much you will pay for your ad time/space.

And negotiating is something large media buying agencies on the whole don’t do as well as their smaller sized competitors. “How can this be?” you ask. “My agency buys gazillions of dollars of ad time, they have to get better prices than the agencies who buy less. It’s simple math. You buy more you get a better price.” Remember Lucy and Ethel in the chocolate factory in that classic “I Love Lucy” episode? That is what being a media buyer in a mega-media agency is like. You don’t have time to “wrap” the schedule properly because you have three more buys to get on the air that day.

Negotiating is about give and take, a certain back and forth. If you’re using one of these big guys chances are you’re not getting the best price because the buyer cares more about getting four buys on the air, and less about buying the right inventory. It’s easier for them to only buy the lowest priced stuff because they don’t have to worry about value. But you should because your media buy is your investment in your brand like your stock portfolio is your investment in your retirement, not an expense on your P&L.

Smart media planning let’s you know which media does and does not make sense for your efforts. It helps tell you which media to stay away from. Buying the wrong media because it’s cheap is as wasteful as buying premium priced media that isn’t right for you. Neither one will produce results.

An approach that recognizes the importance of strategy means targeting the right people at the right time, yielding a smarter use of your marketing resources. Make it easier for a buyer to buy effectively because they know the difference between price and value.

Advertisements
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A Matter of Efficiency

If you ask any media planner or buyer what the term efficiency means they will tell you that it is the way to determine relative value of different media and is usually defined as the cost per thousand impressions, CPM, of the media vehicle or buy. This results in their decisions on which media to buy being made strictly on costs.

That definition is dead wrong and leads to overemphasis on a surrogate measurement that may not correlate with sales results. Something is efficient if it is capable of producing the desired results without wasting materials, time, or energy. Can the vehicle deliver sales at a lower cost than other options? There is a cost/benefit perspective inherent in that definition. Nowhere in this description is there any indication that trying to get as many people as possible to see your efforts compared to other choices is the goal.

Making decisions based exclusively on audience cost of a media vehicle can waste tremendous resources. One of the sayings I’m known for is that the cheapest media is the most expensive media you might buy if it does not work.

Today we have so many tools at our disposal to apply metrics other than CPM to define efficiency. We also have ways to insert intermediate steps in the purchase consideration path to measure whether we are on the right track.

Are your media buyers looking at data other than audience delivery to track your progress? Are they looking at your Google Analytics data? Are they making adjustments based on how well their buy is driving traffic? Even if your ultimate goal is sales at retail there are intermediate steps that can be taken to identify what is working and what is not.

The secret is predicting in the planning stage what the potential return on each vehicle will be based on syndicated data, prior transactional data, behavioral modeling, etc. During the execution stage, make sure you align an inbound intermediate mechanism for tracking. You can use unique landing pages or promo codes, statistical modeling on web traffic, coupon downloads, social media actions or good old fashioned phone calls. A holistic look at this activity can prove helpful in making the proper optimizations to your campaign. Now that’s efficiency.

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Is The Addressor More Important Than The Addressee?

This is an important topic to discuss in the new age of programmatic buying, especially as it starts to creep out into traditional media. The historical method of advertising is interrupting content to present your message to the entire audience of a media vehicle (magazine, TV show, radio show). Okay, you could sometimes buy partial audiences based on geography or, in the case of print, extra content added for special audiences, but we were trained as media professionals to negotiate with media sellers to place our ads to a content seller’s entire audience based on that audience’s value as compared to the next seller’s audience.

Last week we met with a cable system operator who is starting to offer real addressability of their television audience based on HH data and set-top-box identity. I was thrilled because for many clients the HH is the buying unit and I’d rather message an accumulation of particular HH’s based on proclivity than a program’s audience—the former has to be more predictive to success than the latter.

That’s when our discussion got interesting. Does it matter what TV program an ad runs in or is the aggregate of addressable prospects more valuable? Some argue no because they were trained to evaluate and buy programs. But these days we’re dealing with new realities that don’t require us to buy total audiences. We have the data and the technology that enable us to deliver ads to individuals and therefore, in most cases, the venue is irrelevant. Much like most programmatic buys for online media, addressable TV frees us from investing large sums directly with content providers and now the distributor of that content, the cable operator, not the network or the syndicator is who we should be placing media buys with.

So what becomes critical with addressable TV? How about bad content. Huh? “That makes no sense”, you say. But if I want people to take action from an ad on TV I want my ad to be in content people are willing to abandon. That’s right and that’s what DR marketers have known for a long time.

Here’s where it gets even more interesting. Cable operators are selling ads to local businesses and DR marketers. Adding addressability to their quiver means national marketers with unique needs become a viable source to sell ads to. By creating an additional customer base the demand for their inventory increases, thus raising the bar for pricing on their inventory, creating another tier of ad pricing. Smart move cable operator. Extract more value from your current base and add an entirely new customer base. I’m buying.

What about you?

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