Media Planning & Buying for the 21st Century

Chapter 2Media Planning & Buying in the 21st CenturyThe Business of Media1Size of BusinessTrendsAgency compensationThe Players: Advertisers, Agencies, MediaAgency Media DepartmentMedia Professionals ExamplesJobs in Media

Media Planning & Buying in the 21st CenturyAgenda2$776 Billion BusinessMedia Planning & Buying in the 21st Century3Ad Media Spending Trends: A Revolution(Billions $)Media Planning & Buying in the 21st CenturyMedium201020122013E2013 % ChTelevision$45$61$64+42Radio201616-20Newspapers492120-60Online83631+400Magazines221615-32Directories1255--58OOH577+40Direct Mail172221+25FSI222-Total$178$186$191+84Defining Online AdvertisingMedia Planning & Buying in the 21st Century5

Examples of Media MixesHow Advertisers Use Media to Address Their Communications NeedsMedia Planning & Buying in the 21st CenturyBrandTotalMagsNewspOOHTVRadioOnlineP&G$3139$1050$182$3$1719$7$173GM17742241527111535242A-B516313304092716McD963494727417027Cap One5096591528016154Target69496127133793541Google25813831023129Source: Ad Age, 2013 6The Media PlayersMedia Planning & Buying in the 21st Century

7The PlayersMedia Planning & Buying in the 21st CenturyAgencies*Develops media strategies & plansExecutes the plan/buys mediaAdvertisersProvides input/direction to agenciesApprove media strategy and plansApprove budgets and expenditures The MediaSuppliers of time and spaceMedia are businesses like any otherMission is to maximize sales and profit*Includes full service agencies and media buying services8Typical Media DepartmentMedia Planning & Buying in the 21st Century

9Media Service FirmsMedia Planning & Buying in the 21st CenturyClient alternative to agency media departmentMedia PlanningMedia BuyingCoordination of multiple brandsSizes range from one person freelance operations to billions in billingExamplesInitiative Media (owned by Interpublic)Media Period (small staff, local clients)10Agency CompensationMedia Planning & Buying in the 21st CenturyHistorically, media have paid agencies a 15% commission on media billings; compensation for production expenditures is based on a separate agreement.

Billing$1,000,000Commission x 15% Revenue $150,000 More recently, to save money, clients have been reducing agency commissions to as low as 10% or less and/or negotiating a fee arrangement with the agency

Currently, there is a movement among some agencies to advocate pay for performance.

Raises issue of defining performance, results and measurement

Over half of agency revenues are spent on people

11Media Planner FunctionMedia Planning & Buying in the 21st CenturyMedia Planner - generic term describing function; planners may be at any level in organizationPlanners develop strategic media plans for one or more clientsMarketing analysisTranslate marketing situation into media implicationsDefine target marketsDefine geographic & timing prioritiesSelect mediaRecommend budgetsServe as member of agency brand team for client12Role of Media PlannersMedia Planning & Buying in the 21st CenturyRole changing from traditional media planners to communications plannersNew skills needed:Marketing Strategy/PlanningIMCAll Media Traditional & DigitalNew MetricsEngagement ExpertsOptimization

13Media Buyer FunctionMedia Planning & Buying in the 21st CenturyMay be at any level in organizationBuyers negotiate terms and conditions of media buys for clientsBuyers are often specialists in buying:Network televisionNational cableSpot television & radioDigital/internetNewspapersOutdoor

14Media Research FunctionMedia Planning & Buying in the 21st CenturyThe role of the media research department is to support the planning and buying groups with media research expertise, e.g.:Evaluate methodologies, e.g. for magazine audience measurement or TV rating methodologies Recommend which syndicated services to buy, e.g., MRI vs. SMRBDevelop analytical techniquesMedia optimization modeling15Media Sales StaffSales Rep FirmsMedia Planning & Buying in the 21st CenturyTypical Media Sales StaffNational Sales ManagerRegional Sales ManagersMajor Market Sales ManagerSales RepresentativesResearch/Presentation Support

Sales Planning & CallsMedia often hire Rep Firms to extend their internal sales staffsLarge & Small FirmsUsually Regional or in Certain Major MarketsSales Managers & Reps

Sales Planning & CallsMedia Sales16Majority of Entry Jobs are in MediaMedia Planning & Buying in the 21st CenturyPlanningResearch AssistantDigital PlanningAccount coordinatorAssistant Media PlannerMedia PlannerSocial Media BuyingAssistant BuyerSpot TV/radio BuyerOnline BuyerSalesSales AssistantSales RepresentativeMarketing support (develop sales presentations, etc.)17