Pretend for a moment that you’re shopping for a used sedan to make those lengthy commutes a bit more comfortable. Two vehicles are in the running, the same make and model—a blue one at Lot A, and a gray one at Lot B. Both have the same low mileage, give or take a thousand, and from what you can tell, they seem to have the same features.
You’d like to do a closer comparison of the two vehicles, their features and pricing. Unfortunately, the research and decision process is similar to the typical process for planning a media buy.
It means that in order to evaluate the two vehicles, you have to pay separately for the data needed to compare the two purchases.
In every other industry, the information required to evaluate a purchase and weigh its risks and benefits is provided by the seller. Eventually that information is provided, too, by a community of people who have experience with the product or service.
But in media buying, the data needed to consider an advertising purchase comes at a hefty price. Ad agencies subscribe to data services to support their media buying decisions, and the media outlets subscribe to this same data in order to be rated and hope for a top spot.
Why not just ask the media salesperson for the data to persuade you that their station is the right fit for the media mix?
Our sales guys at both Lots A and B would be happy to provide whatever information they had in order to sell us on why their sedan best suited our needs and was therefore the better purchase. For free.
This model could easily work in media buying, too, if agencies have the tools to collect, evaluate, and take action on precisely the information they need from sellers—no more, no less. Really, there’s no point in analyzing all that data until the media buyer first knows what inventory is available.
When data has to be purchased separately for any product—even the ink and air of advertising—the added cost is passed on to the consumer.
One advertising channel that has done well to offer verifiable audience data without added cost to the media buyer is online. Audience measurement services such as Quantcast® offer online audience information in real time, generally at no cost to buyer or seller. Savvy online media buyers have numerous ways to access data about a website’s traffic, and those sellers have the information they need to show how the target audience of the campaign is already visiting that website.
Buyers of traditional media such as broadcast radio and television should come to expect the same open exchange of information for the offline part of the mix as they can get for online advertising. Internet technology and SaaS-based (Software as a Service) products can provide the kind of streamlined, collaborative, trusting environment needed for the packaging and sale of not only online but also traditional media, making it easier to buy.
Enabling the process of collecting, managing, and collaborating on advertising information allows media buyers to get the current data they need directly from the seller, at the right time in their planning process. It eliminates the need to pay large fees for complex data sets of which they may only use half to plan and buy media for their clients that year, and time spent analyzing ratings points for dayparts that may or may not even be available.
With most agencies, the margins for pure media buying are decreasing, yet offering this service is a core necessity to providing their other high-margin services, such as design or branding. Contributing to this are inefficiencies in the media buying process, not having access to the tools and information needed, or having access but paying too much for it.
See how Avenue Right is helping media buyers and ad agencies save time and money in a demo of our media buying automation solution.
Learning the language, processes, and customs of media buying can be daunting for anyone getting into the business for the first time, or trying to branch out and work with new media channels. Media Buying 101, in whatever format, isn’t all that different from Intro to Anthropology or Sociology–especially the part about targeting an audience with a message, and determining what psychological triggers result in a decent percentage of that audience taking action on the message.
Media buyers make the basic strategy decisions for their campaigns based on a set of symbols and formulas that appear at first as though they can be deciphered only by someone with a degree in quantum physics and mathematics.
The most interesting part of what we do in dealing with media and advertising is determining where, when, and how often a message will be seen or heard, ultimately shaping the experience of the audience that’s engaged in these media channels, for the duration of the campaign.
The message carries into their work commute over the airwaves or on the side of the road. It plays on the TV set hanging from the ceiling in the waiting room at the doctor’s office. It flashes a message about water safety and a sale on fishing gear—including life jackets—when we log on to check the weather and find that it will be 90° and sunny all weekend.
With the state of the media landscape, however, we no longer decide what ads consumers see and hear. They decide. The landscape is both fragmented and more targeted.
Imagine media buyers as real-time archaeologists. They are defining the cultural landscape at the same time they navigate and study it, rather than digging the data out of storage somewhere and analyzing it years later.
These real-time archaeologists are not only studying the media consumption habits of a particular social group (the target demographic), but they are shaping how often and through what media that social group receives the messages that ultimately lead to the behavior that further defines their demographic.
Do you agree? To what do degree—if any—do media buyers shape the culture around them by determining where, when, how often, and through what media our advertising messages are delivered?
There are a variety of disciplines from which a media buyer or account exec can draw inspiration for media planning and creative execution, in the arts and sciences. I chose archaeology for this post because it gives the perspective of being “down in the field,” experiencing the messages and the behavior of the consumers they target. (The billboard is big and bright, but how many people really look up at it as they rush by?) And because I’d want to wear a cool hat and carry a messenger bag.
Among the most time-consuming tasks in media buying is gathering, organizing, and analyzing information, making sense of the piles of spreadsheets, PDFs, Word docs and other formats to get a clear picture of the advertising marketplace before finalizing the media plan.
Let’s say a media buyer has decided that it’s a mix of local radio, TV, online, and few print pubs that will best reach the target demographic. That was the easy part.
Now it’s a matter of finding the latest information on the advertising opportunities in that local market, and having the tools available to act on that information throughout the planning and execution of a simple or complex media buy.
Meanwhile, the media buyer is accustomed to engaging in social media in her personal and professional life, savvy enough to include those outlets in the advertising plan.
No matter what industry we’re in, we’re used to getting information the instant it becomes available, and being able to act on that info with the proverbial “few clicks” and to share it with a hashtag or two. We like to see what our “friends” are up to without having to ask them. We watch trending topics to gain insight about the world around us, as it happens.
It’s this same real-time technology that powers Avenue Right’s media buying platform, providing not only more accurate and up-to-date market information, but also increased efficiencies by automating manual tasks.
Last week Avenue Right had the opportunity to show off our product at the Speed Geeking demo hour at ReadWriteWeb’s Real-Time Web Summit in New York City. This post expands on the talk we gave during our demo—why real-time matters to media buyers—with all the juicy details that didn’t fit into the 5 minute timeslot.
Power of the Platform
Avenue Right incorporates all media channels—online and offline—into a single platform without interfering with inventory supply and demand or negotiations, biasing information with a commission structure, or remaining static in a digital world grown accustomed to real-time information.
Powered by its user community, Avenue Right is not an ad network or an ad exchange, but rather a resource that brings offline and online local media planning and buying together, staying out of the commission chain in order to provide a non-biased exchange of information between buyers and sellers.
Media buyers can search the local media outlet database using any combination of search criteria and get an up-to-date list of relevant advertising opportunities and contact information. The database includes local radio, broadcast and cable TV, online, and print media outlets, and users can add any other media type they’d like to include in their campaign, such as OOH.
Users can assign search terms to media outlets and make them available to other users, and local media outlets not found in the database can be added and made available to other Avenue Right users. The information on media outlets in local marketplace stays up to date through a combination of efforts, including the media sellers who are actively engaged in their Avenue Right portal to help promote their inventory.
And to give things that social feel, media buyers can just check out their dashboard to see what outlets have updated their profiles lately, or responded to an RFP from the media buyer.
Managing the information collected and the schedules negotiated is a daunting task. Depending on the media mix and complexity of the buy, this could result in any number and combination of placements, and a whole lot of calculations to go with them. And sometimes—unless a format is specified—with the proposals received in as many different formats as there are response to an RFP.
Better Information = Better Media Buys
Rates and inventory change daily depending on supply and demand. Even in familiar markets, media buyers need to keep track of things like media outlet sales rep contact changes, or even format, programming, or editorial changes.
Many companies provide data designed to give some level of perspective and education into local markets; however, most of that data is already stagnant given its outdated survey methodology. But throughout the past 30+ years, this data has been considered the standard in media planning, resulting in educated guesses being made from data that in many cases is not relevant to your buy today.
Avenue Right is building a new “living” ecosystem to bring greater visibility, transparency, and efficiency to the media buying process. By taking advantage of modern data management techniques such as crowdsourcing, Avenue Right is able to get faster and constant updates for marketplaces from people who already know and understand that local market. We capture data passed through our platform during the collaborations between buyer and seller and create non-biased benchmarks, based on current, real-time information.
The information is current, relative, immediately available, and actionable NOW.
Avenue Right’s platform learns, grows, and evolves with the changing local media landscape. The technology leverages the real-time web to
Enable instant, streamlined communications and collaboration between buyer and seller,
Provide better insight into a local advertising marketplace, and
Increase efficiencies for media buyers by automating information collection, negotiation, and confirmation of media schedules.
Avenue Right is the first web-based media buying software to deliver a multi-channel media outlet database, real-time communications and marketplace data, an automation engine, and contact management as a comprehensive media buying solution. To learn more or see how Avenue Right can help your agency gain a competitive edge in the marketplace, request a demo today!
Media buyers should be able to spend more time on the activities that create value for their clients, such as negotiating placement and rates, rather than manually collecting and organizing information related to a buy. That’s the premise behind Avenue Right’s web-based media buying software.
Avenue Right founder and CEO Brian Gramer was interviewed by “Media Man” Michael Massey on his Internet radio show Your Ad Here (February 12, 2010). This is the third and final post in a series of excerpts from that interview. You can listen to the full recording of the show here.
In this excerpt Brian shares a bit of his background and experience in advertising, along with an overview of Avenue Right’s media buying software, the target user for whom the product is designed, and why a “pragmatic approach” to development works in this changing media landscape.
Michael Massey is also author of Your Ad Here: Demystifying the Business of Media and Advertising and an Avenue Right power user.
MM: Welcome to the Friday, February 12, broadcast of Your Ad Here hosted by Media Man, that’s me, Michael Massey. Today’s topic is streamlining the media planning and buying process, and I gotta tell you, anyone that does this can tell you it can be a daunting, frustrating process. Today my guest is Brian Gramer, founder and CEO of marketing technology company Avenue Right. He’s going to share how his company is working to make this process a bit less painful, right Brian?
BG: Correct.
MM: Why don’t we take a couple minutes and sort of explain how you got where you are, what jazzes you, and why Avenue Right.
BG: I got exposed to the advertising business from him when I was 12 years old. My dad brought me to his agency one day, and he said, “We’re going to do some mapping so we can target my clients’ customers and figure out where they’re coming from.”
In the 1980s with advertising, there wasn’t a lot of technology, and my dad’s agency was doing their books by hand. And shortly after that they got their first computer and with it an accounting process.
But he put up a map, which was the state of Minnesota and counties in North Dakota, and took the receipts of his clients and gave me some tacks, and he read of the zip codes from the receipts for where the customers were for his clients. I put the thumbtacks on the board, and that’s how we figured out the geography of where the client’s customers were coming from by looking at where the tacks were.
Then he’d draw up a report by hand and deliver it to the client and say, “Based on where the tacks were, here’s where most of your customers are coming from percentage-wise, and I’m going to break it down county by county. We can continue to build brand awareness and advertise where your customers come from to keep that competitive advantage, and/or we could market in other areas around where your customers come from to try to get other people to visit your retail store.”
But anyway, that was my first exposure, and I’ve been interested in it ever since. So I’ve been for more than 20 years now exposed to the advertising industry and that was my first love.
At the age of 28, I started my first company. It was a niche search engine to help high school kids find colleges, started in 1999. Then I got into the database marketing space and started a marketing automation company called Vtrenz, and after those two ventures, I decided to start Avenue Right.
MM: Tell me who your primary target is. You’ve said media buyers, but can you say more about that?
BG: Yes. According to the Bureau of Labor Statistics, there are about 30,000 advertising agencies that have 100 employees or less in the United States, and represent about 20% of all media bought in the United States. But the smaller part of the media spend in the US is about $60 million dollars.
Depending on how well the economy is doing and what report you look at, there’s about $300 billion dollars spent on media, annually, in the United States. Most of that media buy is done by the largest brands and largest agencies, okay, and so 80% of it is spent by them, but 20% is spent by these smaller agencies.
MM: Like me.
BG: Right. So that’s who we’re going after. Because most of the products being built are addressing that larger side of the market, and they’ve neglected to provide products that are affordable and pragmatic for small advertising agencies.
MM: You know what, that’s a perfect mission statement right there, Brian. That’s one of the things that turned me on to this particular product.
BG: That’s why I was saying you have to pick what functionality you’re going to build first when you start these things, and so we decided to address the biggest problem first, which is collecting information. But now we have a customization rolling out in a near-term release where you can actually pull in and manage all the different media, even if it’s not in our searchable database. You can add stuff in there and customize it for budgeting and reporting purposes. And so that’s exactly one of the things we’re adding is the ability to do that, based off feedback, and it’s always been on our roadmap. The question was, what priority are we going to give it, and right now it’s a very high priority.
MM: We just got a question so I want to be sure we address it. Why would someone use this sort of product over something like a Strata or a Donovan or a SmartPlus or a Google TV.
BG: I think all those products have their place in the marketplace, and I don’t think they’re going anywhere. Some of them are very, very expensive, so we like to build pragmatic software.
One of the things I would say first off is that in relation to this, some businesses need QuickBooks to run their accounting, and some need programs like Microsoft Dynamics and these huge accounting programs for companies that have multi-national operations in 80 countries and they have 4,000 users using the accounting system, from office admins to controllers to CPAs, right? And with QuickBooks, it’s an office manager that needs to input simple invoices and billings and stuff, which most businesses need QuickBooks, not the big one.
It’s not that these other systems aren’t valuable; it’s just way too much functionality for their needs and way too costly. Some of the products they described, that’s the limitation—it’s way more functionality than a small agency needs, and it’s too costly. That’s going to be the determining factor for the agencies. People don’t need all that functionality in many cases, and they don’t want to pay for if they don’t need it.
Strata is a different product. I don’t even think of them as a competitor. They do a great job, but for a bigger agency that needs all that functionality. And so in many instances small agencies bit the bullet and said this is the only choice I have. I don’t need 80% of the functionality they’re delivering, but I’ll buy it.
The second thing is that they are limited by media type with a lot of the products. The third thing is that many are seller-side solutions and we’re a buyer-side solution. Our whole goal is to make tools to make media buyers more efficient, and we think the sellers will naturally come. So again, we’re making buy- side solutions, not sell-side solutions.
MM: Another question we got is to have you share, in your opinion, what are one or two strengths and one or two weaknesses that you feel are there in Avenue Right.
BG: One of the strengths is that we’re multi-channel, media agnostic, and not involved in the commission process. We don’t have any financial stake between the buyers and the sellers, which allows you to things a little differently, and better.
Another strength is that we look pragmatically and simply at the problem, we try to add the most valuable functionality that solves your biggest problems first. We know it’s not going to solve everything, but I think our pragmatic approach is why people are buying us, even though the system doesn’t do everything already that they wish it would today.
The disadvantage we have is that we’re new, so we’re finishing building our roadmap.
The other disadvantage we have—and this is a disadvantage for everybody—is that the media buying landscape continues to get more complicated. And this is always going to happen in media, so you’ve got to make the system flexible like we’ve talked about so you can customize it and have an open API. But the disadvantage for all of us is there’s always a new type of media. There’s always a new outlets being created. There’s always someone else providing content and trying to make money off advertising, you know. So being fluid.
That constant change is a disadvantage for a software company because you really have to think about how you develop the product in a world of constant change, and if you’ve never done it before, it’s really hard to do. So I think that’s an advantage for us is that we’ve done it before.
Media buyers should be able to spend more time on the activities that create value for their clients, such as negotiating placement and rates, rather than manually collecting and organizing information related to a buy. That’s the premise behind Avenue Right’s web-based media buying software.
On February 12 Avenue Right founder and CEO Brian Gramer was interviewed by “Media Man” Michael Massey on his Internet radio show Your Ad Here. This is the first in a series of blog posts with excerpts from that interview. You can listen to the full recording of the show here.
Michael Massey is also author of Your Ad Here: Demystifying the Business of Media and Advertising, to be released next month, and an Avenue Right power user.
MM: Why don’t we take a few minutes to explain how you got where you are, what jazzes you, why Avenue Right?
BG: When I started Avenue Right 2 years ago, I said I’m going to solve a problem and it’s this—how do we create one place for media buyers and advertising professionals to go and find media buying opportunities for their clients so they don’t have to manually gather this information?
The thing is, you can say that seems pretty simple, is that really going to provide value? And what I’ve found talking to advertising agencies is that they spend half their time manually collecting information. And the information they collect isn’t secret information, it’s not private. It’s media sales contact information and email addresses for media outlets. Things like rate cards, media kits.
This is what the media buyer has to do all day long instead of the things that they do really well, that provide value for their clients, like strategy and planning and placement. They are spending a good portion of their time just collecting information that I thought should be automatically collected and updated somewhere. It shouldn’t have to be manually collected all the time.
But the reason this is always manually collected is that the information changes all the time—rates change daily, the media outlet sales department has a 100% turnover, depending on the outlet, and inventory supply changes.
And now with the Internet, there are no barriers to creating a media publisher, or creating and distributing content. So there are more and more options, and how do you keep up with all that? That was the creation and idea of Avenue Right.
MM: Give me some typical examples of what media buyers are wanting, 5 or 12 things everybody wants. I can’t be atypical in some of the demands I’m making.
BG: You would think there would be a lot of commonalities in what media buyers want, but there are a lot of anomalies. And you have to manage all those needs so you don’t create too complicated of a product, but create the core functionality that provides the most value.
They do want visibility into what they’re doing in more granular detail, but they also want to provide that visibility to their clients. Any kind of reporting we can provide agencies, they can provide their clients, so the agency can show the value that they are creating for their clients. So if you think of media buyers in the past, all the work they do doesn’t show up on a neat client report. Negotiating with media outlets, all the services you provide, theirs wasn’t an easy way to show clients all that value you’ve created for them, all that work.
MM: Brian, I’m going to record what you just said, and send it to all my clients.
BG: Well, it’s been a difficult thing, right? One of the things we’re doing to augment our product is try to continually provide our agencies with better internal reports, for your own internal processes. How much media did you buy across certain geographies, how much media did you buy by client?
MM: As a buyer, I’ve been doing this for 12 years, and before that I was a seller of media. And really, when you’re working on a media plan, a lot of the work is up front, because you’re doing exactly what you just said. You’re contacting the media properties, you’re negotiating, you’re gathering all the data, you’re putting the plan together, you’re putting it in a nice report and then you just have to kind of shepherd it for 6 months or throughout the year or whatever it is.
But there is a ton of work that goes into it at the beginning. And I’m not even including the constant influx and volume of email and phone calls you get from media reps.
So any time you can show a client that this is the time you spent and the value created, there’s something to that.
BG: Yeah, that’s exactly the kind of visibility they want to provide if they are using an automated system to do some of their process. It’s very difficult to buy media if you have to manually do it in a spreadsheet after you’ve done all the work.
Other feedback is related to reporting and it’s being able to integrate our system to other tools to get data out of those tools. Even if you’re doing social stuff, or anything, any data source you might want to pull or you’re managing some other type of media buy that doesn’t go in our system.
For example, if you’re managing search for your clients, you can pull that data in and report on it on the spot. And that’s the other request we get—incorporating other data into our system to pull that data into the same system as their offline buys. So we’re going to work on integration—that’s feedback we’re taking to heart and going to make happen.
MM: Can you say more about the actual modules that are available? Originally I think it just started out with radio and print, but in the near past you’ve actually added some other components. Do you want to talk about those briefly?
BG: We’re in version 1 of TV, cable and broadcast. And again we’re taking a bunch of feedback from users to enhance that. We’re probably in version 4 of radio. Print includes magazines and newspapers, but if you look at online, our approach and what we want to represent is local display advertising.
So an example of that right now in our system would be a local newspaper that has pushed their content online, right? They are moving their content online, and some of those content sites have a lot of traffic for their geographies, and they can prove it. A ton of reach and frequency for a particular geography.
MM: I’m all about unique and new media, so I’m your timeline there for architecture. Are you guys going to look at mobile advertising, texting?
BG: Yeah, mobile is a big one. Our approach is this, and it’s a really simple approach—we’re going be the platform to take whatever data is necessary for you to plan budget and report on your media to your clients. At worst case you can enter and create these categories yourself in the tool if they don’t exist.
MM: So I’ll have the ability to customize it myself.
BG: You can customize it yourself, right. Let’s say you customize it and put in information on a billboard company, or say it’s park bench advertising on the busiest street in some city you advertise in for a client. And it just happens to be a great advertisement because of the type of client you have and the traffic that it gets.
So let’s say its park bench advertising and you put that in our system. See, we’re a software as a service, we’re a platform. If that information is not private, and its public, meaning the park bench advertising company wants to sell more advertising to other people, not just you and your clients, we release that for the whole community. So the next time somebody comes into the system, now that company is listed and that category will be listed. That’s where we’re headed.
MM: You’re almost making it like a Wiki, a community.
BG: It’s crowdsourcing, right? That’s the advantage of the platform, crowdsourced by the community. In addition to that we’re going to add some community features onto the tool that allows agencies to rank media outlets.
MM: Oh, watch out for that one!
BG: So the idea is to let you customize your dashboard, customize your reporting.
We’re always going to be developing, enhancing, and we’ve got that built into the cost of our company. And that’s an advantage to customers, too, an advantage of being a SaaS product. With on-premise software, you develop all this functionality, and then you release it and everyone has to get the old version off their desktops or laptops and load the new version, right, and transfer their data into the new version.
In our world, you don’t have to do that, so we can monthly releases and constantly change based on your feedback to enhance the product. And that’s what we’re going to need to do to be competitive and stay ahead, because again, it’s always changing.
It’s the time of year that’s full of predictions, especially in the media and marketing space. This is another one.
Common themes among the predictions for 2010 are more distributed content and media consumption patterns, more personalized experience with brands and engagement through social media, the rise of mobile, and a continued shift toward digital from traditional media.
So where does this leave media buyers?
We have ad networks and exchanges that attempt to streamline the buying process for targeted online advertising, and enterprise-level, on-premise software programs for planning and buying traditional media. Somewhere in the middle are internal processes and systems from demand-side platforms to spreadsheets and sticky notes. And data. Lots of data.
How media and technology converge this year could be the answer to a fragmented media landscape and the cumbersome buying processes that come with it.
Traditional & Online Advertising
Advertising in traditional media isn’t going anywhere, despite the growth in online spend and the decline in traditional media spend. In fact, a recent MediaPost analysis found that the percentage share of spending for each medium (except newspapers) hasn’t really changed. It’s just that online advertising (not to mention mobile, video, etc.) continues to increase, and the apparent decline in traditional spend is just a leveling out of ad budgets to make room for digital media.
Nonetheless, it seems the coming year will bring a continued decline in traditional advertising spending, though not to the degree we saw in 2009. eMarketer CEO Geoff Ramsey also points out in his 7 predictions for 2010 that social media advertising will level off (it’s better earned), and advertising content and relevant creative will become a focus of 2010.
Technology & Innovation
This post isn’t about which media types will rise or fall in the coming year but rather the advances in technology that will enable the process of planning and buying these mediums to reach local consumers and stand out among the noise.
Increases in buying process efficiencies will improve the ROI of advertising in any medium.
The concept of bringing these systems and processes together into a single über media buying platform is not new. Some industry giants have attempted to provide the tools to buy broadcast and print media with the same convenience of running paid search campaigns through their platform, though met with little success.
At the heart of it all is an attempt not only to streamline but somewhat standardize the process of requesting proposals (RFPs), one of ClickZ’s digital media predictions for 2010 . The standardization of digital media buying through online platforms could scale to traditional media as well.
But the platform that succeeds this year won’t push the media buyer into a process both prescribed and limited by the technology they use, or the medium they’re buying. It will simply open the channels of communication to facilitate information collection and analysis, process management, and execution.
And just as marketers are finding new ways to incorporate social media into their strategies or manage their media buys in a single stop with the some level of simplicity we’ve grown used to in today’s applications, these same concepts will drive the advances in and adoption of new technology that challenges current media buying models.
In essence, the technology that will help us adjust to the fragmented media landscape needs to include, at minimum, the following concepts:
Increased efficiencies in process via internet access to comprehensive platform
Real-time information driven by platform users and marketplace activity
A connection of buyers and sellers through communication and “social” tools (content tagging, recommendations, comparisons)
Customizable tools to plan, buy, and compare any medium
In an iMedia Connection video that takes a look at the marketing platforms that will evolve in 2010, Nancy Marzouk (VP Sales, x+1) explains the industry activities to watch in the coming year will be how agencies increasingly adopt advances in technology, how the base technology built years ago will hold up against innovations in today’s technology, and how multiple media types will be adopted on the ad exchanges and online platforms. The example used in the interview was video, but this could also apply to the notion of using online tools to buy and sell offline media.
Information Exchange
And another key piece of the puzzle is real-time data, a concept with a variety of different applications. It hasbeen at the forefront of industry news lately with Nielsen’s decision to drop live local TV ratings in favor of live-plus-same-day to account for DVR viewership, and the reversal of the decision soon after under pressure from agencies and industry organizations. Among the concerns with live-plus-same-day ratings was the potential inflation of audience numbers.
Alas, the quest continues across media types to find a way to accurately measure audiences as engagement with a medium or the content delivered changes within a marketplace. Media buyers look for more accurate and real-time data, but it must be transparent and unbiased.
The need for better data has an interesting implication for media buyers—the ability to do real-time comparison of advertising opportunities and proposals, maybe even with the benefit of potential reach and frequency calculations.
Bringing it all together will be the platform that allows buyers and sellers to interact and share information, using social concepts of tagging advertising opportunities that appeal to niche audiences or adding new media outlets as they arise. This will allow marketers to reach their consumers through long tail media buying opportunities as well which, for local advertising, will no doubt become increasingly more viable channels to reach targeted consumers in the time, place, and medium that works for them.
Media buyers in 2010 will demand the information, communications, and flexibility among the tools and systems they use to plan and measure multiple media types that reach a targeted audience.
The challenge for new media buying technologies will be to incorporate all mediums—online and offline—into a single platform without interfering with inventory supply and demand or negotiations, biasing information with a commission structure, or remaining static in a digital world grown accustomed to real-time information.
Want to see how this will work in 2010? Contact us.
Here’s a look at how the changing media landscape changes our behavior as consumers. Check out the stats on the rise of newer media and the decline of traditional media.
The video promotes The Economist’s Media Convergence Forum coming up this October. Thanks, Junta42, for passing it along.
There has to be a better way to plan and buy advertising media without all those manual tasks, right?
Technology these days doesn’t have to replace human interaction, but rather enhance it.
For the media buying process, time spent can be focused on planning and campaign optimization–not the transactional communications and tasks that are more like managing an engineering project than a creative ad campaign.
Every medium has value, because they all have readers, viewers, and listeners. But some are more valuable than others given the goals of an advertising campaign.
How this value is determined is through calculating and comparing CPM (cost per impression) for each medium considered for a campaign—the number of viewers, listeners, or readers / the cost of the inventory. (Check out our glossary for more on CPM.)
In order to negotiate, you need to understand audience numbers, placement, and rate.
So, what is an advertiser to do? Are there any methods advertisers can use to negotiate rates with the kind of market volatility described in Parts 1 & 2 of this post? Yes.
1. Never pay rate card.
2. Ask the media outlet to give you third party validated audience information for the specific inventory (placement,daypart, program) they are offering you.
3. Negotiate placement, daypart, or program as much as rate.
4. Work with a sales rep, not a manager or owner.
5. Find tools or systems that can give you benchmarking data on average rates by medium, geography, and placement.
6. Ask for value-adds and free remnant inventory as a bonus.
7. Test, measure, and repeat.
When Supply is greater than Demand, the price should be lower. Keep this in mind when negotiating.
Remember the audience is the demand side of the “supply and demand” equation. All the inventory being sold has different demand for it depending on what the content is, how the content is being delivered, and when the content is being delivered.
Right now almost all media has plenty of supply—the media world is so fragmented, and there is finite demand.
First, every medium is different, and this influences the rate structure and fluctuation for a given medium.
Broadcast media (Radio and TV) have finite amounts of supply.
There are only 24 hours in a day, so if their content was strictly commercials, the most they could sell is 24 hours worth of airtime per day.
We know that they don’t only run commercials or nobody would listen or watch their station.
We also know the demand for their content decreases at different times of the day, such as a smaller audience during overnights (Midnight to 6AM).
Further, viewers and listeners tend to be fickle and change monthly if not weekly what kind of content they are interested in.
Thus, the demand side of the equation for Radio and TV is always in flux—the demand for their content. This creates a lack of visibility for the advertiser into the available inventory/supply of broadcast media along with the demand for its content.
Ultimately this all leads to a volatile pricing model for the TV and Radio industry and monthly, weekly, and sometimes daily price fluctuations of their inventory (rate cards) and oftentimes non-standardized pricing models.
Different rates are bought daily for the same type of inventory depending on if you’re a local agency vs. national agency, whether you’re a friend, or it’s political, etc., etc.
Print is a little different because a publisher can just print additional pages if they run out of supply; however, there’s a cost in the form of ink, paper, and people for the additional pages, so there isn’t an infinite amount of supply after all.
Print has higher cost structures when it comes to overhead, human resources (writers, editors), distribution, and capital expenses than the other media, so they have a minimum price they need to set in order to break even.
The problem publishers are experiencing now is that their minimum price based on their cost structure in many cases isn’t perceived as being as valuable as other mediums; they are having a tough time competing, so demand for their product is down.
Many major print publications have closed operations recently and/or are starting to lay off people and move their content online.
I think you’ll start seeing a more fluid pricing model in the print world in the near future, so be ready to take advantage of it.
Online has changed the game. The problem with online is that there is a seemingly infinite amount of inventory, and the demand for that inventory varies widely across the spectrum of no-demand to high demand.
Since the internet can create what seems to be an infinite amount of supply, many internet advertising publishers have been forced to change their revenue generation models from paying for view/impressions to paying for actions/clicks or conversions/leads (performance-based).
But for the most part, the internet is very similar to Radio, TV, and print for one reason—no matter what the supply side holds for each medium, whether it be finite (print, broadcast) or infinite (online), there is a finite amount of demand. This means there is a finite amount of people in the US and world, and there’s a finite amount of time they can spend consuming content in any medium.
Keep reading – Part 3 of this series offers some tips on negotiating rates no matter where in the supply/demand curve a medium falls.
