The Business of Media

CHAPTER 2

Media Planning & Buying in the 21st Century

Agenda
SIZE OF BUSINESS
TRENDS
AGENCY COMPENSATION
THE PLAYERS: ADVERTISERS, AGENCIES, MEDIA
AGENCY MEDIA DEPARTMENT
MEDIA PROFESSIONALS EXAMPLES
JOBS IN MEDIA

Media Planning & Buying in the 21st Century

$776 Billion Business

Estimated Marketing Communications Spend, 2009

Other; 14%
Promotion; 40%
Avertising; 24%

Direct ; 22%

Media Planning & Buying in the 21st Century

Ad Media Spending Trends: A Revolution

(Billions $)

Medium

2010

2012

2013E

2013 % Ch

Television

$45

$61

$64

+42

Radio

20

16

16

-20

Newspapers

49

21

20

-60

Online

36

31

+400

Magazines

22

16

15

-32

Directories

12

--58

OOH

+40

Direct Mail

17

22

21

+25

FSI

$178

$186

$191

+8

Total

Media Planning & Buying in the 21st Century

Defining Online Advertising

% Revenues

AO*
21%
*
Display
22%

Media Planning & Buying in the 21st Century

Search
47%

Search
Display
Classified
Video
Lead Gen
Mobile
* Includes classified, rich media,
Sponsorships, email, other.
Social media PPC included in search.

Examples of Media Mixes

How Advertisers Use Media to Address Their Communications Needs

Brand

Total

Mags

Newsp

OOH

P&G

$3139

$1050

$182

$3

$1719

$7

$173

GM

1774

224

152

1115

35

242

A-B

516

31

30

409

27

16

McD

963

49

72

741

70

27

Cap One

509

59

15

280

16

154

Target

694

96

127

13

379

35

41

Google

258

13

102

129

Source: Ad Age, 2013

Media Planning & Buying in the 21st Century

TV

Radio

Online

The Media Players

Media Planning & Buying in the 21st Century

The Players
Agencies*

Develops media strategies & plans

Executes the plan/buys media
Advertisers

Provides input/direction to agencies

Approve media strategy and plans
Approve budgets and expenditures
The Media

Suppliers of time and space

Media are businesses like any other
Mission is to maximize sales and profit

*Includes full service agencies and media buying services

Media Planning & Buying in the 21st Century

Typical Media Department

Media Planning & Buying in the 21st Century

Media Service Firms

Client alternative to agency media department

Media Planning
Media Buying
Coordination of multiple brands

Sizes range from one person freelance operations to

billions in billing
Examples

Initiative Media (owned by Interpublic)

Media Period (small staff, local clients)

Media Planning & Buying in the 21st Century

Agency Compensation
Historically, media have paid agencies a 15% commission on media billings;

compensation for production expenditures is based on a separate agreement.

Billing $1,000,000
Commission
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

Media Planning & Buying in the 21st Century

Media Planner Function

Media Planner - generic term describing function;

planners may be at any level in organization

Planners develop strategic media plans for one or
more clients

Marketing analysis
Translate marketing situation into media implications
Define target markets
Define geographic & timing priorities
Select media
Recommend budgets
Serve as member of agency brand team for client

Media Planning & Buying in the 21st Century

Role of Media Planners

Role changing from traditional media planners to

communications planners
New skills needed:

Marketing Strategy/Planning
IMC
All Media Traditional & Digital
New Metrics
Engagement Experts
Optimization

Media Planning & Buying in the 21st Century

Media Buyer Function

May be at any level in organization
Buyers negotiate terms and conditions of media buys

for clients
Buyers are often specialists in buying:

Network television
National cable
Spot television & radio
Digital/internet
Newspapers
Outdoor

Media Planning & Buying in the 21st Century

Media Research Function

The 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.
SMRB
Develop analytical techniques
Media optimization modeling

Media Planning & Buying in the 21st Century

Media Sales
Media Sales Staff

Typical Media Sales Staff

National Sales Manager

Regional Sales Managers
Major Market Sales Manager
Sales Representatives
Research/Presentation
Support

Sales Planning & Calls

Media Planning & Buying in the 21st Century

Sales Rep Firms

Media often hire Rep Firms to extend

their internal sales staffs

Large & Small Firms

Usually Regional or in
Certain Major Markets
Sales Managers & Reps

Sales Planning &

Calls

Majority of Entry Jobs are in Media

Planning

Research Assistant
Digital Planning
Account coordinator
Assistant Media Planner
Media Planner
Social Media

Buying

Assistant Buyer
Spot TV/radio Buyer
Online Buyer

Sales

Sales Assistant
Sales Representative
Marketing support (develop sales presentations, etc.)

Media Planning & Buying in the 21st Century