Why measuring media value is more important than media cost

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This post is by Darren Woolley, Founder of TrinityP3. With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

This is the next in a series of one-minute videos that address one of the many complex challenges facing marketing, media and advertising today.The Golden Minute series is an attempt to prove Albert Einstein right when he said “The definition of genius is taking the complex and making it simple”.

But he also said “Everything should be made as simple as possible, but not simpler”. So we will leave it for you to judge. Please let us know here if there is a topic you would like us to cover in a Golden Minute.

Mega successful investor, Warren Buffet, famously said “Price is what you pay; value is what you get”. But when it comes to media the discussion is almost always about price – price and quantity such as GRP, CMP, Impressions, spots and the like.

These are all measures of quantity of media and quantity of audience delivery, but rarely is there a measure of quality. After all, quality of media is a much more difficult attribute to measure or validate.

But the lack of quality measure or at least the difficulty in creating one should not be the reason not to try. The lack of this quality measure is what contributes to the perception that media is simply a commodity that is to be negotiated and bought by the ton.

In fact it was only recently that a long term marketing procurement specialist tried to correct me on this, saying that media is the oldest commodity in advertising. But there are some major implications if you accept that media is simply a commodity to be purchased as volume at a price.

The first issue, which we are already witnessing, is the treatment of media as a commodity as evidenced by a procurement approach for media based on value and price. I remember the first time I was witness to a procurement process of a reverse auction on media buying with the buyer asking agencies to bid on supplying media with a committed cost per thousand (CPM) with the lowest CPM bid the winner.

Even as recently as the past month we have seen media agency contracts awarded based on a commitment to the lowest cost per volume, without consideration for the performance and relevance of that media being purchased.

But without the measure of quality of the media inventory it is difficult to justify a higher cost per unit. We understand this and have worked with many advertisers to provide a measure of quality and the most compelling measure of media quality is performance.

Ultimately the reason for investing in any media channel is to deliver a desired outcome. By working through the marketing, channel and media strategy we focus on defining the specific outcomes desired and the media attributes that contribute to these measurable outcomes. Only by building a business case for the media investment have we been able to substantiate a media buying strategy that is no longer based on the lowest cost alone.

One of the key issues is the ability of a media channel to not only deliver a real person, but a person that is identified as a customer or potential customer and delivered in a manner, place, format and time to be received and to encourage a response from that customer.

Of course this means that the channels and metrics will be specific to the strategy. This is often an issue as many advertisers are looking to embrace an industry standard, but the fact is the complexity and fragmentation within the media landscape means that there are diverse strategies and multiple outcomes.

Aligning media strategy to the business and marketing objectives means the delivery of the outcomes. This places the focus on the delivery of those outcomes rather than simply the cost of the media alone. It is a performance based investment model and replaces the cost reduction commodity strategy currently in place.

Golden Minute Script

Media is a pretty big investment you don’t want to overpay.

That’s why advertisers want their media agency to guarantee lower cost per thousands.

But buying on cost suggests that media is a commodity.

When in fact media is anything but a commodity.

There is high quality inventory.

Then there is the media you buy at the lowest possible cost.

Imagine you buy media at $20 per impression.

And they guarantee a real person will see it.

Or you can buy media at just $2 an impression?

Yet half those ads will not seen by a real person while the other half may end up on a porn site or… So which one is the best value?

$20 an impression or $2 of worry?

Lets just say one is definitely a good price while the other is at least ten times the value.

Are you concerned about the value you are obtaining from your media investment? Find out about our comprehensive media assessment service here

About Darren Woolley

Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com

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