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.
There was a time when media was a relatively limited resource and even then there was great inventory and crappy inventory. After all there were only so many minutes in an hour and so many pages and so many sites.
But today’s digital supply chain provides virtually unlimited inventory but predictably most of this is at the crappy end of the value equation. Beyond the media publishers and broadcasters, there is now the digital duopoly (heading to a oligopoly) who create unlimited sources of media inventory opportunities at a fraction of the cost.
The fact is that anyone can buy cheap media, the skill is in identifying the media that represents the best value.
I think the most obvious expression of this is the conversation I had a couple of years ago with a regional CMO of a packaged goods company who after telling me we have saved them millions of dollars being more efficient, wondered if we could also help them to be more effective.
Of course we could and in fact much of the efficiency gains were focused on improving results while maintaining or reducing the investment. But what he asked me next surprised me.
“How much of my media budget should I put into digital?”
I asked him why he was interested and what he was trying to achieve. He was concerned that they had been steadily increasing their digital media spend largely because it provided a lower cost per impression or in his words cost per thousand (CPM) compared to the media they had traditionally used being television, out of home and women’s magazines.
I pointed out to him that comparing media based on cost per thousand was flawed. At this point a procurement colleague rather cynically chimed in that media is one of the oldest commodities and that it was a company policy to buy media on cost. But what was the measure of quality of that media?
At that stage the trade media was full of stories regarding the lack of transparency in digital viewability and metrics. There were also estimates that perhaps up to half the digital ads served were not seen by a human being. Since then Facebook has reported they have deleted more than one billion fake accounts from the platform. Plus there were discussions that as little as 10% of the cost of the media actually made it to the media provider due to all of the ‘hidden’ fees in the complex digital media chain.
But what was their measure of media success? How were they justifying the increasing investment in digital? Ironically the media strategy was simply raising awareness and driving brand desirability. So how did this justify the significant increase in digital media investment?
The bottomline was cost.
The media agency was incentivised on reducing the cost per thousand (CPM) and were doing this by targeting the very broad audience of ‘women with children’ at the lowest cost. This leads straight to that vast pool of low cost and low quality digital inventory. The inventory that is perhaps never seen by a real human, or appears on dubious websites and environments, or ends up funding crime. Basically the crappy, murky cesspool of the digital media supply chain.
But what is the alternative?
Having explained all of this, how was that CMO going to explain to the CFO or the CEO that they had progressively increased their spend in digital to buy more media at a lower cost. It could appear they were negligent?
Golden Minute Script
There was a time when media was a limited resource
Only so many minutes of TV or radio ads per hour
Only so many pages in the magazine or newspaper
And there are significant costs associated with creating those media opportunities
And they offered high quality and low quality media inventory.
The high quality came at high cost and low quality came at lower cost.
Along comes digital media, with a seemingly unlimited supply of inventory.
Especially low cost crappy inventory.
So what does that mean?
Today if you want to pay the lowest possible media cost then there is now a tsunami of crap available for you to buy.
The skill is knowing what to buy to get the result.
But that next to impossible if price is your only metric of success.
Are you concerned about the value you are obtaining from your media investment? Find out about our comprehensive media assessment service here