Buying media: a game of chance?
How do advertisers place a value on different media? A fundamental question, particularly in an age when accountability is essential, and every purchase decision subject to scrutiny. Scan the media landscape and you’ll find an entire industry devoted to measuring and comparing the audiences delivered – from ABC certificates through industry measures such as NRS, BARB, JICREG, RAJAR, POSTAR to collaborative studies such as MediaDNA and VIPer.
It’s received wisdom that the development of the “media currency” industry is an essential platform for advertising decision-making. As media fragmentation continues, as the range of advertisers widens, and the environment in which marketing messages grows ever more competitive, clients and agencies need these currencies more than ever. According to this school of thought, the media market is becoming increasingly commoditised – these currencies allow advertisers to measure and compare media, and to attach a quantifiable value to each – great for negotiating with media owners, and for explaining media choice up the “accountability chain”.
Or, alternatively, consider the following:
Ã¯ Only 15 per cent of media agency bosses expect the market to become “more commoditised”. 1
Ã¯ Almost half the top marketing directors of UK advertisers believe that media advertising is less accountable than other marketing channels such as PR, sales promotion or direct marketing. 2
Ã¯ Two-thirds of marketing directors and almost 90 per cent of agency bosses believe that “in future, media will need to provide more sophisticated evidence to get on schedules”. 2
What do they mean by “sophisticated evidence”? More audience measurement?
Asked to rank the most important measures, advertisers and agencies combined produced the following (percentage describing as “very important”): 2
2. Return on investment68%
So here we have two parallel accountability trends – increasing commoditisation of the media trading market, through the growth in the quantity and quality of audience measurement tools, but also a profound movement towards effectiveness as the true measure of media’s value.
A few paradoxes emerge:
Paradox 1: Measurability is inversely related to business complexity. Unilever or Ford might have vast resources available to track and analyse the effect of their advertising, but the scale and layering of their distribution and the range of marketing tools they use make accurate accountability of every penny an ambitious aspiration. Instead, complex businesses tend to build hierarchies of effectiveness measurement, encouraging the growth of the “proxy” measures of audience currency. If we can’t measure the extra sales or profit, let’s at least understand how many eyeballs we’re reaching, and feed in the rest of our knowledge about awareness dynamics, conversion rates etc.
At the other end of the spectrum, the Blackpool B&B or the local plumber will have very precise measures of media value. They will know, or will learn, the number of enquiries, the revenue and the profitability of the various marketing options at their disposal. They may not post-rationalise these measures into marketing jargon, but they understand the value of different media with a precision “more sophisticated” companies could only dream of.
Between these extremes lie the vast majority of media spend – companies with some knowledge of the effect of their advertising activity, but reaching in the fog for accuracy, and for the Holy Grail of optimisation.
Paradox 2: The technical and communications advances driving the media audience currencies will, over time, abolish them. The audience measurement surveys are a framework that holds together effectiveness measurement – if we know medium A produces a 10 per cent awareness shift, we can factor that by its audience size and profile. But gradually, as the more qualitative and business-oriented measures become both more measurable and higher priority, this framework becomes more of a cosmetic mask. As effectiveness measurement improves, driven by better research, and better analytical tools through which to understand its meaning, so the need for the trading currencies diminishes. Who needs to compare reach of female main shoppers when you can compare Baked Beans Sold?
Paradox 3: While movement towards effectiveness should encourage direct relationships between advertisers and media owners, it is a movement driven by agencies. Media agencies in particular are increasingly focused on offering a more “upstream” service to clients, and many have placed effectiveness measurement at the top of the agenda in achieving this.
Most major agency networks are developing sophisticated econometric modelling services aimed at disentangling the strands of advertiser activity and isolating the impact and effect of each component part. Such analytical tools are essential to fulfilling the current agency buzzword – media neutrality. On the whole, in my experience, media owners remain fairly disenfranchised from this whole process.
So how should media owners react to this changing landscape? Levels of activity have varied massively – many are unwilling to work with advertisers to measure and improve the results they generate – others, notably the Radio Advertising Bureau and, more recently, the Newspaper Society, have worked hard to build a reputation for effectiveness.
In Scotland, the Daily Record and Sunday Mail have started to re-orientate their relationships with advertisers towards greater levels of accountability, and a stronger focus on working with advertisers to improve the value they get from their newspapers. Effectiveness research is often equated with sizeable tracking studies, where awareness and other measures are gauged before, during and after campaigns. Such work is the bedrock of most effectiveness activity, and has contributed most of our knowledge as to how different media work, and what their strengths and weaknesses are as communication vehicles and marketing tools.
However, the pre- and post- tracking study has its limitations:
Ã¯ What if the advertiser is “always there” – a permanent, long-term, regular presence in the market?
Ã¯ What if the advertiser has specific, quantifiable business goals, and doesn’t require the “proxy” measures of awareness etc?
Ã¯ What if the advertiser is willing and able to share their own data, in terms of enquiries, sales etc, with the media owner?
Ã¯ What if you can’t fit the business model of different advertisers into the same methodological framework?
With a unique national/regional positioning, and a range of advertisers across the spectrum, the Record felt it had the critical mass and, more importantly, the depth of relationship to take a rather more bespoke approach. They have started approaching advertisers to create “top-down” effectiveness measurement methodologies. In other words – start with the client’s business objectives – identify the key factors in achieving those objectives – then investigate the best way of measuring and improving the contribution of the media.
Not for the faint-hearted, of course – it’s much easier to adopt a methodology, line up a research company and tout it around your customer base. Instead, you have to start from scratch pretty much every time. Why? Because advertisers do. Companies, whether Unilever or the Blackpool B&B, compete and succeed by differentiating themselves from others – so research methodologies based on comparing what they have in common is always going to be of limited value.
In practice, this has meant the Record building bespoke approaches in collaboration with advertisers. This has resulted in methodologies ranging from motor dealership “exit polls”, to in-store questionnaires for retailers, to phone call/conversion analysis for direct response, to applicant grading for recruitment.
The results I’ve seen to date are uniquely illuminating. They don’t speak of shifting awareness, but of shifting cars from forecourts. Less about filling media gaps, and more about filling vacancies. Take the recently published Arnold Clark study. Measuring awareness of Arnold Clark would be interesting – but only 10 per cent of the population are in the market for a car at any one time, and even among this group it’s difficult to engage with the decision-making process by measuring awareness or opinion of Arnold Clark. And how do you meaningfully measure awareness for an advertiser using a range of print, broadcast media and other marketing channels on an ongoing basis?
The Record team cut through all this noise by going direct to visitors to Arnold Clark’s showrooms, and working with the client to understand why car buyers are in the showroom – what sort of motivation they had for visiting – and media’s role within the process. This type of approach not only makes for efficient, wastage-free research, it gives the opportunity to add real value for the advertiser – asking precise questions not only about perceptions, but about real behaviour and its motivations. The focus is not the Record versus other newspapers, but trying to understand the value of newspaper advertising versus brand reputation, finance offers, location, other media, etc, and the relationship between these different factors.
A second breakthrough by the Record team is the realisation that effect isn’t just a noun; it’s a verb too. This shouldn’t just be about measuring what happened, but understanding and using that knowledge to improve the value delivered to advertiser.
Over time, the Record’s research has shifted towards understanding how different advertising variables – position, size, day-of-week, content and style – impact on the results advertisers see. Recent work with T J Hughes and Shades Blinds has addressed many of these issues – both by testing shoppers’ “take-out” from campaigns, and by analysing the correlations between different advertising variables and responses.
Will the old currencies go away? Well, it’s unlikely audience data is going to disappear overnight; advertisers, agencies and sales teams need comparison points and a basis for negotiation and trading. However, there is a major and probably irreversible shift underway. Marketing directors are under ever-increasing pressure to demonstrate the accountability of their budgets. Agencies are developing more flexible and useable modelling tools. Smart media owners are getting better at demonstrating and improving the effect they deliver. Over time, perhaps not such a short time, these three trends will increasingly coincide.
So look forward to a media future that is underpinned by “hygiene factor” trading currencies, but where “real” media decisions are based on complex but coherent measures of the effectiveness of different vehicles. Where the only currency is the advertiser’s bottom line.
Notes (available at www.oceanconsulting.co.uk):
1 Media Brands 2002
2 “Attitudes to Effectiveness” 2002