Benchmarking Value Improvement in Media Buys - Steve Grubbs - MediaBizBloggers

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For years marketers have challenged agencies to deliver new techniques for benchmarking value improvement in their media buys. Agencies have responded by creating an array of tools and systems including marketplace forecasting models, media planning/buying optimization programs, engagement metrics, media mix models, business intelligence data sets and many others. Some of these "tools" were simply the cause du jour, but most have helped agencies in evolving their media buying best practices.

However, the current value improvement benchmarking has not satisfied some marketers, and they no longer trust their agencies with this responsibility. There are a slew of reasons for this, but the lack of cost transparency with most media is at the heart of it. Some marketers have turned to media auditors and consultants for their input. Other marketers have handed this benchmarking responsibility to in-house procurement specialists.

Most recently, largely due to the procurement influencers, value improvement has been more narrowly defined as simply cost savings or cost reduction. Demonstrating and proving media cost savings for clients has become the top priority for most media agencies. Compensation agreements in some cases are tied to media cost reduction. Cost savings exercises are included in all media new business reviews, and in many cases, they have become the single most important (and controversial) element in those reviews.

But there is another part of this value improvementexercise that many marketers are overlooking, and that's the significant role THEY can play (beyond procurement) in helping their agencies improve their media buys. This role is becoming more important, and it will translate into a strategic, competitive advantage for some companies. So for starters, I recommend the following corporate job posting:

Wanted: In-house media expert to work for Fortune 1000 marketer. Reports directly to C-suite leadership. Minimum 10 years media management experience. Must have senior level media buying or selling experience, media planning and digital experience. Must be an effective communicator, who can represent the company to the media community.

In my experience, companies that employ in-house media experts (or savvy managers who study and learn the media business), who interact with the media sales community, are able to demonstrate significant media buy value improvement over time. I saw an undeniable correlation between those companies most involved in the media process and relationship building with media reps, and the efficiency and quality of their media buys vs. those companies that were less involved.

The best in-house corporate media experts can be as influential as their media buying agencies in driving value improvement. They understand the nuances, the maneuvering and posturing in the business. They understand there are dozens of ways to interpret CPM and audience numbers to your advantage or disadvantage. They understand it is simple human nature that the media sales community will offer extra consideration to those marketers who meet with them and encourage honest dialogue about mutual interests and solutions. And yes, extra consideration translates to cost savings.

Corporate in-house media experts will also help streamline the workflow of their media buying agency. Because each company has different business objectives, an in-house media director can provide clear direction to their agency on what media value improvement means for their company and how to connect it to those business objectives. The best in-house media experts will filter out the unnecessary projects and re-direct agency manpower to where it can be most effective. And without a doubt, agency media teams work much harder and deliver superior results for those clients who embrace, respect and appreciate their efforts.

Another increasingly important role for in-house media directors will be educating their companies on digital media and filtering the deluge of digital media offerings coming their way. There is growing frustration among digital media vendors and some traditional media vendors with agencies who do not respond to them in a timely manner. They believe agencies are understaffed and can't manage media offerings that don't have a box in a media plan. More and more frequently, vendors will reach out directly to clients. This will be a burden for some companies. For others, with the internal resources to analyze and act on these opportunities, it will be a strategic, competitive advantage.

A final thought… there is still much numbers mumbo-jumbo in our business, and clients need someone to decipher it. As I mentioned earlier, the same set of media stats and costs can be interpreted very differently. I am stunned when I hear claimed "cost reductions" of 20% and more by some media agencies, media auditors or procurement specialists. Really? If the media sellers actually delivered those reductions, they'd all be out of business. Such cost reductions can be only be achieved by including more low demand, low value elements in the media package or offering significant additional incentives to the seller. Is this really creating value improvement?

The media agencies, auditors and procurement specialists each have very specific mandates. Each needs to demonstrate value improvement (however they define it) from their services. Each group needs to provide numbers support to do so. For my money, the best arbiter of these numbers, the person best qualified to represent a company's interests, is a highly qualified in-house media director.

Steve Grubbs is President and founder of Second Act Media consultancy. Second Act Media is an advisor to companies working in the media, marketing, entertainment and sports industries. Steve can be reached at steve.grubbs@secondactmedia.com.

Read all Steve’s MediaBizBloggers commentaries at My Second Act - MediaBizBloggers.

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