Download What criteria are marketers using to allocate their budgets across the

 What criteria are marketers using to allocate their budgets across the increasingly complicated media mix? The key criterion in determining media values is a combination of three principles: (1) finding vehicles that reach a large number of targets with (2) a high enough composition to avoid waste and (3) at a low cost per thousand. With the assumption that target markets can be identified precisely, it follows that media vehicles should be selected to reach the largest number of targets efficiently with minimum waste. However, regardless of the media chosen, a fixed budget limits the potential reach (Sissors and Baron, 2002). The rise of the media multi‐tasker is influencing the allocation of advertising budgets and this is reflected through marketing budgets increasing incorporation of both traditional and digital media to maximise consumer reach (Naik and Peters, 2009). However, the overall key factor for considering media has long been cost, which is quantitative media planning, where the selection of media in a campaign is based on the minimisation of the costs of media to reach the target group with the required message frequency (Dijkstra, 2005). In situations where budgets are cut, it is crucial to avoid excess share of voice relative to share of market. TV is often deemed the most expensive medium as well as ‘yesterday’s medium ‘and is often the first to be cut, however, this is deceptive. TV works harder during a recession and sustains the emotional implications of the brand, particularly ‘fame’ or ‘buzz’ which is found to be the most effective consequence during a recession (Binet and Field, 2009). Despite TV often being cut first, it still holds the largest share of traditional businesses media budgets. According to TNS Media Intelligence, in 2008, Burger King spend $294 million in measured media and had plans to increase spending by double digits during the fiscal year in 2009. Interviewed by AdAge, Burger King CMO Russ Klein emphasized the broad reach of TV when he said “there is no way to replace television. So that’s going to get the largest single increase on the calendar”. Targeted TV is the next development currently being tested and should protect TV budgets and attract money back to TV from direct mail and internet, however, it will add to the complexity of TV planning (Walley, 2009). Abstracts from Related Articles Willshire, A (2010), “Automated planning optimises TV spend” Admap, June 2010, pp. 42‐43. Media agencies have to examine their cost structures to identify savings, but they know they must invest in the skills and resources that give them a competitive edge. There is scope for streamlining planning processes by increasing automation, and by changing the focus of how agencies operate. As long as the client has high quality sales data, this can contribute to automating the media planning process, freeing up planners to focus on interpreting human behaviour, building relationships between people and brands and creating exciting content. These activities would result in genuine added value through strengthening the client‐agency relationship. Naik, P. A. and K. Peters (2009). "A Hierarchical Marketing Communications Model of Online and Offline Media Synergies." Journal of Interactive Marketing 23(4): 288‐299. Synergy, which occurs when the combined effect of two media exceeds their individual effects on the outcome measure, is the focal interest of recent studies on marketing resource allocation. The authors address the important issue of the sources of growth in online media spending. Although online spending can grow by implementing a competitive approach to secure resources at the expense of the offline media, the authors identify alternate sources of growth: within‐and‐cross‐
media synergies. The findings of this study show how within‐and‐cross‐media synergies increase a brands total media budget. Ford is given as an example, initial budget allocation for their F‐150 brand gave 90% to television ads to generate awareness and consideration goals, however, reallocation of this TV budget to include magazines and online media saw an increase of 20% in exposures. Hence, by forgoing competitive orientation, online spending can grow solely due to the collaborative orientation which involves building synergies with various offline media. Walley,N (2009), “TV revolution needs to have sound ad planning at its heart”. Admap, February 2009, Issue 502, pp. 14‐17. The article discusses the technological changes in television and their implications for media and advertising planning. Multi‐channel TV has complicated TV planning whilst bringing the possibility of niche audiences and targeting, but has not changed the basic model of TV delivery: controlled, linear, with interruptive ads. This multi‐
channel era is now changing into a new functionality‐led era, as viewers gain control of what and when they watch and become active consumers. The author predicts that many smaller channels will disappear in favour of fewer, bigger, more functional channels delivering high‐profile content. This development is still in its infancy, and everybody is still struggling to understand how to measure, value and price these new TV delivery methods which are giving consumers control. The 30‐second ad is still the main format for on‐demand TV; however, there are reasons to believe (discussed) that the impact of a 30‐second ad is not the same before an on‐demand show as during live TV, and nobody knows when it is appropriate to use one form or another; different modes of advertising may well be needed for on‐demand. One development is the advertising `showcase’ (long‐form branded content and advertising funded programming), as pioneered by TiVo in US; some examples are described (Coca Cola, Charles Schwab, Virgin). Ad content designed for broadcast TV probably won’t work in these formats. Targeted TV is the next development, now being tested: it should protect TV budgets and attract money back to TV from direct mail and the web, but it will add to the complexity of TV planning. The next few years will be difficult for TV planners, who must continue to champion the significance of advertising for successful TV while experimenting with the new formats, in a world where innovation is driven by technologists who care nothing about brands. ADBarometer Marketer’s Internet (2009) Bi‐Annual EIAA Marketers’ Internet Ad Barometer European Results, European Interactive Advertising Association. The rise of the media multi‐tasker is influencing allocation of advertising budgets. Brands are recognising that consumers utilise multiple channels of media and this is reflected through marketing budgets increasing incorporation of both traditional and digital media. This finding is supported by EIAA’s recent EIAA Media Multi‐tasking Report which found that 22% of all Europeans now simultaneously use TV and internet. Binet, L and Field, P(2009), “Stress on accountability can be dangerous in a recession”, Admap, June 2009, Issue 506, pp. 16‐19. In their analysis of IPA case histories published in 2007 (Marketing in the Era of Accountability), the authors found that metrics commonly used to drive accountability were flawed and led to inefficiency. They now re‐examine this evidence in the light of recession, and find that some of the measures taken by companies are doing harm to brands. Clear, and multiple, business objectives are even more important in recession. As in earlier downturns, two common but harmful practices are 1) short‐term promotional practices to increase short‐term sales, 2) shifting budget to a `customer loyalty’ campaign. 1): price‐cutting increases price sensitivity, and so reduces the capacity to generate incremental profit; there are better approaches to improving short‐term sales, e.g. new product or usage development. 2): defensive strategies aimed at customer retention rather than penetration growth are based on false premises (discussed). If budgets are cut, the key metric should be to avoid excess share of voice relative to share of market (SOV‐
SOM). TV, seen as the most expensive medium as well as `yesterday’s medium’, tends to be cut first: this is fallacious. TV works harder during downturns and supports the emotional connotations of the brand, especially `fame’ or buzz, which is found to be the most potent effect in a downturn. The supposed `waste’ of a fame campaign benefits the brand, especially in a downturn, by helping top support value and resist price‐cutting pressures; the need to be seen to cut `waste’ leads to a number of value‐destroying behaviour. Harrison, F. (2008) “Mash‐up marketing: a winning media formula”, Admap, September 2008, Issue 497, pp. 24‐26. Consumer‐centred, holistic media planning is essential in today's market conditions. The growth of digital and other channels has led to erosion of the influence of mass‐
media advertising, which now accounts for only 20% of total brand experience. Evidence from Zenith Optimedia's ROI Tracker shows that the more personal, interactive and experiential a touchpoint is, the greater its influence on a buying decision. Other key learning’s include: experiential contacts (such as sampling) are largely under‐used, and represent the best opportunity for higher investment; brand managers should allocate effort to touchpoints in line with their relative contribution to consumer experience; 'advice' and 'recommendation' touch points often have the greatest influence on buying decisions; and a 'winning formula' mix often combines both experiential and interactive marketing.