Media Agency Media Agency & AoR Business& AoR Business

By Prof. Indrani SenBy Prof. Indrani Sen

History of AORHistory of AOR

Until late 90s : Mostly full service agenciesUntil late 90s : Mostly full service agencies Mid 90s : Appointment of HTA by HLL & Mid 90s : Appointment of HTA by HLL &

creation of Fulcrum, exclusive buying unit creation of Fulcrum, exclusive buying unit for HLL by HTAfor HLL by HTA

Late 90s : Emergence of AORs as buying Late 90s : Emergence of AORs as buying agencies, planning retained with creative agencies, planning retained with creative agenciesagencies

Post y2k : Emergence of Media Agencies Post y2k : Emergence of Media Agencies as Planning + Buying AOR, appointment of as Planning + Buying AOR, appointment of AoR across the countryAoR across the country

Strategic Media Planning Implementation Planning g

Strategic Media Planning (SMP)Strategic Media Planning (SMP)

Implementation Planning: Implementation Planning: Market PrioritizationMarket Prioritization

Sales targetsSales targets Category and Brand GrowthCategory and Brand Growth Market Share: CDI & BDIMarket Share: CDI & BDI SOV vs. SOMSOV vs. SOM Brand TaskBrand Task

Implementation Planning:Implementation Planning:Media Mix SelectionMedia Mix Selection

Campaign objectivesCampaign objectives Product linkageProduct linkage Quality of media consumptionQuality of media consumption Inter Media efficienciesInter Media efficiencies Media multiplier studiesMedia multiplier studies BudgetBudget

Implementation Planning:Implementation Planning:Frequency ReckonersFrequency Reckoners

Marketing FactorsMarketing Factors– Product Life Cycle /Loyalty/Purchase Product Life Cycle /Loyalty/Purchase

Cycle/Competitive ResponseCycle/Competitive Response– Involvement/Brand ShareInvolvement/Brand Share

Creative FactorsCreative Factors– exposure/length/Complexityexposure/length/Complexity

Media FactorsMedia Factors– Category Clutter / Recent advertising / Category Clutter / Recent advertising /

Environment / ContinuityEnvironment / Continuity

SMP: Consumer InsightsSMP: Consumer Insights

LifestylesLifestyles AttitudesAttitudes User behaviorUser behavior Purchase behaviorPurchase behavior Media consumption intensityMedia consumption intensity Affinity groupsAffinity groups Brand AwarenessBrand Awareness Brand AttractivenessBrand Attractiveness

SMP: Objective SettingSMP: Objective Setting

Campaign tasks Brand HealthCampaign tasks Brand Health Tracking DataTracking Data

– Recall trackingRecall tracking– Communication relevance trackingCommunication relevance tracking– Awareness to Adoption StudiesAwareness to Adoption Studies– Future Purchase Intention trackingFuture Purchase Intention tracking– Usership Commitment ScoresUsership Commitment Scores– Cannibalization studiesCannibalization studies– Conversions modelConversions model

SMP: Effective Frequency SettingSMP: Effective Frequency Setting

How many?How many? Based on empherical research Based on empherical research

– Robert Grass : 3 to 8 exposuresRobert Grass : 3 to 8 exposures– Krugman : 3+ exposuresKrugman : 3+ exposures– Michael Naples : Proved KrugmanMichael Naples : Proved Krugman– Ehrenberg/Jones : 1 exposureEhrenberg/Jones : 1 exposure– Jones : Diminishing ReturnsJones : Diminishing Returns– Erwin Ephron : Recency PlanningErwin Ephron : Recency Planning

History of Reckoners in IndiaHistory of Reckoners in India

Pre AOR era : Krugman / RecencyPre AOR era : Krugman / Recency Post AOR era Post AOR era

– Unilever frequency reckonerUnilever frequency reckoner– Proprietary tools & processesProprietary tools & processes– BenchmarkingBenchmarking

SMP: Awareness ModelingSMP: Awareness Modeling

Useful for weight setting & Useful for weight setting & SchedulingScheduling– STAS models - JonesSTAS models - Jones– Adstock - S.BroadbentAdstock - S.Broadbent– IRI Experiments - AdWorks OneIRI Experiments - AdWorks One– Adstock Budgets - EphronAdstock Budgets - Ephron

Mike Von Gonten X-10 experiments

Adstock effectAdstock effect

Proprietary Tools:Proprietary Tools:Some ExamplesSome Examples

TOOLS : CHOOSER, MAP, RADAR, IMnovations

CONSUMER INSIGHTS: IT ALL BEGINS HEREWe discover the secrets that drive consumer behavior.

We move far beyond the questions about what people want and start looking at what they care about.

How they spend their time and money. And ultimately, how they define themselves.

These are the Passion Groups.

CONTACT INNOVATION: CREATING UNIQUE MEDIA PROPERTIESIf we know who they are, what they want, and what they do, then we can unearth new ways to interact with them.

If there isn't a media solution to our clients' problems, we create a solution.

We develop unique media properties and will pursue the opportunity to create any environment. We are not afraid to be pioneers and explorers.

MINDSHARE ATG TOOLKIT

AdSalesTM - Econometric Modeling

AdMindTM - Modeling Consumer Opinions

AdInvestTM - Budget Allocation

AdMixTM - Mixed Media Planning

AdResponseTM - Response Curve Generator

AdPhaseTM - Media Phasing

Brand Asset Valuator• Toolbox

– Libra: channel share optimizer– FRED: frequency distribution model– Playground: TV analysis system– Planning and awareness programs– Media over-spill optimizers– TV budget allocation model– Syndicated software

7 I’s Media Process7 I’s Media Process Media In MindMedia In Mind BrandScapeBrandScape TeleweighterTeleweighter ProphecyProphecy CognitoCognito Total Impact PlannerTotal Impact Planner

MadisonMadison

Madison McubeMadison Mcube Madison MPP(Ratings for new shows)Madison MPP(Ratings for new shows) Madison Town & CountryMadison Town & Country Madison Adwise/ AnalyserMadison Adwise/ Analyser

Efficiency + Effectiveness Efficiency + Effectiveness

Efficiency : Efficiency : – PlansPlans– BuysBuys– NegotiationsNegotiations– Extensions beyond Extensions beyond

mass mediamass media

Effectiveness : Effectiveness : – SMPSMP– SystemsSystems– ToolsTools– ActivationsActivations– InnovationsInnovations

Strategic Nature of Media BuysStrategic Nature of Media Buys

Savings are central to the concept of Savings are central to the concept of AoRsAoRs

Value ads make healthy brands & Value ads make healthy brands & satisfied clientssatisfied clients

Innovations win customers & reviewsInnovations win customers & reviews Activations build on the customer Activations build on the customer

relationshipsrelationships

Some TV buysSome TV buys

20000 secs on evening prime time band, 9000 20000 secs on evening prime time band, 9000 secs on afternoon time band, 10000 secs on ROSsecs on afternoon time band, 10000 secs on ROS

IPL contract for 50 croresIPL contract for 50 crores Sponsorship of new serial on a GECSponsorship of new serial on a GEC Co-sponsorship of prime time news on all Hindi Co-sponsorship of prime time news on all Hindi

news channelsnews channels Advertiser sponsored program on all Regional Advertiser sponsored program on all Regional

channels in South channels in South

Imagine buying all this in one month.Imagine buying all this in one month.

Some Print buysSome Print buys

3,000 cc colour, 5,000 cc B/W3,000 cc colour, 5,000 cc B/W 4 pg pullouts in leading dailies4 pg pullouts in leading dailies Page SponsorshipsPage Sponsorships Event Promotions with publicationsEvent Promotions with publications Back Page contracts on lead magazinesBack Page contracts on lead magazines AdvertorialsAdvertorials

Imagine buying all this in one month.Imagine buying all this in one month.

Scale IS everythingScale IS everything

Scale has changed life at the AORScale has changed life at the AOR– Resource requirementResource requirement– The buy structureThe buy structure– The negotiation processThe negotiation process– The time & effortThe time & effort– The value adsThe value ads– The feedback / evaluation systemsThe feedback / evaluation systems– The Implementation systemsThe Implementation systems

Type of buysType of buys PlannedPlanned

– AnnualAnnual– QuarterlyQuarterly– Campaign basedCampaign based– SlabsSlabs

Non-plannedNon-planned– OvernightOvernight– DistressDistress– InnovationsInnovations

Planned buyingPlanned buying ParametersParameters

– Recent business worthRecent business worth– Forecasted spendForecasted spend– Buy structureBuy structure– Seasonality of spendSeasonality of spend– Ad size & typeAd size & type– Rate history with clientRate history with client– Agency business recordAgency business record– Client / Agency credit recordClient / Agency credit record– Seller buyer relationshipsSeller buyer relationships– NegotiationsNegotiations

Non-planned buyingNon-planned buying

ParametersParameters– Rate history / volume of business with Rate history / volume of business with

client / agencyclient / agency– Impact of innovationImpact of innovation– NegotiationsNegotiations

#1 in circulation, #1 in readership, #1 in circulation, #1 in readership, BUT NOT IN PLANBUT NOT IN PLAN

Other factors Other factors Product linkageProduct linkage micro market analysis (SCR)micro market analysis (SCR) Inter media cost efficienciesInter media cost efficiencies Proprietary media consumption toolsProprietary media consumption tools Client prioritiesClient priorities Agency prioritiesAgency priorities

Typical Brief to AoR Typical Brief to AoR

Minimize non planned buysMinimize non planned buys Demonstrate Innovative buying Demonstrate Innovative buying

structurestructure Campaign tasks are top priorityCampaign tasks are top priority Savings come next, but must Savings come next, but must

deliver target savingsdeliver target savings

Evaporating BudgetsEvaporating Budgets

Budget cut / fresh prioritiesBudget cut / fresh priorities– Re-re-negotiated dealsRe-re-negotiated deals– Internal readjustmentInternal readjustment– Seller is still hopefulSeller is still hopeful– Buyer-not so sure…March is 4 months Buyer-not so sure…March is 4 months

away away – Savings are still holySavings are still holy

AOR buying frameworkAOR buying framework

AoR business commitmentAoR business commitment

• Overall business worth• Media Inflation on lead category media/vehicles• Medium-wise split* Past inventory consumption* Knowledge of Past publication rates* Current rates of existing non-AOR clients* Competitive rates across markets

AOR buying frameworkAOR buying framework

AoR business commitmentAoR business commitment

Essential pre-requisites• Marketing Plan• Annual / Quarterly plans• Media Mix• Media Objectives• Vehicle Selection• Volume requirement

AOR buying frameworkAOR buying framework

AOR business commitmentAOR business commitment

…and when AOR deals are very demanding

• The AOR has a way with media sellers• There is always a distress sale• Plethora of media options• Better planning

AOR buying frameworkAOR buying framework

AOR business commitmentAOR business commitment

And in the event of a stalemate

* Direct deals follow* Client enters deal making, with agency closely informed* Seller still comes back to AOR buyer post the deal for deal consumption

God is in the detailsGod is in the details

SchedulingScheduling– Monthly/Weekly/DailyMonthly/Weekly/Daily– Based on Based on

Plan requirementPlan requirement Deal StructureDeal Structure Previous post buy analysisPrevious post buy analysis Budget approvedBudget approved Un-consumed InventoryUn-consumed Inventory Expensive / Low cost inventory consumptionExpensive / Low cost inventory consumption

Planning ImplementationPlanning

Buying &Negotiations

Large DealsLarge Deals

Not necessarily the best ratesNot necessarily the best rates

Small DealsSmall Deals

Not necessarily the worst either...Not necessarily the worst either...

Big campaignsBig campaignsMammoth tasksMammoth tasks

Big budgets Big budgets Big troubleBig trouble

Buyer tasks becomes Buyer tasks becomes

COMPLEX MAGIC.COMPLEX MAGIC.

Finally, March 31stFinally, March 31st

Short on commitmentShort on commitment Exhausted budgetExhausted budget Delayed billingDelayed billing Minimal campaignsMinimal campaigns Next year planning startsNext year planning starts Reconciliation, shortfallsReconciliation, shortfalls New budgets, New hope, New New budgets, New hope, New

commitmentscommitments

Pitfalls: Conflicts Pitfalls: Conflicts

National consolidation across media: National consolidation across media: • Regional vs. Central Sales Teams of MediaRegional vs. Central Sales Teams of Media

TREND #2

Pitfalls: Increased AccountabilityPitfalls: Increased Accountability

So, what did India Got Talents achieve last So, what did India Got Talents achieve last weekend?weekend?

TREND #3

Pitfalls: Declining TrustPitfalls: Declining Trust

• Past failures of AoR in deliveryPast failures of AoR in delivery• Direct deals by clientsDirect deals by clients• Research pitfalls, effectiveness of Research pitfalls, effectiveness of tools questioned tools questioned

TREND #4

Profitability vs. People Investment Profitability vs. People Investment

• Excellent toolsExcellent tools

• Stressed workplaceStressed workplace•Quality of work ? Quality of work ?

TREND #5

Current trendsCurrent trends

Rate increase and clutter are driving Rate increase and clutter are driving investments higherinvestments higher

Seller becoming intrinsic part of decision Seller becoming intrinsic part of decision makingmaking

Agency value addition is criticalAgency value addition is critical Deliver first, prove it & then claimDeliver first, prove it & then claim Commissions are under pressureCommissions are under pressure Media Agencies are setting up more and Media Agencies are setting up more and

more specialized cells / subciddiaries more specialized cells / subciddiaries working on fee basisworking on fee basis

The business is still good The business is still good and there is no threat in and there is no threat in immediate future…. immediate future….