A few weeks ago I wrote about promiscuity in advertising and how, advertising companies always tend to keep two or more vendors in competition at any given level of the supply chain.
Michael Griffiths replied that this is actually a common supply chain management practice and that it’s particularly prominent in commoditized industries.
That got me thinking. Media planning and buying really shouldn’t be a commodity, but agencies often behave like their services are commoditized. Why is that?
Since the late 1980’s media agencies have competed against each other on price – occasionally even offering media planning services for free as long as they got to take a small margin on the media buying business. Think about that for a sec; it makes no sense. Media planning should be the value added service. Choosing where ads appear and to whom is hugely valuable to advertisers. Reaching the right consumers at the right time could mean the difference between a very high ROI and completely wasting your advertising budget. However, some agencies give away planning for free just to take a transaction fee on media buying, which is really much closer to being a commoditized service.
What’s going on here?
Why has the art of media planning become nearly worthless in the market?
I have two working theories here:
#1) In Digital Media Media Planners no longer truly plan media
Back when the only media options were Television, Radio, Magazines, Newspaper and Out of Home, the Media Planner played a little bit of a different role. They were the people who researched audiences, calculated reach and frequency and created GRP schedules. They were hands-on selecting the exact ad placements that their audiences would see. They literally architected the consumer branding experience.
In digital media, things work a little bit differently. Rather than serving the role of an experience architect, digital media planners outsource the function of exact ad placement and audience targeting to ATDs, Networks and Publishers. Media planners don’t yet have the correct tools to manage digital media at the level of granularity that they used to manage traditional media, so they are relegated to more administrative type jobs like tracking budgets, creating flowcharts, managing RFPs and tracking billing.
#2) Poor digital media attribution obfuscates the value of media planning
Another reason why media planning could be seen as a commoditized service is due to the lack of accurate advertising success metrics. The digital ad industry still lacks precise attribution and a true understanding, on a granular level, of the effectiveness of digital ads. If clients could measure precisely how valuable each ad buy was, then media planning would surely be a much more differentiated service and there would be much more focus on getting every bit of value out of each media dollar.
What do you think? Do you think media planning a commodity?