The Role of Research in Media Planning and Buying

This upcoming Friday (3/5) I’ve been invited to speak to a Marketing Research class at Skidmore College. The purpose of my presentation will be to show the students all the different ways research is used in Media Planning and Buying and the associated problems/challenges with that research. Below I’ve drafted an outline of the presentation and for this blog entry I’d like to ask for feedback (questions, comments, additions, subtractions) to help make this the best presentation possible.

Marketing Research: Presentation at Skidmore College Friday 3/5/2010

• 1. The advertising equation (follow the money)
  • The main purpose of all advertising is to make incremental money for the Advertiser (ROI).
  • Typically the Advertiser gives a sum of money to the Agency, the Agency takes a fee and buys media from Publishers, and the Publishers help the advertising reach Consumers.
    • The goal is to get the Consumers (reached by the advertising message) to give more money back to the Advertiser, than was spent by the Advertiser to reach them with the message (the goal is positive ROI).
• 2. John Wanamaker (quoted): “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”
  • The purpose of all Media research is to make sure advertising dollars are not wasted. In order to avoid wasting advertising dollars, research helps us select media vehicles that reach the highest portion of our target audience and no one else (it costs money to reach each person – money spent to reach people outside your target is wasted).
• 3. The three stages of Media Research and their associated problems/challenges
  • 1) Pre-Campaign Research
    • This is the research done by agencies to make sure they buy the media that best reaches their audience with no waste (reaching people outside their audience).
    • This research relies on two sources 1) National consumer surveys (Simmons, MRI) and 2) Ratings agencies who calculate audience for TV shows, magazines, websites etc… (Nielsen, comScore).
      • Problem 1: The Simmons national survey is a 185 page workbook with over 1000 questions – would you fill it out? (response bias may be a factor)
      • Problem 2: Nielsen bases TV ratings off of “C3 ratings” (commercial ratings, plus three days of DVR playback) – is this really an accurate way to measure audience (everyone knows people watching shows on DVR don’t watch the commercials)? Also – there are only “people meters” in the top 56 US markets – all other markets are measured by paper journals – which introduces more bias into the measurement equation.
  • 2) During Campaign Research
    • This is the research done by advertisers and agencies in order to make minor course corrections (optimizations) to maximize media impact.
      • Problem: For branding campaigns optimizations are based on KPIs (Key Performance Indicators) which are frequently a leap of faith away from true ROI (e.g. shifting spend toward Banner Ads with the highest CTR (Click Through Rate) may not actually be helping your campaign – it could just be moving money toward people who tend to click on ads – research suggests that only 8% of the entire online population generate 80% of total ad clicks).
  • 3) Post Campaign Research
    • This is the research done by either 1) Test/Control survey methodology to see if people remember seeing your ad or 2) Examining campaign metrics to make an inference about what was successful from an ROI perspective.
      • Problem 1: Post campaign surveys are often rushed and based on small sample sizes – also results usually trend toward positive as all parties involved benefit from positive results (including the survey company who will likely be rehired to measure the next campaign).
      • Problem 2: No matter how you manipulate campaign metrics (KPIs) they’re still a leap of faith from actual ROI.
• 4. Class Discussion Topic: How do you know your advertising is working for you? (is it possible?)

Thank you for reading through this outline – any and all comments and suggestions are welcome!