Add to that the intangible purchase, the volatile pricing, the sure suspicion that someone else bought it cheaper and you have an edgy situation. This is not the careful way big business does most business, and that makes big business nervous.
Enter the auditor. The trend to media buying consolidation has also fed the independent media auditing business. Multi-agency competition no longer provides points of comparison.
A media audit sounds like just the ticket to tighten up the spending. It's professional and definitive: Count the dollars, check the schedules, add the ratings, compare results to industry averages and grade the agency of record pass or fail. Except audits miss the mark.
Sure it is important to check the spots, the invoices and the ratings; but the big question remains unanswered. How does the advertiser's cost compare to what other advertisers are paying? Here audits fail and auditor pretense parades as expert knowledge.
BEATING THE BENCHMARKS
The usual approach is to compare the advertiser's cost-per-thousand to industry averages. Auditors use Nielsen, CMR or Netcosts, and if the advertiser doesn't beat these benchmarks handily, they conclude they are paying too much.
But CPM comparisons are not close to definitive. They can't fairly comment on price-value, or how well the agency of record has performed, because what an advertiser pays also depends on mix strategy, timing, last year's deal, specific shows requested, content restrictions, quarterly activity, cancellations, and so on-the specifics that make each deal unique.
But "it depends" isn't an answer, either. Some advertisers pay less and some agencies buy better. If we can't tell the good from the bad by comparing CPMs, how can we do it?
The management tool is monitoring, not auditing. Agency-of-record performance can be evaluated if, instead of thinking of buying as a singular event, we think of it as a continuing process and monitor it. The principle is to establish a series of checkpoints that will flag problems as they occur, in time to take action.
It is similar to process-control sampling in manufacturing, and in some ways it's better. The act of monitoring prompts the agency to solve problems early and that's what produces above-average performance-at least until all advertisers start doing it that way.
SINGLE PLANNING/BUYING SHOP
The concept of monitoring the media process pushes the advertiser toward a single planning and buying agency, or giving buyers the training and authority to execute brand plans cost-effectively in the marketplace.
To understand why integrated monitoring works when auditing doesn't, think about where the advertiser's leverage is today. There's great leverage in planning flexibility. Today's TV markets are characterized by increasing costs, but also great variation in rate of increase and price points (consider the differences in CPM and rate of increase for network news, cable and daytime). How much you get (CPM and reach) is more a reflection of what you buy than how well you buy it.
So buyers need to constantly inform planners about the market. (I am ignoring the question of relative daypart value-i.e., is a prime exposure worth more than a news exposure-because there's not a lot of hard quantitative evidence on this yet.)
There's also great leverage in stewardship. In many dayparts, such as broadcast prime or day, where there's strong demand and shrinking inventories, more value is lost through sloppy stewardship than gained by tough negotiation.
POSTING MUST BE PROMPT
Most stewardship reporting is late, pro forma and largely irrelevant. To improve value, posting has to be prompt-completed within a few weeks of the close of the quarter-and come in at, or below, the guarantee for each quarter. Since buys are guaranteed, the "as purchased" CPM goals will be met by contract. The only posting issues are the "quality" of the additional units and their scheduling, which is why weekly weight-monitoring is also essential.
In current posting, too little attention is given to the timeliness of targeted rating point (TRP) delivery. An 80 TRP-a-week schedule has far less value delivered as 40 TRPs week one, 50 TRPs week two, 150 points week three. In fact, dynamic posting, the continuous prompt comparison of weekly weight as run to weekly weight as ordered, is one of the best benchmarks for improving agency performance.
It flags underdelivery early enough for the agency of record to take action. This is urgent in broadcast network, where chronic ratings underdelivery is "made good," not according to plan but at the seller's convenience. The big issue is when these spots will run. The situation is also acute in syndication with "cash back" deals for underdelivery. These dollars need to be re-spent immediately to maintain plan weight.
OTHER USEFUL MEASURES
Some other useful quantitative benchmarks are: daypart mix vs. prior year, CPM guarantee increases vs. the average, planning costs vs. negotiated guarantees and weekly weight delivered vs. plan. No set of numbers tells the whole story or accomplishes the real goal.
To get the best planning and buying from the agency of record, an advertiser needs to continuously monitor the process to make sure it's under control. Today the essential performance attribute is not clout, it's vigilance.
National TV buying is Dodge City media. How else do you get a $6 billion prime time upfront marketplace, over the phone, in three weeks? But if advertisers want to be more confident of the outcome, they need to help shape the show-down-not just wait to count the bodies.