Commentary by Scott Donaton

'JUST IN TIME' AD BUYING DISRUPTS MEDIA BUSINESS

But Last-Minute Ad Planning by Marketers May Be The New Reality

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If you ask a media seller, the most disruptive and worrisome practice to emerge over the last two years is something
Scott Donaton, editor of 'Advertising Age.'

I call "just in time" buying -- the tendency of advertisers to release plans and dollars at the last minute.

This is not some theoretical debate over whether, say, marketers are better served when strategic media planning is handled by their creative agency or by their buying unit. It's a day-to-day reality that's made it impossible for media sellers to forecast or manage investments, and is a factor in magazines' lagging recovery, particularly monthlies with their long lead times.

A new reality
Most troublesome to sellers, and to agencies, which are similarly impacted when clients withhold budgets for as long as possible, is the suspicion this is no mere short-term reaction to a down economy. Some major marketers have indicated it's the new reality, and that agencies and sellers need to adapt.

"I don't see it going away," Greg Ross, director of North America media and marketing for Procter & Gamble Co., said when I questioned him on the practice during a panel at the Four A's Media Conference in New Orleans earlier this month. "To think that we're going to make a plan a year in advance and stick to it is unrealistic."

MediaCom Co-CEO Jon Mandel is of a different school of thought. He believes sellers became a lot more flexible when ad revenue turned down, giving marketers the ability to hold off on commitments. As inventory tightens, he said, marketers will be forced to re-adjust.

Changing with the economy
"Because the ad economy has been soft, any time they want to get on [the air], they get on," Mandel said. "The first time they get burned and can't get on the air, they'll change. They'll change as the economy changes."

The always colorful Mandel said just-in-time decisions are "why the print business is dying, especially the monthlies," because of their early ad-closing dates.

Since I had spoken to Jim Berrien about this trend before, and since Jim is never afraid to speak his mind on sensitive topics, I called him last week to talk about how it has affected the magazine business.

Berrien, president and publisher of the Forbes Magazine Group, said there are two things happening. Some marketers are booking pages late, and others are booking early then canceling late. "There's such a high degree of tentativeness," he said.

A publisher's agita
That affects magazines' ability to forecast and to make investments. It causes positioning issues, since advertisers that come in late still want front-of-book positions. And advertisers lose out because they don't take advantage of publishers' smartest thinking. "Mostly," Berrien said, "it just gives me agita" -- Italian for an upset stomach.

Berrien agrees magazines need to tighten lead times and said the Forbes titles "have shortened our close a lot." He understands marketers need to manage quarterly results and can't make decisions until late in the process. But he still thinks advertisers that don't plan ahead -- and stick to those plans -- lose out in the long run.

"Maybe this will drive a new pricing model," he said, with advertisers that buy late paying less but getting less in return. Less added value. Less service. Less voice on positioning and separation.

"Smart clients and their agencies recognize the benefit of well-planned schedules," he said. Like Mandel, Berrien believes the recession and anxiousness over war are fueling the just-in-time trend, and that it will end when a sellers' market returns. "It's as uncertain a time as we've ever been in," he said, "and I prefer to think it's about that rather than a shift in how we do business."

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