Making media buying decisions can be loaded with pitfalls for any business, large or small. Many times the advertiser may feel the need to personally deal with the media and may derive some level of satisfaction from negotiating rates directly, but advertisers need to be aware that there are a lot of factors to consider beyond just the per-spot rate.

As published in Inside INdiana Business

Pitfall #1:
Falling for the value-added pitch

An advertiser may be offered “value-added” as a motivation to buy a specific promotion. The pitfall here is that if the value-added spots don’t reach the audience being targeted, or if they are scheduled to air when not many people are watching or listening, and if the buy is made simply on the basis of getting free or value-added spots, it may mean media dollars are wasted. Advertisers need to ask themselves if the same money couldn’t have gone further utilizing a different tactic that more closely targets the audiences they are trying to reach.

Pitfall #2: Negotiating your own rates

Many times the advertiser feels a level of accomplishment when he gets the media to move below their rate card. While the cost-per-point may sound good, it’s up to the advertiser to be sure that he isn’t still paying more than he should and that the message is actually reaching the target audience.

It’s been my experience that a majority of marketers focus too much of their attention on the process of negotiating rates. Although this can be an important factor in media planning and buying, it’s only a small part of the process.

By fine-tuning the reach, frequency and cume (the number of different individuals who see and/or hear a message) and creating an integrated media buy, an advertiser can improve the buy and save money. Utilizing Arbitron and Nielsen ratings numbers, along with SmartPlus software, the majority of our clients have been able to get more for their budget and even saved money to go toward their bottom line.

Pitfall #3: Buying too much media

Buying more spots just because the budget is available may not always result in a better return. There is a point where putting more spots out there does not translate into selling more product. Any media buy should take into account the diminishing point of return.

For example, a $25,000-per-month buy can reach 82% of the audience six times at a cost-per-point of $18.00. Increase that to a $30,000 buy, and that can reach 87% of the audience nine times at a cost-per-point of $17.00. So, an advertiser may expect that spending even more can get more. But when projecting a $35,000 buy, while the reach and frequency go up slightly, the cost-per-point increases significantly to $18.93.

By spending $35,000, the advertiser has gone past the sweet spot – that threshold where it costs more per point than it did previously – and he’s spent $5,000 additional dollars that could have gone toward increasing the bottom line or toward utilizing another strategy or tactic. Once again, only media buying software can provide this analysis, unless of course you have a degree from MIT!

Pitfall #4: Not understanding that integrated is better

For special needs like tax preparation or handling legal issues, most business owners utilize the expertise of professionals. In reality, dealing with the media takes the same professional expertise. By partnering with a marketing professional, one who utilizes Arbitron and Nielsen ratings and SmartPlus media software, Pitfalls 1 - 3 can be overcome with an integrated media buy that maximizes the return on the investment.

Avoiding the pitfalls

What every company wants is to sell more products, increase sales numbers, and ultimately make more money. Many think they are being good stewards by managing their largest line item – their media budget – when actually they are getting caught by the four pitfalls of media buying and are not getting the greatest return.

To help avoid the pitfalls, a marketing professional assists advertisers to establish their marketing objectives, arrive at the appropriate budget, pinpoint target audiences and when and how best to reach them, and leverage the creative and its effectiveness. Evaluating and planning for these factors is what will assure the most cost-effective media buy for the advertiser.

By enlisting a marketing professional to develop media buying plans that avoid the pitfalls, advertisers can increase sales and traffic. Media buying plans remove the temptation to be biased toward one medium or outlet because it promises something free or some other incentive. They maximize the return from the same annual budget, and since additional budget dollars are not justified, advertisers save many thousands of dollars toward their bottom line.

Bill White is a partner in MillerWhite Integrated Marketing. Now in its 26th year in business, MillerWhite is a recognized leader in integrated marketing, setting benchmarks for the industry. A finalist for the Kelly School of Business’s 2006 Johnson Center Entrepreneurial Award of Distinction, the firm pioneered the VeriSyst interactive verification system, which “seamlessly” brings a viewer from a DVD direct mail to any web site. MillerWhite’s clients benefit from its proprietary protected marketing formulas, MW Fusion® and Unlocking the Power of Your Pledge®. The firm provides integrated marketing/research, public relations, advertising and interactive media services from offices in Indianapolis and Terre Haute. Go to millerwhite.com to learn more and sign up for the firm’s eNewsletter, mwfusion.