Media Buying Process – How to Buy Media
“The dirty little secret in advertising today is media buyers’ inexperience. Pure and simple.” Lee Morrow, CEO (Media Buying Academy)
Once you’ve acquired a budget, identifying exactly who you are trying to target and exactly which medium to use, along with identifying the desired TV, Radio or publications, and have created an appropriate media schedule, you need to purchase the media. I usually put buying the media before creating the ad, since you often have to buy several months in advance. However, some managers want to see what the ad will look like, before approving the media purchases (you’ll have to see what works within your organization).
Media Buying with Agency Buyers – The Bad and the Ugly
I have seldom used anyone to select and buy my media–once I realized that most ad agencies and media buyers make a 15% commission on the media they purchase. This seems more like the fox watching the hen house. Media buyers are supposed to get you the best rates in the correct publications. However, they make a commission on the cost of the publication, which means “the better they negotiate, the “less” they make.” Go figure.
In fact, they will often tout that it doesn’t cost you anything to use their services. Following is a quote from a media buyer’s website:
“Q. How does the client pay for this service? A. They don’t. The media buyer will take a commission from the media owner. A truly cost-effective adviser!”
Really? How ‘bout I negotiate a similar rate, and then after I have done the best I can–deduct the 15% on top, since the publication doesn’t have to pay the buyer (see media buying negotiating). Saving myself the 15% commission. Now that sounds like an, even more, cost-effective option.
And from another media buying site I pulled the following:
“If we were to tell you that it wouldn’t cost any more money to delegate the media buying function of your job… and that we have extensive experience creating effective and money-saving media buys… and that we provide this service AT NO CHARGE TO YOU… how fast would you tell us to “go for it”?
I have a problem with the honesty of the previous statement, “At no charge to you?” This isn’t exactly accurate since I know I can get “their” fee back if I don’t use them. In addition, as stated at the top of this section by a well-known media trainer, most media buyers are inexperienced at media buying and don’t save you much money (certainly not much more than the 15% it cost).
While a VP of Marketing at a $130 billion corporation, we were asked to consolidate our buying through a central agency. It should have resulted in significant savings, considering all the media we bought together as a company. When they came back with the rates (including their commission), it was higher than we were paying previously–I was not impressed.
We obviously sent them back to the table, asked them to work with the national VP’s, not their regional reps, so we could get economies of scale across the nation and across our divisions. They were where then able to beat our previous rates slightly (smelled like a fox). It was helpful that we already knew the process and the pricing or it would have cost us more with them, than without.
Media Buyers – The Good
Fortunately, some media buyers are fantastic–within corporations and within outside agencies. They are well trained (especially if they have gone through the Media Buying Academy), understand the media industry from the selling and buying side, are skilled negotiators, and can often garner twice the number of coverage/impressions for 60 – 70% of the best cost you can negotiate yourself (even after their “commission”).
One such media buying firm that never ceases to amaze me is Keystone Media, headed up by Rick Call (ask for him). There are other good media buying firms out there, but I have yet to find one that can best Rick’s team–his prices are sometimes 1/2 the price of any other media buying organization. But then, buyers like Keystone Media are actually more like media brokers, since they will buy up the outstanding excess inventory at a massive discount (otherwise the stations will just throw in the ads just to fill the time, but it is not always yours, and they also get nothing for them). It is sort of like the “Price Line” for advertising (where they get you good rates, but they buy up the extra rooms – and won’t let you know in advance so it doesn’t have a channel conflict with their other resellers).
It is appealing to have someone help select and purchase the media–the key is finding qualified professionals that understand the process well enough to get you the terms you need to maximize ROI, rather than reduce it because of “their” increased cost.
Note: My experience with media buyers is primarily with trade publications (as is typical with most specialized high-tech products). If a campaign is comprehensive (using trade pubs, consumer press, business press, billboards, add words, television, and radio (especially in multiple markets that must use the top stations in hundreds of markets)), then you should not try to do this yourself, unless you have a trained and certified media in-house buyer who has the resources and know-how to do the necessary research. However, this also applies to finding a properly trained and certified external media buyer (within a media buying or advertising agency).
How To Negotiate – Print Ads
Although this example is for print ads, many of the negotiation points apply to other media buys. If you do not have an ad agency or a media buying service, and you have a relatively straight-forward trade publication campaign, you will need to know how to negotiate your media placements. Even if you do let someone else negotiate your media buying, you should still know the process and how much you should typically be paying, if anything, so you can estimate for your budgets.
I would highly recommend sending your designated media buyer (usually the ad manager or Director of Marketing/Marcom) to the Media Buying Academy. If not, then at least order the videos or tapes (they are similar to the cost of one seminar and can be re-used to train additional folks). Regardless, the following are a few basic tips to negotiate print ads (print this list and check off each item to ensure you maximize your return).
24 Ad Points to Negotiate
- Don’t go by the rate card. Buying advertising is like buying a car (except a Saturn with fixed pricing). As such, there are multiple terms, options, time frames, and sale techniques–of which you need to counter to negotiate, not just “buy” your medium. As such, this is not the position for the timid negotiator, unless you have a tiger behind the person talking to the ad reps that are making the final decisions.
- Negotiate magazine position and page position. As part of your negotiation, you need to try and get within the first third of the magazine, since the readership is higher. The exception is if you are going for a front or back cover, or wish to have your ad next to an editorial (opp ed) that is reviewing your product category. You also need to negotiate left or right hand positioning on the page (right-hand ads typically pull more).
- Negotiate research. Magazines conduct regular readership campaigns to find out what their constituents would like to see. Sometimes you can get some of your own research questions addressed–a cheap way for you to get quantitative research at no additional cost. They also run advertising awareness research campaigns. You need to negotiate some coverage in both of these as part of your placement.
- Negotiate web site adjuncts. Most publications nowadays have a web component of their printed publications. You want banner ads and coverage for their on-line constituents also–especially if they may be adding their on-line readership to their overall posted circulation.
- Negotiate the use of their mailing lists. The reason you are selecting a specific trade publication is that they have already found your desired target audience. You can often gain access to their list for your direct mail efforts (through a bonded mail house (they won’t just give you the list). This saves you the cost of purchasing lists, and the chances of having the correct targets are very high.
- Negotiate free ad space in special editions. Some publications have an annual special issue–see if you can have this included for free.
- Negotiate more color. Some publications charge less for two-color than four. Use the two-color rate card and then ask for the extra colors as part of the buy.
- Require approval to close. Like I mentioned earlier, if you are not a tiger, or even if you are, you should let the sales rep know that you don’t have the final decision–and then not let them talk directly to the person who does. This is a technique that they will often use when you make a special request…you can turn the table and use the same approach. I always told my “battle-hardened” ad manager that my initial answer was always going to be NO. This allowed them to say, my boss says no, and wants…
- Negotiate toward the best rate on the rate card, even for a short campaign. For example, if they have a 24-time rate, but you are only running a 3-month campaign, you already know what they are willing to go down to (based on volume). This should be an easy target.
- Negotiate an escape clause. If they want a long-term commitment for the better rates, then ask for an escape clause (ask regardless). This means that you can cancel the remaining ads if the publication doesn’t pull, or if the product slips or is canceled, or if your budget gets kills (especially during the 4th quarter at a large public company) without paying a short rate. By the way, one well–respected media buyer said you can always cancel a campaign. They won’t back charge you the higher rate and risk you not advertising again. He says the best words are, “We won’t be able to pay for this.” Nobody wants to get tied up trying to collect the uncollectable.
- Base your value on the LPP. Sales reps will try to use cost per thousand (CPM) to establish value. This helps you to know the potential reach, but the % of the total reach that matches your profile, and their influence within the buying process is the most important factor. This is why I prefer to use the cost per lead per publication (LPP). This ratio will cut through all the chaff and tell you immediately if you are “fishing in a stocked pond” or if you’re not fishing where your buyers swim. When the sales rep brags about his CPM, counter with your revised % of his circulation that even meets your need. Then counter his CPM, based on your actual target, is way too high–and use another publication rates of CPM/actual target to reduce the price.
- Re-negotiate based on the CPM rate for the best LPP within your group of publications. For example, when deciding which pubs to keep and which to drop, you will do an analysis to get the cost per lead per publication. If there’s is borderline, you can ask them to match the pricing that you need to keep them–or they are out. And then do the same with your other pubs–those that will give you the revised pricing that will put them in your “keep ‘em” pile you keep, those that don’t get cut.
- Make sure the editorial matches the readership. If the sales rep uses CPM, and their editorial content for your target is only 10% of the publication, then re-quote the CPM in those terms and go from there.
- Contract for no rate changes. Some contracts say the publication can change the rate at any time with a 30-day notice. Include a clause that says your rates are guarantee during the length of the contract.
- Don’t always buy on “specials” but buy what you need, when you need it (but save the “specials” to hit them up with them later if you decide to invest in the publication later).
- Don’t be embarrassed to make a ridiculous request at any stage of the negotiation. The only way I can afford to buy from you is if your rate is $ ____. The worse they can say is no–and you may get some terrific deals.
- See if there are any alliance ad deals. When launching Netscape, Microsoft had a campaign where they subsidized your campaign if your put, “Works with Microsoft Windows” prominently within your ad (the ad reps discretion). As a result, we got seven Ziff Davis publications…for less than 1/2 the price of one! It was nice that our ad rep told us about these deals–you need to ask. In addition, see if there are affiliate or co-op programs with Intel, Microsoft, and others for publishing compatibility with their applications. You can also see if you can split the ad cost with an alliance and develop your campaign jointly (works best for products that require another to work (i.e., a modem to use AOL, etc.).
- Negotiate the payment due to terms. Some pubs require money upfront, others allow you to pay afterward–this is obviously better, or worse, depending on your budget. For example, I may run out of money for the 4th quarter, so I asked to be billed at the beginning of the first quarter. It is somewhat risky for the pubs if you don’t get the budget…but it may be the only way to fit them in. Other times you may have a budget to spend now, and you can pre-bill if you get a discount (of course).
- Take into account seasonal ad buying. Some publications may offer discounts during certain times of the year (it helps them solidify their ongoing business if they have commitments in advance).
- Negotiate editorial coverage. Some publications like PC Magazine typically have a Chinese wall between sales and editorial. However, with other publications, it may be the actual editor in chief that is soliciting ad space (I’ve had it happen within multiple smaller and hungry trade publications). In these cases, you can actually “buy press” with your placement. It is not worded as such, but these publications will commit to reviewing your product (first looks and complete reviews) if you commit to advertising. If they will do it, we can double our number of impressions by taking advantage of their “financial connections” (some editors realize – no ads, no paycheck).
- Negotiate “spot” ads. Sometimes there is a review within the editorial schedule that covers your category, but it is during a period you are black. You can negotiate that it is included free, or at least at the previous rate, even if it is disconnected to your regular campaign.
- Negotiate with the VP of Sales, and bypass your local and regional reps. This is especially important when you want to combine the total number of ads from all of your divisions. For example, I was targeting a publication that already featured ads from several of my company’s other divisions. I first contacted each of the divisions to find out their rates (they were different), found the best, and then contacted the VP of Sales to negotiate a “group” rate for all our divisions that took into account our joint buying power.
- Consider using a media auction. Some sites like MediaBids will offer services similar to on-line travel buying. Check it out to see if it works for you.
- Deduct the agency fee–as your final negotiation. After everything is done and negotiated to your best ability, deduct the 15% fee that would usually be paid to an agency. Why not, they would have negotiated with an agency, and still had to pay the 15%. There’s no reason you shouldn’t keep it since you are the acting agency. I’ve never had this denied–they’ve been shocked, but it was never turned down.
There are obviously many more points to negotiate (especially when purchasing radio, TV, web and other types of medium), but this is a good list to start from. By following these points I was able to take a full-page display from PC Mag that had a line card price of $72k down to $36k when I first talked to the ad rep, then it went to $10k for “new advertiser” special, then $8k with a 6-month contract (with an escape clause, free web placement, right hand, front 1/3rd placement, with access to the mailing list, plus more). So, there is often a lot of room to negotiate.
Average Target Ad Rates
I was commissioned to create the ad rates for a new form of medium. As part of the effort, we had to see what the typical rates were for different media types. I was surprised that it wasn’t readily available. However, after several days, scouring the web, calling every agency I knew and speaking with all the buyers I could find, including one of the largest trainers of buyers (the Media Buying Academy), I came up with the following information. It’s a little rough, but may prove helpful when trying to get a ballpark for media and product types:
- Media Buying Academy. This is the defacto training boot camp for media buyers. It has been attended by media buyers from Disney, Time Warner, Coca-Cola, Sony, Burger King, Delta, Google, GE, General Motors, Microsoft, Bush, Toyota, Intel and hundreds more. You should be able to re-coop the cost of the course from your very first media buy afterward. See Chanimal Five Star Review.