Media Zone: What Makes One Media Company More Effective Than Another?1 Apr, 2008 By: Adam MacDonald Response
Have you ever wondered what makes one direct response media buying agency better than another? Are the agencies that book hundreds of millions of media per year better than the smaller boutique agencies that book a modest $50-100 million per year?
Most agencies have gone head-to-head, competing feverishly for the right to be the exclusive agency-of-record (AOR) for many of the top direct response marketers. Why do some companies win more tests than others? Is it that some agencies really get better rates than others? Or is it, as some tout, that they have superior media buying clout and an ability to move in and out of slots quickly?
You also hear about extensive research and huge databases of information that help the account team to put together a more targeted media buy, thus being more efficient with better response rates. Some companies even brag about their media buyers' ability to negotiate on behalf of the client, and that they are incentivized by working on 100-percent media commissions — the theory being that they only make money if you are making money. Theoretically, that seems like a valid reason to get the best rates, but, more often than not, that can work against the client.
Some agencies even argue that all media rates are about the same, so outcomes of and head-to-head tests are strictly by chance. As media rates continue to climb and response rates drop, you can't afford to pick the wrong media agency. So what really makes the best media-buying agency — or is there such a thing? The answer is simple: yes, some media companies are better than others — but what are some of the most important things to seek out?
It is a fact that media agency clout does help secure coveted DR media time, but don't discount the fact that individual campaigns or shows have much more clout than agencies do. For example, the stations are much more interested in the buying power of a show at a given time than they are on the past history of a particular agency. The bottom line is that stations want the hottest shows in today's market,
The product category, along with the celebrities in the show, also can help entice the stations as well. Yes, they would rather run a show featuring Dell computers with an A-list celebrity like Pierce Brosnan than a cheap sexual enhancement pill with a no-name porn star in it.
What about those huge databases and prior station performance? Yes, it helps when putting together a test, but in reality the market changes so fast and each campaign has unique variables that it really doesn't help as much as it may seem. There is nothing like current market testing.
What about the individual media buyers who are 100-percent commissioned? Well this is not a bad strategy, but because of human nature, over-incentivizing the buyers can work against you. The more they book, the more commissions they make. It works the best if the buyers are 100-percent commissioned on actual net media efficiency ratios. This means that the higher the ratio above the acceptable minimum, the more commission they earn.
Are freebies and bonuses really that effective? Yes, the more an agency can include free media in your campaign, the better — and the more the agencies ask the stations, the more they get. What about good old fashioned customer service and overall campaign strategy? Nothing can improve the efficiency of media better than driving more calls and closing more sales. Some agencies employ expert producers and back-end specialists to help drive calls, close sales and reduce bad debt and return rates.
Adam MacDonald is executive vice president and co-founder of Contrarian Direct. He can be reached at (949) 293-2636 or via E-mail at firstname.lastname@example.org.