- Contest Factory
- January 19, 2022
Media Buying Efficiencies Explained
Media buying has been an emotional rollercoaster for the past decade. There has been more data, legislation, transparency, purchasing philosophies, methodologies, and platforms that have molded the industry over the past 10 years. While television glamorizes ad agencies like Mad Men, they never show the behind the scenes scientist running the media buying; the creatives are the heroes in advertising yet your media buyer directly is responsible for acquiring share of mind, brand recall, purchase intent, conversion, repeat buyers, and customer loyalty. The job is hard, it’s intense and it’s constantly changing. Sitting in the media buyers chair, I say let’s unveil the secrets and celebrate the successes we have learned through detailed and tireless testing of thousands of variables.
And while media buying sounds like it may be glamourous, again that is saved for the creatives. As a media buyer, and as in most buyers of any product or services, your primary goal is to buy at the lowest price possible with the greatest results, making your cost to acquire as low as possible while maintaining a source that delivers high lifetime values. Back in the early 90s before Google hit the street, most new customer purchases cost your business a pretty penny and you expected to recoup that cost in a lifetime value that was promising and filled with roomy gross margins. A media buyer would pay $110 for a first purchase and then use more affordable tactics to get the 2nd purchase since they now own the customer data; they can now market directly and not spend money on media, rather the form factor (direct mail, email, SMS, inbox flyer) in which you use to get the 2nd purchase. With the $110 Cost to Acquire (CTA) the buyer can also expect to earn an average of $2,600 for the life of the customer, making the ROAS 2,364% – not half bad. In fact new media buyers these days would scoff at paying for a customer and not being profitable on the first purchase. Times have changed. Let’s talk more about media buying efficiencies.
Media buying is now likened to your investment portfolio; good reason for this is that we will discuss in a moment. For now, you need to know that your media buying portfolio should be diversified much like your investment portfolio. You need mainstream media for awareness and top of funnel marketing. You are basically basting your top of funnel prospects getting them ready for your messaging. Those that find your product or service interesting will be made “Aware” of your product or service at the mass media level.
The reason media has started to be associated with investment portfolios is the new way in which media is being sold, real-time-bidding (RTB); this means that publishers (supply-side) make inventory available on the open market to the buy-side or demand side. Buy sides will put bids in while supply side sets floors and accepts bids with automated algorithms. This enablement in the market adds efficiency immediately with significantly reduced inventory that can get you the mass impressions you need, while you pay direct for guaranteed placements, time slots and custom creative exactions.
While you once could only buy TV media from the networks, streaming has changed this. Digital took over the mainstream media with over-the-top media buys. You can now purchase TV commercial space using RTB media buying. Now plenty of platforms have substantial minimum requirements for media spend on these platforms, so it will be best to partner with an agency that has access to the platform and aggregated media spends that will enable you to play with the big boys.
Another incredible opportunity with RTB is the ability to target data sets from different providers; specifically identify demographics and more importantly psychographics of your target persona.
Now you are cooking with oil with ad efficiencies – layer on direct buys with your RTB buys and you will have people crossing platforms from TV to internet, podcasts, and print visiting the properties they normally do and getting multiple exposures; this is true efficiency to hit the same target customer across the platform with the same message for affordable ad buys.
Mind you not only does the buy need to be financially efficient but you need to be getting qualified and quality responses to make this effective. You will continue to test audience segments and messaging to find your sweet spot in media buying efficiencies.
Remember to use added value content as an offer in exchange for email so you can own your customer data and continue to drive efficiencies with email campaigns. Once you have an email you can further augment your data with list service providers like Epsilon or Axciom and have the ability to also direct mail or target GPS zones enabling to cross-devise households.
Technology continues to enable us to do more while privacy laws are out to get these same efforts. Remember that owning your customer is the best way to market – collect data and buy efficiently. Partner with experts and you should be ahead of the game in the SMB market.