The media budget has always been the largest single part of any advertiser's investment in marketing communications. But in today's increasingly complex communications eco-system, the effective deployment of media budgets can have an enterprise-wide effect, influencing everything from brand reputation and new product development to growth.
To help explain the role media agencies can play in today's business world, the Institute of Practitioners in Advertising is publishing a series of papers under the umbrella title 'Know the Value of Media'.
Not that long ago, the allocation and implementation of a media budget was a relatively straightforward business. The audience would be defined, and its media consumption habits mapped out. Money would be allocated to a limited number of different media - say TV, press, outdoor, radio, search and online display.
Over time, results would come in, be analysed - and the process would start again. It was, broadly speaking, a static exercise. Its effect was easy to measure and understand, but outside of functions like sales and marketing, of marginal importance to other parts of the client organisation.
Today, of course, it is radically different. The media landscape is not only bigger than ever, marked by dynamic and unpredictable change, but infinitely more complex and multi-dimensional.
Consumers consume more media than before, from multiple sources. They create their own media too.
Automation and speed rule. A page takes 0.1 seconds to load, but in just a fraction of that time - usually less than 10 milliseconds - a highly complex set of decisions are made in which the browser's cookie is analysed and advertisers bid for, and serve, impressions.
Indeed, the definition of media itself is in a state of constant flux: not just social and user-generated media, but a proliferation of advertisers' owned media channels.
As the number of touchpoints has increased, so there has been a marked shift - as measured by IPA Effectiveness Awards winners between 2004 and 2012 - away from campaigns led by paid media towards those led by owned media (advertiser owned channels) and those that are led by consumer participation and focusing on earned media channels.
Analysis of winning IPA Effectiveness Awards papers shows the average number of channels in use has risen from 2.4 to 8.9 between 1980 and 2012; in 2012, 85% of all winners used digital, up from 55% in 2004, and half the winners in 2012 used social media.
Media's complexity and continuous evolution underline the importance for clients of working with partners that fully understand all of it; have the capability to map out its impact both on the consumer and the client organisation itself; and provide actionable insight.
This is important because, amid the complexity, there is unparalleled opportunity. Allied to an increase in channel choice, digitisation of media and the rise of automated trading bring the holy grail of media closer: the right message, to the right audience, at the right time, and in the right place and context.
Nor is it hyperbole to suggest that media can play an enterprise-wide role. The key is the consumer data generated, not just by media spend, but all other forms of marketing activity. Much of this data belongs to, and is generated, by media owners, and significant amounts are generated by advertisers themselves. Data is also available from new-form data businesses such as comparison sites.
This data is also distinguished by its availability in real-time, allowing advertisers the ability to access instant feedback loops, and use that information immediately if appropriate. In the right hands, and analysed correctly, this data can be used by advertisers to generate insight across a multiplicity of functions, including:
- Brand and corporate reputation.
- Customer care and response.
- Operations (particularly in the case of service and retail brands).
- New-product development and innovation.
- Organisational structure.
- Pricing and margins.
The conclusion is clear: media is the engine that can drive the multi-functional, cross-functional workings of the modern-day enterprise and help drive long-term shareholder value.
This being so, it is also apparent that media is no longer the preserve of sales and marketing, but needs to be valued, embraced and understood across the organisation.
It also is imperative that advertisers look on media as an investment, not a cost.
Getting it right, however, isn't easy. Many of questions that need to be answered go beyond the historic analysis of media budgets and channel optimisation: what is social media for?
What is the right balance between paid, owned and earned media?
What is the role of participation-led media and consumer-centred co-creation?
What is the right data? Who owns it? How do you join up, and extract value from, the multiplicity of available data sets?
What are the right metrics? And what is the right investment in technology?
But simply having the numbers isn't enough. Pulling all this together in such a way as to allow organisations to make sense of it, and to react in real-time, requires something special.
A helpful analogy is that of the conductor and orchestra. The orchestra can play the right notes, but it needs the conductor to turn into a cohesive whole.
In this context, therefore, the role of media agencies is critical. As the guardians of all the connections between consumer and brand, as interpreters of data, they are the ones best placed to ensure effective and purposeful harmony.
It is to help understand the impact of these fundamental changes in the media eco-system that the IPA has initiated its Know the Value of Media project. Over the next few weeks, three papers will be published.
In the first, published on October 16th, MEC UK's chief data officer David Fletcher looks at the key building blocks of data and integration of multiple data sets.
The second, (also published on October 16th) by Denise Turner, chief insight officer at Havas Media, maps out the current landscape and, using the IPA Effectiveness Awards database, examines the role of multi-channel integration.
In the third, (published on November 13th) Andrew Willshire and Paul Sturgeon, respectively head of new initiatives at Data2Decisions and a director at MediaCom, look at how media has become a strategic tool that both communicates and delivers the brand promise, and the implications of this for client organisations.
The initiative culminates on November 13th with an event, hosted at Google, where marketers and C-suite executives can explore the key issues with leading media agencies and owners.
There is much to debate.
Tom George is Chair at MEC London and the IPA Media Futures Group.
This article first appeared in MediaTel.
For more information on the Value of Media, please click here.
Last updated 16/10/2014