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Avoiding Traditional Media's Trump

  |  March 1, 2002   |  Comments

Ever seen a deal where online media is thrown in for 'free'? Here's how to evaluate its real worth.

Online media buyers increasingly face turf battles with their traditional counterparts in their own agencies. It happens when a large media company with both traditional and online properties tries to put together a cross-media package.

Most advertisers and agencies are accustomed to considering the merits of various offers only against the other ones in the same medium. When you mix the online and offline media together, you wind up with a combination of two different media buying staffs and a much more complicated comparison.

In a perfect world, these two groups of people would consult one another to determine whether the package solved their collective needs. In the much more common reality, this instead results in the one group (not to point fingers, but it is very frequently the traditional media group) agreeing to purchase media the other group doesn't want.

A common scenario brought up by readers of this column is a traditional buy that takes place with the understanding that a "free" Internet media component would be thrown in. The online staff then learns that part of the online budget is going to be allocated to it. Catfight ensues.

Why Now?

This wasn't a great problem only a year or so ago. I saw many offers for "synergistic" deals way back in the beginning, around 1995, but since then the media companies began worrying about large traditional buyers making unreasonable demands for free online media. To thwart this, they separated their online and offline units, giving the online reps a great excuse as to why they couldn't give their wares away. It wasn't very synergistic, but it paid the electric bill. So, until recently, it was about as difficult to get large media companies to package up their offerings as it was to get the agency buyers to consult with each other.

But in the recent media consolidation, much management pressure has been put upon sales reps to leverage as many media properties as possible in a sale. The thought is that once they inch their way in, they might as well pile as many vehicles as is possible inside the buy -- probably a sound strategy now that the advertisers have been trained that online media isn't free.

How to Cope

The very first order of business is to ensure that both sides of the fence -- online and offline -- are involved not only in negotiating the price and budget but also in deciding whether the media vehicles make sense at all. Surprisingly often, the other side is brought in only after the originating side has made the decision to make a buy. It's all right to make a buy decision with just one side of the equation, so long as the other side is granted veto power if it's later determined not to make sense for its medium.

To promote intermedia harmony, a reasonable budget allocation must be assessed to each side. Seldom will the sales rep's prices reflect the proper allocation. Though she may position the online media as "free," the buyers must abstract a real CPM to it to judge it properly against other media options. This is best done by adding up all the impressions across all media and dividing the cost across them all.

For instance, if the newspaper tells the agency that it can get 900,000 impressions for an $11 CPM and that it will throw in 100,000 impressions of "free" online media, then the agency would tell the client that the online and offline media actually is $10 CPM (adding all the costs together and dividing by the sum of all the media impressions).

Then, the agency sticks that abstracted CPM in among the other potential opportunities on the media buy list. If it compares favorably, the buyers can say they've stumbled on a favorable deal. If it does not compare favorably, then the client is told that it can save money by reducing the print buy and purchasing different online media.

It's very much like getting offered a coupon with something you buy. It could be useful. It might not be. Getting a free coupon for a theater ticket to see the new Britney Spears movie when you check out at the movie rental place could either be a reason to shop there or a mild insult. Likewise, the "synergistic" add-ons of other media to a media proposal need to be considered on a case-by-case basis.

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ABOUT THE AUTHOR

Tig Tillinghast

Tig Tillinghast helped start and run some of the industry's largest interactive divisions. He started out at Leo Burnett, joined J. Walter Thompson to run its interactive division out of San Francisco, and wound up building Anderson & Lembke's interactive group as well.

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