• by Tom Hespos , August 19, 2003

Our industry has been under consistent pressure over the past few years to make online media fit into traditional planning and buying processes and models. We want this. It makes it easier for clients to treat online media like any other medium in the mix. If online media can simply take its rightful place on the master flowchart for an ad campaign, we've won a significant battle for both media dollars and credibility.

In fighting that battle, however, we're still waging a war against turning online media services into a commodity.

For decades, many ad agencies were compensated based on a percentage of media spending. Agencies would earn a commission on each ad placed, which might range from low single-digit percentages for broadcast all the way up to 15 percent (or in some cases more) for print. Although many agencies are compensated for the time they put into media services based on a retainer or an hourly fee, clients tend to check their expenditures against what they're paying for media services, to make sure that they're not paying too much on a percentage basis.

Clients also tend to draw parallels across media. If broadcast planning, buying and maintenance can be handled by an agency for 4 percent of the total spend, clients sometimes argue that interactive should be handled in a similar way. They mentally pair off planning, buying and campaign maintenance for broadcast with their counterparts on the interactive side. While this might not seem like a considerable leap of logic, the work that goes into one isn't equal to the work that goes into the other.

On the traditional side, planners put together a campaign that runs over a specified period of time and work to implement it as it was planned. Barring a client spending cut or a shift in strategy, the goal is to implement the plan with few changes along the way. Meanwhile, on the interactive side, planners know ahead of time that their launch plan is going to change over time.

In the August issue of Media Magazine, Bryan Russiano, VP/managing director at Semaphore Partners, summed this up rather well.

"In traditional media, 75 percent of the work is planning/buying and 25 percent analysis," he said. "In online, it is the reverse."

Not that interactive media folks put less effort into planning, but what Russiano says is true. A large percentage of the work in interactive falls into campaign maintenance and optimization.

To try to pair off campaign maintenance in interactive with its counterpart in traditional media is an unfair comparison. Take a look at a print campaign. Once a plan is in place, buy maintenance consists of issuing space reservations and insertion orders, monitoring the position of my ads to make sure what was promised was delivered, and posting the activity. Maybe there's some negotiation if an ad doesn't meet placement guidelines or a magazine fails to make its rate base. It's not a lot of work in comparison to online campaign maintenance.

In online, we're looking for opportunities to change the campaign, not trying to solidify our placements. We're constantly looking for the story in the data, and looking for ways to change the flow of the media activity so that we will maximize response or brand impact. We have an expectation that the buy will change many times.

We do this for one reason - we can achieve significant lift in performance. If I have two sites running on a plan and one is performing at five times the rate of the other, I can immediately leverage that. Our counterparts in traditional media never know about this stuff while it's actionable - they find out weeks or even months after the fact. There's significant value to this, with optimization often able to lift the effectiveness of an online campaign by several thousand percent over time.

I think we can afford to let planning and buying of interactive campaigns be priced much like the corresponding tasks in traditional media services. But our campaign maintenance chores are somewhat unique. We should be mindful of that as we negotiate compensation agreements with clients. We need to make sure that they know we're not simply issuing paperwork and post-buys. We're working on a continual basis to improve the effectiveness of their campaigns.