• by Cory Treffiletti , Featured Contributor, January 8, 2003

The Efficiency Model for media planning relies on the concept of purchasing media as inexpensively as possible (also referred to as tonnage). The Effectiveness Model, sometimes referred to as the Consumer Model, relies on the concept of purchasing media that will drive the highest response rate possible (also referred to as contextual or behavioral targeting). Both of these models for media planning are considered in today’s market and both are fully capable of achieving a client’s objectives, whether they be branding, direct response, or both… but which one is better? These two schools of thought are one of the struggles that Media Planners face on a regular basis.

Many agencies (both traditional and interactive) sell themselves on the idea they can negotiate a better deal than other agencies (relying on an argument for the efficiency model), but the online space is not at the stage where leverage is truly applicable. In all honesty, any agency can get a cheap deal based on the fact that the publishers are looking to book the inventory. The online industry does not have a finite supply of inventory in the way that Television does and regardless what your reps tell you, nobody is selling out of inventory these days.

Since the efficiency model is not as applicable yet, then it would seem the true competitive advantages of agencies are their capabilities for developing more Effective (rather than efficient) campaigns. Strategic planning and development of a solid contextual or behavioral rationale to support placement considerations are what truly adds value, since anyone can buy media cheap. It becomes paramount to focus on strategy and getting the most out of your media. You may have the budget to be ubiquitous, but should you be? Strategy can answer that question and the role of the strategic planner becomes more and more important, especially if advertisers are to demonstrate the capabilities of the interactive space to reach and generate reaction from their target audiences.

The efficiency model is actually utilized for all types of clients, whether they are brand-oriented or direct response. Companies such as Orbitz and X-10 made a living off the efficiency model and were able to build brands while at the same time achieving their direct response metrics. On the flipside, companies such as HP and BMW have built strong, successful brands while making use of the effectiveness model, placing their advertising only in programming and placements that are highly composed of their target audiences and paying a premium to be there. Their businesses are strong, making the argument that sales were strong enough to warrant the prices they paid for those premium placements.

Is a company such as BMW or HP better off in the long-run than companies like Orbitz or X-10? You can’t really answer this question either as it is too subjective. It is based more on opinion than on fact. These companies are still in their infant stages compared to BMW and HP, but they are growing and they have a different array of products and services.

My opinion is that these two models actually support one another. The effectiveness model, which is based on the contextual or behavioral targeting element, becomes the core of a strategy for advertisers while the efficiency model is run in tandem to lend additional weight to those targeted placements. The ubiquity aspect of the efficiency model serves as a reminder to the target, or a “mental tickler” for your target audience, while you’re contextually and/or behaviorally targeted placements bring your ads front and center while the user is contemplating a purchase or some other action. The ubiquity strengthens the likelihood that your message will be seen and heard first. It builds frequency.

While the effectiveness model guarantees reach into the exact target audience you are trying to achieve, the efficiency model increases frequency among these people. In much the same way that you start to notice all the silver cars in your town right after you buy a silver car, these two models of advertising serve to remind you of your potential purchase, and at the time of your purchase they become more effective and timely.

What do you think?