January 25, 2023
Ad Execs: 'Results' No Longer Top Factor Driving Media Buys, 'Rate Deals' Now More Important
- by Joe Mandese @mp_joemandese, October 23, 2013
In what appears to be a significant shift in the criteria they use for valuing the media companies they do business with, ad executives say the ability of a media supplier to generate “ad results” is no longer the most important factor for getting on a media plan. Other factors, including “aggressive rate deals,” are now considered marginally more important factors.
The finding, which comes from the latest semi-annual survey of marketers and agency executives by Advertiser Perceptions Inc. on their perceptions of media companies, shows that the importance of “ad results” has fallen precipitously over the past year -- especially among marketers. Only 72% of marketers vs. 76% of agency executives surveyed cited the importance of "ad results." That’s down dramatically from a year ago, when 85% of ad execs cited that criterion, which has long been the No. 1 of 15 factors API tracks for influencing media buys.
While most other factors remained stable, the relative importance of “integrated media buys” and “multimedia” packages showed significant upticks, jumping four percentage points and three percentage points, respectively, over the past year.
Source: Advertiser Perceptions Inc.
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23 comments about "Ad Execs: 'Results' No Longer Top Factor Driving Media Buys, 'Rate Deals' Now More Important".
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Interesting, but if you take a step back -- getting better "rate deals" by default improves performance so these buying criteria are really tied together Joe.
If your an "ad exec" working inside of a company today and you aren't focused on the relationship between marketing dollars spent and return on that investment in terms of results...either you and/or your CEO will be leaving the company shortly. With so many people out of work and the marketplace in such a competitive state...Who in their right mind values the art of making a deal...without focusing on whether those "deals" are generating real bottom line results ? Sounds like the talk we hear pre Internet crash years ago...when start ups were saying.."we don't need to make money" Don't be deluded by this data...Stay focused on driving results...always.
Hmm...did anybody see the article [in another venue] concerning Nissan today? Appearing with their ads next to beheading videos? Anybody else see the interesting convergence of these two, on the SAME day?
Yeah, I'm sure Erich Marx at Nissan is having conversations with some people about 'Rate Deals' today, as Al DiGuido astutely points out.
So much of "results" oriented data and insights are focused on brand lift, engagement or, yes, still clicks - and not inclusive of cost. As a researcher, I take this to mean results are still important - we just better tie it to what was paid.
@Ari: Just reporting the findings here, but I think it was news that -- at last in terms of the perceived values ad execs apply to media -- rates came out ahead of results. "Results" can be interpreted in a lot of ways, including performance, cost efficiency, etc. That is not for me to say. Just reporting what was in the study.
Media can only be partially responsible for return on investment. The idea that goes into the creative, and the engagement it creates, is more important. Just because you have a whiz-bang online video unit with 3-D sensing octopus tentacles and eye tracking detection doesn't mean its going to work, unless the creative message behind it resonates.
In today's economy...where people are being put out of work...and businesses are closing down...."RESULTS" can have just one definition...ie...does the marketing strategy and the dollars spent drive incremental sales and profits to the bottom line. If you are an organization that isn't focused on measuring all of that...time to pack your bags...As an industry...how dare we be so nebulous when the stakes are SO high ?
Amen on the comment Jonathan...It's much more than programmatic buying and ad insertion...WE aren't focusing enough on messaging and building more effective engagement with customers...There is a HUGE difference between REACH, engagement and effective ROI.
Update: A respected research guru pointed out that we left out some methodology and sample info to provide important context to these findings. I will update the story and publish an addendum in tomorrow's edition, but in the meantime, the findings come form online surveys with more than 1,397 marketers and agency execs (40/60 split) involved in media brand selection decisions.
The data is considered directional, as some findings reflect data with low bases.
Weighting: Data has been sample balanced and weighted to reflect relative agency/marketer influence.
There's got to be something wrong with the poll or the sample or something to come up with these results.
Agree Steve - I can't possibly imagine people responding that results are not the most important. I can see pricing and deals being a factor - but I feel like I'm misinterpreting this to say "if I got a great deal on xyz website, I'd be ok with it even if the results weren't great b/c I could tell everyone I was able to negotiate a deal". And I just can't imagine that's what people were trying to say, so there must be some confusion with this study. Keep in mind, results don't have to just be metrics, they could be brand awareness, sales, exposures, recognition - really anything. So would love some more clarification Joe.
Ever heard the old adage, "Penny Wise and Pound Foolish?"
This is why Facebook sells ads, they know no one wants more ads and they have more of what no one wants than anyone -- and at the lowest prices!
Just the opinion of an outside observer, but it would appear that the poll did not grade the success, or lack of it, of the responding ad execs. So, it includes Grade A, Grade B, and so on down the ladder. If those less-than-successful Grade B ad execs are prone to making panicky decisions, such as buying media plans that look good on paper at the outset - 2 for the price of 1 stuff - and offer the excuse that "ad result numbers are suspect, at best", wouldn't that skew the study results?
I actually think this is a *good* thing: a signal that marketers are beginning to realize that their online KPIs and their sales in the real world are badly misaligned. In other words, our "results" are not leading to results. There is still a lot of recalibrating to be done with regard to KPIs, but until that is done I think a lot of CMOs are less willing to pay for "performance" that exists -- and even then, only theoretically -- on internal reports.
Good discussion, and looking forward to Joe's update that will include methodology. Three other things I wonder about the study: (1) When we say "aggressive rates", do we mean media bought most cheaply, or agency fees? (2) If it is media, does it lean more toward TV, or, per Tom Cunniff's excellent comment above, more toward online ads? (3) How many of the agency respondents were from so-called media agencies vs. so-called creative agencies?
Awaiting those clarifications, I still have one overall questions: Could the priority on low rates vs. strong results really be an example of "the soft bigotry of low expectations"? Could it be that many respondents had just given up on proving results?
I sincerely hope not.
This is a massive concession to failure and an equally massive indictment of an agency culture that always seeks to shift responsibility for performance from the message to the medium in a supply-side economy with no demand.
what do you do when the way you do your media buying at a agency trade desk and exchange no longers works because people are not engaging standard adsizes anymore no matter how much beharvioral targeting, placement, ect you are doing? Change the subject with your client from I got you these results to I got you this great value on these ads.....
To clarify my earlier comment, if we care about results (and we all do) then it's critically important to put the goalposts in a smarter place.
When the brand's goals are clear and well-aligned, amazing things can and do happen. For example, all marketers should look at what Subaru and Carmichael-Lynch did with Rocket Fuel: find audiences that would create the most incremental uplift rather than simply targeting customers who would have converted anyway.
The big opportunity here lies not in lowering prices, but in raising our eyes from our spreadsheets to check whether our KPIs are taking us in the right direction.
At the end of the day, it's all about how you want to spend your time and money, because fifty-dollar/CPM deals on TV (the reach devil we know) fail to reach the exact same folks that ten-cent/CPM deals on Facebook fail to reach (a rather dubious USP for the market leader).
Just to clarify the research findings for everyone… Ad Results remain of great importance to the vast majority of advertisers, it’s just that other criteria have risen in importance. In an effort to better understand what motivates advertisers to work with one media company as opposed to another, we asked advertisers to rate the importance of 15 different criteria in determining the large, multi-brand, media companies (it’s important to emphasize we are talking about buying / selling with large multi-brand MEDIA COMPANIES like Time Inc. and not individual properties like SI, Fortune, People) with which they choose to work. Here's what we found…
• The criteria of importance (4 or 5 on a 5-point scale) to most advertisers are Aggressive Rate Deals, Easy of Doing Business, Understands My Business, Customer Service, Ad Results and Quality Audience Practices.
• Agencies and Marketers differ, with more Agencies considering the following criteria important (4 or 5 on 5-point scale) than Marketers: Customer Service, Quality Audience, Integrated Media Buys, Marketing Partnerships and Multi-Media Offerings.
• When it comes to trends in comparison to the same time one year ago, while still important to both agencies and marketers, Ad Results declined in importance most, dropping 10 points. Going from 85% a year ago where it ranked number one across all criteria, to 75% in the current study where it remained top ranked, however among a group of six different criteria."
Frank Papsadore, VP Marketing, Advertiser Perceptions
If the advertisers CPA is being met at a goal that works for them, it doesn't really matter whether the CPM is .50 cents, $5.00 or $50.00. If it backs out, it backs out.
What media buyer would KEEP a placement if it's not delivering the necessry results. I don't care how good of a deal I'm getting, if it's not delivering good results, it's not a good buy. The two MUST go hand-in-hand...duh.