Imagine you’re part of a big family that likes to eat. You buy a lot of food, and it probably can get pretty complicated keeping track of what everybody wants, what stores have what foods at what prices, where the sales are, always having the right amount at the right time, etc.
So, a while back, to make things easier and more predictable, you decided to hire someone to help you plan all your meals a year in advance. To be sure that you would get the food that you needed for each meal, and to save some money, you hired someone to pre-buy all of the food that you would need according to that plan.
Of course, to keep it from getting too complicated, you decided that instead of planning and buying each meal individually, you, your planner and buyer would do your buying in bulk based on how much gross food weight each family member was expected to consume each week, by time of day (morning, midday and evening) depending on their sex and age.
Every May, the food suppliers would put on presentations to show you what they could sell you in the upcoming year, and then you and your food agents would spend a month or two negotiating the amount of your budget and price that each grocer would get for the next year.
This made buying food for your family pretty easy, and very certain. Lots of work for a month or two, but then 10 months of just sailing along. Of course, your family didn’t always like what they had to eat, with lots and lots of the same meat, potatoes and frozen vegetables every day, day in and day out.
And your kids were always complaining their digital friends’ families down the street would buy or get delivered custom meals with different foods every day, but that meant those families actually had to plan and buy weekly — still an awful lot of work. Your way had so much predictable certainty and, most importantly, always came in at one of the neighborhood’s lowest CPCs (cost per calorie) each year.
OK, so you aren’t getting a parent-of-the-year award for your meals, but at least your accountant really liked how you managed your food budget.
Then, what if you woke up one morning, right before the big May grocer presentations, to find out that everything you knew about food and eating had just changed? Every week will now have two Tuesdays but no Saturdays. Every day will have a brunch, but not breakfast or lunch. Thanksgiving just got moved from November to April. Birthday dinners will now happen every month, not just once a year. Plus, there won’t be any meat or potatoes available for the rest of the calendar year, and the only frozen vegetables will be peas and succotash.
Welcome to the world of TV advertising for many large marketers and their agencies. Everything you thought you knew about TV advertising is now out the window. Uncertainty rules.
Buying TV ads (or food) close in time to your need was unheard of. Buying the specific audiences (or food) you needed each month or week as you needed it was unheard of. Buying at each store (or network) through online comparison tools was unheard of.
What was unheard of for decades is now today’s reality. Brands seeking the predictability of TV media supply will now find it in analytic tools, not just annual deals. Brands seeking the best rate available will now find it through software-based planning, buying and optimization tools, not just in annual handshakes at galas. Brands wanting their TV advertising to become as predictable, provable and performant as their search and social ads will now have that.
Guess what? Now that you can’t buy all your food a year in advance, you might be able to have your cake — and eat it, too!
What a great analogy Dave. Bravo!
Thanks Neil! A silver lining of all of this is time spent with family, and much more time spent planning and preparing family meals ... ever an inspiration!
Yes, Dave, it's a very interesting way to simulate national TV time buying and, more specifically, the upfront portion of it.
To be fair, however, before the upfront grocery buy is made for your hypothetical family, each member---like each brand at a large national advertiser--had to decide exactly what was wanted in terms of types of meat, veggies, beverages, etc. for every meal in each upcoming quarter. These were then aggregated into a huge buy for each of the next season's quarters and once the negotiations and delivery quarantees were set in place, each item---a frozen chicken entree, a helping of rice, a beer, etc. for a certain meal was allocated to the various family members and held in storage--to be used exactly when they wanted it throughout the year. Of course there are times when the suppliers can't deliver or run out of stock, so, from time to time the deal has to be renegotiated with product substitutions--- frozen beef entrees instead of the frozen chicken for December and January, Lima beans instead of corn next April and May, etc. Meanwhile the family continues to allocate about 25% of its grocery budget for quarter by quarter buys which may reflect the changing desires of individual members--brands?----such as trying a new salad dressing or buying a different brand of soup---based on advertising or word-of-mouth endorsements---for use in particular upcoming months or even weeks. This is sort of a "scatter" approach to food shopping in combination with the bulk buying that laid in lots of basic staples for the whole year to ensure that they would always be available exactly when needed.
To my way of thinking this is in some ways exactly what some families do when they buy groceries in bulk and store them in large freezers---and usually getting a discount for doing it >I believe that this is how many upfront TV advertisers rationalize the way they buy time---but they are missing a key point. Namely that buying in bulk ---at lower costs per item---results in compromises such as taking lots of stuff on a "deal basis" that you actually may not want. Hence, your freezer may always be full----probably too full---in the name of cost efficiency but as a result of having to consume all of the upfront stuff you bought individual family members do not get to experience new foods and beverages---or combinations thereoff that they might enjoy to a far greater extent----even if their cost is somewhat higher than a typical upfront price. Sadly, too many advertiser CMOs and higher ups continue to shovel lots of good and not so good stuff down their brands' throats---often equalizing CPMs to make the not so good stuff palatable, without ever considering whether there is a better way. There is.
Nope, not one iota comparable.
Ed, great points about the lack of alignment issues between the corporate CMO's (food czars) and the individual brands (family members). It's a big part of the problem for sure.