The document discusses the business of media planning and buying. It notes that the estimated marketing communications spend in 2009 was $776 billion, with advertising making up 24% of that spend. It outlines trends in advertising spending by media type from 1990 to 2010. It describes the key players in media - advertisers, agencies, and media owners. It provides an overview of typical agency media department structures and roles, including planning, buying, new media, and research. It also discusses media service firms, agency compensation models, and common entry-level jobs in media planning, buying, and sales.

1. The Business of Media
CHAPTER 2
Media Planning & Buying in the 21st Century

2. Agenda
SIZE OF BUSINESS
TRENDS
AGENCY COMPENSATION
THE PLAYERS: ADVERTISERS, AGENCIES, MEDIA
AGENCY MEDIA DEPARTMENT
MEDIA PROFESSIONALS – EXAMPLES
JOBS IN MEDIA
Media Planning & Buying in the 21st Century

3. $776 Billion Business
Estimated Marketing Communications Spend,
2009
Other
14%
Promotion
40%
Avertising
24%
Direct
22%
Media Planning & Buying in the 21st Century

4. Ad Spending Trends
160
(Billion)
140
120
OOH
Internet
Magazines
Newspapers
Radio
Television
100
80
60
40
20
0
1990
Media Planning & Buying in the 21st Century
2009
2010E

5. The Media Players
Agencies
The Media
Media Planning & Buying in the 21st Century
Advertiser

6. The Players
 Agencies*
 Develops media strategies & plans
 Executes the plan/buys media
 Advertisers
 Provides input/direction to agencies
 Approve media strategy and plans
 Approve budgets and expenditures
 The Media
 Suppliers of time and space
 Media are businesses like any other
 Mission is to maximize sales and profit
*Includes full service agencies and media buying services
Media Planning & Buying in the 21st Century

7. Typical Media Department
Media Director
Planning
Groups
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Associate
Media Directors
Supervisors
Planners
Assistants
Buying
Groups
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Director
Supervisors
Buyers
Assistants
Estimators
Media Planning & Buying in the 21st Century
New
Media
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Director
Specialists
Media
Research
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Director
Supervisors
Analysts

8. Media Service Firms
 Client alternative to agency media department
 Media Planning
 Media Buying
 Coordination of multiple brands
 Sizes range from one person freelance operations to
billions in billing
 Examples
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Initiative Media (owned by Interpublic)
Media Period (small staff, local clients)
Media Planning & Buying in the 21st Century

9. Agency Compensation
 Historically, media have paid agencies a 15% commission on media billings;
compensation for production expenditures is based on a separate agreement.
Billing
Commission
Revenue
$1,000,000
x 15%
$150,000
 More recently, to save money, clients have been reducing agency
commissions to as low as 10% or less and/or negotiating a fee arrangement
with the agency
 Currently, there is a movement among some agencies to advocate pay for
performance.

Raises issue of defining performance, results and measurement
 Over half of agency revenues are spent on people
Media Planning & Buying in the 21st Century

10. Media Planner Function
 Media Planner - generic term describing function;
planners may be at any level in organization
 Planners develop strategic media plans for one or
more clients
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Marketing analysis
Translate marketing situation into media implications
Define target markets
Define geographic & timing priorities
Select media
Recommend budgets
Serve as member of agency brand team for client
Media Planning & Buying in the 21st Century

11. Role of Media Planners
 Role changing from traditional media planners to
communications planners
 New skills needed:
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Marketing Strategy/Planning
IMC
All Media
New metrics
Engagement Experts
Optimization
Media Planning & Buying in the 21st Century

12. Media Buyer Function
 May be at any level in organization
 Buyers negotiate terms and conditions of media buys
for clients
 Buyers are often specialists in buying:

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Network television
National cable
Spot television & radio
Digital/internet
Newspapers
Outdoor
Media Planning & Buying in the 21st Century

13. Media Research Function
 The role of media research department is to support
the planning and buying groups with media research
expertise
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Evaluate methodologies, e.g. for magazine audience
measurement or C3 ratings
Recommend which services to buy, e.g., MRI vs. SMRB
Develop analytical techniques
Media optimization modeling
Media Planning & Buying in the 21st Century

14. Media Sales
Sales Rep Firms
Media Sales Staff
 Typical Media Sales Staff
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National Sales Manager
Regional Sales Managers
Major Market Sales Manager
Sales Representatives
Research/Presentation
Support
Sales Planning & Calls
Media Planning & Buying in the 21st Century
 Media often hire “Rep
Firms” to extend their
internal sales staffs
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Large & Small Firms
Usually Regional or in
Certain Major Markets
Sales Managers & Reps
Sales Planning & Calls

15. Majority of Entry Jobs are in Media
 Planning
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Research Assistant
Digital Planning
Account coordinator
Assistant Media Planner
Media Planner
Social Media
 Buying
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Assistant Buyer
Spot TV/radio Buyer
Online Buyer
 Sales
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Sales Assistant
Sales Representative
Marketing support (develop sales presentations, etc.)
Media Planning & Buying in the 21st Century