UNIT – IV MEDIA BUDGETING, BUYING AND SCHEDULING

MEDIA BUDGETING

Definition:

A Media budget is an estimate of a company's promotional expenditures over a certain time

period. More importantly, it is the money a company is willing to set aside to accomplish its
marketing objectives.

Companies' expenditures on print, broadcast and other forms of advertising rely on the funds in
their media budgets. Media buyers specialize in wringing the best array of exposures for brands
and products out of their clients' media allocations. Buyers' efforts drive down the cost of each
TV or radio spot, newspaper or magazine ad, billboard, transit ad or any other pay-to-play
placement, maximizing advertising impressions and effectiveness. New media options take their
places in the 21st-century media budget, expanding brands online.

Factors to be consider while framing advertising budget

Following   are   the   factors   that  are  considered in determining the advertising budget.

 1)  Corporate objectives:

Using the  objective  task  method,  linkage  between advertising  expenditure  and corporate   
objective   will   be   established.   The   advertising   expenditure   varies depending upon
corporate philosophy and priorities. For example in  India, we find  that  public sector
corporations such as  BEST  or the  Mahanagar Telephone Nigam  Ltd  spend  less  on
advertising  than  private  sector  companies  such  as Reliance Industries or Tata Industries.

 2)  The product Life Cycle:

This has a very important influence on the ad budget and companies use the brand history
method for deciding how to spend on the product.

 3)  The budgeting   period:

Usually  companies  have  a  yearly  budget  but  some  may  prepare  long  term budget that
match the long-term objectives.

 4)  The competitors  strategies:

Product categories, which  have stiff competition,  witness  a  greater expenditure on

advertising. For example, in India television  manufacturers  spend more than the  manufacturer
of  ear  buds.(manufactured  mainly  by  Johnson  &  Johnson  ). When  competitors  increase
their  advertising  expenditure  others  are  forced  to follow them.
 5)  Affordability:

While the affordability level depends upon the advertisers priorities ceilings on how much to
spend is fixed by the advertisers in order to avoid overspending.

 6)  Crisis management:

Even  the  best-laid  plans  can  be  affected  by  the  changes  in  the  marketplace. Advertisers
have  to  keep  aside  contingency  funds  that  can  be  used  to  tackle unexpected market
challenges.

 7)  The type of product:

Consumer  products  need  more  advertising  than  industrial  products.  Among consumer
products shopping items such as toothpaste, shampoo and soaps need to  be  advertised
consistently  in  order  to  maintain  their  brand  position.  Such products will have a higher
budget appropriation.

 8)  Importance  of middlemen:

In  product  categories  where  middlemen  or retailers  have  to  push  the product, manufacturers
may prefer to spend more on dealer commission than advertising. For  example Sumeet washing
machines and kitchen  mixers and food processors are not advertised heavily. This is because the
brand name Sumeet is familiar to consumers   who  have  accepted  the  product  image  of
quality  and  after  sales service. The company prefers to use retailers to push the brand. In most
common durables such as  televisions, VCRs, microwave ovens and so on, the influence of
retailers  is  very   strong.  Unlike  impulse  purchase  products  such  as  chewing gums,
chocolate and ice cream, which therefore use more of advertising.

 9)  Scope  of the market:

If the advertiser  wants  to approach  the national market his  budget has to  be much more than
that required for local or regional market.

 10) The quality of the campaign:

When   the  advertising   campaign  is  striking  and  is  unusually   creative,  it  is immediately
noticed  by consumers. In  this case the advertisers  need not spend on  buying media, time and
space. To compensate  on poor quality campaign an advertiser  may have to spend more on
media, in order to enjoy the same degree of visibility. For  example the Cherry Blossom  ad,
which used a Charlie Chaplin look   alike,   was   a   striking   television   commercial   that   
immediately   gained attention.

ADVERTISING TASK
Advertising has three primary objectives: to inform, to persuade, and to remind. Informative
Advertising creates awareness of brands, products, services, and ideas. It announces new
products and programs and can educate people about the attributes and benefits of new or
established products.

Tasks of advertising:

 Promotion of Sales: ...

 Introduction of New Products: ...
 Support to Production System: ...
 Increasing Standard of Living: ...
 Public Image: ...
 Support to Media: ...
 Benefits to Manufacturers and Traders: ...
 Benefits to Customers:

Competitive framework in advertising and media budget

Competitive framework also involves

 Market dominance
 Market coverage
 Media cost
  Market task
 s
 Frequency of purchase

Market Dominance:

Market dominance is a measure of the strength of a brand, product, service, or firm, relative to
competitive offerings, exemplified by controlling a large proportion of the power in a particular
market.

Market coverage:

Market coverage is the evaluation of the marketplace and determination of how much of it you
should cover with your promotional strategy of a product or business. Companies have to take
into account factors like the economy, culture, buyer behavior, etc.

Media Cost

The cost of all impressions, clicks, and activities during the specified date range, based on the
schedule and pricing information that was entered for each placement. If you view data for only
part of the placement's date range, reports will show media cost information for those dates,
based on the cost structure and delivery information. Any impressions, clicks, or activities that
occur outside the run dates of the placement are not included in media cost calculations.

The cost structure is used to determine how the cost is calculated:

Cost structure Formula

(Impressions ÷ 1000) × Rate
CPM (cost per thousand impressions) The advertiser is charged for every thousand
impressions served.
(Active View: Viewable Impressions ÷ 1000) × Rate
CPM - Active View (cost per thousand
The advertiser is charged for every thousand
viewable impressions - Active View)
impressions measured as viewable by Active View.
Clicks × Rate
CPC (cost per click) The advertiser is charged every time a creative is
clicked on.
Activities × Rate
CPA (cost per activity) The advertiser is charged every time a user performs
the selected activity.
(Impressions ÷ 1000) × Rate
Flat Rate - Impressions
Once the booked number of impressions is reached,
no additional cost accrues.
Flat Rate - Clicks Clicks × Rate
 Once the booked number of clicks is reached, no
additional cost accrues.

Market task:

They involve deciding policy, strategy, tactics, procedures, rules and regulations and marketing
programs, budgets and schedules to achieve the long-term as well as short-term goals.
Marketing strategies and plans allocate economic, physical and managerial resources of the
organization for future.

Pricing:

Competitive pricing is a strategy which helps businesses attract more customers by optimizing
prices using competitor product and pricing data. A successful pricing strategy can significantly
increase sales, result in better cooperation with suppliers, and boost revenue.

Frequency of Purchase:

Purchase Frequency is the number of times that a customer makes a purchase in a given period
of time. In research, understanding how often a consumer purchases within a given category
gives a sense of their engagement.

IMPORTANCE OF MEDIA BUDGET

The objective of a company which markets its products is to earn profits and increase brand
awareness. Advertising objectives of a company is purely dependent on the advertising
campaign, type of customers, advertising media and what the company wants to achieve. Hence,
for any marketing activity that a company wants to do, it has to spend some money. This is why
advertising budget is important. It helps in understanding the objectives. the costs, helps to
formulate strategies and generate profits by increasing the overall sales.

METHODS OF SETTING MEDIA BUDGET

Several methods are used for setting advertising budget. Depending upon internal situations of
the company, the suitable method is followed. Every method has its merits, demerits, and
applicability.

Commonly practiced methods have been briefly discussed in this part:

Status Quo:

Status quo strategy is an approach under which a business keeps things as they are by not
trying to capture more market share and thus avoiding confrontation with its competitors which
is both risky and costly.
Inflation Adjusted Method

Inflation-adjusted spending on branded direct-to-consumer advertising, 1995 to ... of and

spending prescription-only broadcast within media.

Advertising Sales or Percentage of Sales Method

The percentage-of-sales method is used to develop a budgeted set of financial statements. Each
historical expense is converted into a percentage of net sales, and these percentages are then
applied to the forecasted sales level in the budget period.

Case Rate and Advertising Margin Method

In the marginal analysis and S-shaped curve approaches increase in advertisement budgets may
lead to increases in sales. In other words the advertisement budget can be considered as an
investment.

Share of Market

In case of multi location and multi product line firms, a total amount is decided as advertising
and each strategic business unit receives a share according to their needs. This method helps the
group to segregate some amount for corporate group advertising for building the image of the
organization.

Yardstick Method:

Yardstick method is an approach in which the company or business entities use in estimating the
new operation challenges or damages, mainly through performance comparable guidelines for
example the damages experienced in an agreement breaching.

Effective Reach and Frequency Methods

Effective reach delivers the maximum number of targeted individuals for exposure to the brand
message. Efficient reach does so economically, often expressed in a cost per thousand (CPM),
CPL (cost per lead) and CPS (cost per sale).

Reach delivers the audience while frequency repeatedly exposes the audience to the brand
message, offer, promotion, etc. How many exposures is enough (or too much) is often the
question, since there is obvious budgetary waste for buying too many ads with diminishing
effectiveness.

Marginal Analysis Approach

Such analysis may be used for advertising budget decision. The allocation procedure is to
increase advertising expenditure until each rupee of advertising expense is matched by an
additional dollar of profit. This marginal analysis results in the maximization of the
productivity.
ROI Approach

In the ROI budgeting method, advertising and promotions are considered investments, like plant
and equipment. In other words investments in advertisements lead to certain returns. Like other
aspects of the firm’s efforts, advertising and promotion are expected to earn a certain return.

Experimental Approach

In the experimental method varying advertising expenditures are used in different cities.

Break-Even Planning

To calculate break-even point based on units: Divide fixed costs by the revenue per unit minus
the variable cost per unit. The fixed costs are those that do not change regardless of units are
sold. The revenue is the price for which you're selling the product minus the variable costs, like
labour and materials.

MEDIA BUYING

Meaning:

Media buying is the process of identifying and pruchasing ad space on relevant media channels
at the optimal time and cost.

Role of Media Buyer

A media buyer is a person who places and negotiates the price of all the ads on different media.
This media can be television, print, radio, or digital. They ensure that the ads are placed on
relevant and favorite sites. They have to consider the length and size of the placement of the ad
on the website.

Media buyers negotiate the price of and purchase television and radio air time, and advertising
space within newspapers, magazines and other print publications. Typical responsibilities of the
job include: negotiating the best price, quality and placement of advertisements.

Objectives of Media Buying

The goals of buying media are to take your ad creatives and get them in front of your target
audience in the right context at the right times and in the best formats — the result should be a
successful ad campaign. How you measure success will depend on your goal. Maybe it’s to
improve brand awareness or increase conversion rates. Whatever the case, strategic media
buying can help you get there. 

Think of media buyer agencies as real estate agents. Newspapers, television networks, radio
stations, social media sites, online magazines, and more are all types of real estate. Media buyers
find the best properties for you and negotiate to buy these properties. Instead of building
apartment buildings or houses, you’re building your brand. 

The Media Buying Process

The media buying process can be broken down into a few key steps:

1. Strategizing: Most of the strategizing that goes into an ad campaign is part of the media
planning, rather than the media buying process. However, media buying strategies are also
critical for success. Media buyers must determine the best path forward for delivering great
results within the budget they have. They may determine the general mix of media types they will
go after and other details of their plan before taking action.
2. Identifying the best media outlets: Once media buyers have a game plan to work with, they can
begin to put their plan into action. The first step is to identify the various media platforms they
would like to advertise on. This could include a mixture of traditional media — like print, radio,
or television — along with digital media, or it could be focused solely on digital platforms. The
media buyer will send a request for proposal to each of the media outlets they want to work with.
3. Negotiating and buying: Next, media buyers negotiate with the media outlets to determine the
best price before officially purchasing the ad space. In the case of online advertising, much of this
process is automated and doesn’t involve traditional negotiations. Still, media buyers must make
strategic decisions that will result in your ads running in the best places, at the best times, and for
the best price.
4. Launching the campaign: Next comes the campaign launch — this is where your ads begin to
appear in various places based on the media buyer’s decisions. The media buying company
should immediately start evaluating the campaign to make sure your ads are performing as they
should.
5. Monitoring and optimizing results: As the campaign continues, media buyers should continue
to monitor results, so they can optimize your campaign. They may have to make some
adjustments once data starts coming in to ensure the best results possible within your budget.
Detecting problems early and finding better ways of getting your message heard is critical to the
buying process.

MEDIA BUYING BRIEF:

Media Buying Brief means the document provided to the Supplier which details the requirements
for a campaign.

Environmental Analysis:

Environmental analysis is a strategic tool. It is a process to identify all the external and internal
elements, which can affect the organization's performance. The analysis entails assessing the
level of threat or opportunity the factors might present. ... The analysis helps align strategies
with the firm's environment.

Science and Art of Buying

Media buying is both a science and an art form. Media research resources and software programs
provide valuable data about your target market’s demographic and behavioral traits. They also
offer insight into the viewing habits of consumers in Designated Market Areas (DMAs).
Analyzing and synthesizing this data is the science behind the media buying process. But when
all information is compiled and pieced together, the art of determining the best media options for
reaching your target market begins.

Benchmarking buying plan of presentation:

Benchmarking is a form of variance analysis and is the practice of comparing the performance of
products, processes, and financials to that of other internal, competitive or industry performance,
to understand the improvement potential or relative performance of the benchmarked products,
processes or financials.

Deal Management and Post Buy

The deal management process can be very complex with various trading agreements and many
departments involved. The deal management process is a series of actions that will guide you
through each stage as you develop an effective way to handle each deal and see them through to
their conclusion. It’s important that you understand each stage of the deal management process
so you can know what to expect and ensure optimal deal management. Businesses often make
use of a deal management system to streamline their processes and claimed on missed rebates.

Media Buying Brief Elements

Now let’s dive into a few key pieces of information your creative brief should include and
questions it should answer.

1. Describe your company

Provide context and background information on your company to help the designer or creative
team get a better understanding of your business. Who are you and what services and/or products
do you offer? Include links to your website and any other background material that might be
helpful.

2. Summarize the project

What is the project? And why do you need it? Do you need a corporate identity kit for your new
company? Are you refreshing your company’s Facebook and Twitter pages for a new season?
Describe what the project is, what it entails, and why you’re doing it.

3. Explain your objectives

This is probably the most important part of the brief, and it’s essential that you think through
your strategy and objectives completely before you get the project underway. Why do you need
this project? What are you hoping to achieve with it? What are your goals? Is there a problem
you’re trying to solve? How will you measure success? For example, if you’re developing an
eBook, you might measure success by the number of downloads. These details will help the
designer understand your goals and come up with solutions that address them.

4. Define your target audience

Who’s your customer? Who are you trying to reach with this project or campaign? Share
demographic information about who they are and any behavioral insights you may have on them.

5. Outline the deliverables you need

Do you need a one-page brochure? A batch of 10 banner ads? A logo for print, just for the web,
or for both? Be sure to include the file formats you need (i.e., JPG, PNG, PSD), size information
(i.e., 300×250 pixels), and any other important details needed to deliver the right assets.  

6. Identify your competition

Who are your competitors? You may want to include an overview of the competitive landscape
and any trends or market conditions impacting your industry. For this project, what are your
competitors doing as a point of comparison and as a point of differentiation? For example, if
you’re refreshing your logo, what types of logos and colors do your competitors use? These
details can greatly help inform the direction the designer will go in (they’ll do additional research
as well). You can also include a few examples of designs you like or don’t like.

7. Include details on the tone, message, and style

The style and tone should be consistent with your brand and will also hinge on what the project
is, what you’re trying to achieve, and what action you want your customers to take. To help
inform the messaging and ensure it aligns with your objectives, be sure to include your strategic
positioning and the key messages that need to be addressed. For example, if you’re creating a
landing page for a contest, you’d probably want the messaging and design to be lively and fun to
inspire people to enter. If you’re developing an annual report, you’d most likely want something
that looks and sounds more formal and professional to instill trust and confidence. If you have a
brand style guide or examples of past campaigns or related projects, be sure to share them with
your designer. And also provide any other factors or requirements that might affect the creative
direction.

8. Provide the timing

If you have a timeline in mind for your project, include it in the brief. During your kickoff
meeting or initial conversations with your designer, make sure to discuss the timeline and agree
upon a completion date. It’s also a good idea to talk about the overall creative process and
discuss if edits and how many rounds of them are possible and whether or not they’re included if
it’s a fixed-price contract.  
9. Specify your budget

If you have a set budget for the project (which is often the case), include it in the brief and
discuss it with your designer. If the designer’s estimate exceeds your budget, talk it over and
agree upon realistic expectations, deliverables, and project costs before getting started.

10. List the key stakeholders

If other people on your team or within your organization need to be included in the review
process, provide their contact information. You can also include how you’d like to receive
deliverables and provide feedback. On Upwork, the Messages tool makes it easy to communicate
and share files.

NEGOTIATING MEDIA BUYING

As media buyers, we have learned a trick or two over the years about getting the best media
deals possible for our clients. And, while it will always be easier for professional media buyers to
get these deals (after all, we’ve spent years nurturing relationships with media reps and
publishers), there are some things CMOs can do to negotiate some pretty sweet deals.

Here are some tips on negotiating with media vendors to lock in the best deals:

Research First

Media reps are extremely busy people and they don’t have a lot of time to answer questions. It’s
a good idea to do some research beforehand to identify which properties and channels make the
most sense for your brand’s campaign. Why waste your time or anyone else’s reaching out to a
rep whose publication doesn’t cater to your particular demographic?

Rely on the Media Rep’s Expertise

No matter how much research you’ll do, you obviously won’t know the publication as well as
the media rep you’re working with. Depending on how long they’ve been there, they will have
learned all there is to know. So pick their brains and let them work their magic on your
campaign’s behalf.

Think Like a Professional Media Buyer

When we were just starting out years ago, we thought of each bit of contact we made with media
reps not as one-offs, but as the start of a long-term relationship. We knew the more common
courtesy we showed them, the more we made ourselves available to them, the stronger the
relationship would become and the better the deals we could get for our clients.

Play a Little Hardball

You have two goals when first meeting with a media rep: get the best deal possible, and get some
respect. You may want to jump at the very first offer they give you, but play a little hardball. It’s
a bit like haggling for a rug in Marrakesh: they will respect you more if you go through the back
and forth bartering motions.

Think Future Buys

When your rep knows that you will keep coming back for more buys, he or she will naturally
want to keep you very happy. This is why advanced renewals are generally offered at some
pretty steep discounts. And, the longer you work with the same rep, the better those discounts
can get!

Media Plan Presentation and Client Feedback 

Your media plan should let you compare media buys by their CPM, or cost per thousand. This
is the cost to reach 1,000 potential customers. If two different radio stations have different spot
prices and audience numbers, determining your CPM will allow you easily compare them
financially.

Media planning is the process by which marketers determine where, when, and how often they
will run an advertisement in order to maximize engagements and ROI. ... An effective media
plan will result in a set of advertising opportunities that target a specific audience and fit in with
the organization's marketing budget.

CRITERIA IN MEDIA BUYING

Media buying falls into the paid media category and generally means the procurement of media
space and time for displaying ad creatives. When buying media, the goal is to find the right
place, time and context to deliver relevant ads to the target audience and increase conversion
rates, sales or brand awareness.

MEDIA SCHEDULING

Definition:

Media Scheduling refers to the pattern of timing of an advertising which is represented as plots
on a flowchart on a yearly basis.

Media scheduling refers to the decision taken by media planner regarding – timing of an
advertisement, continuity of and advertisement and the size of an advertisement to be played.
Once a media planner decides media mix i.e. which all media vehicles will be used to
communicate advertising messages to the target audience, media scheduling starts. Thus, in
simple words, media scheduling deals with 2 main things – Number of advertising giving to a
selected media vehicle and frequency of the ads.

Strategies/Methods or Patterns of media scheduling

1.  Continuous scheduling

Under this strategy, an advertisement runs throughout the year with an equal amount of weight
each month. This strategy should be used if a particular product category is sold thought the year.
No external factors are considered such as seasons, events, etc. These advertisements are in the
form of reminders so that the target audience recall these brands at the time of the purchase.

Example: Shampoo’s advertisement comes throughout the year

2.  Flighting advertisement

This is when an advertisement runs for some period and then there is a gap, this means
advertisers shows a heavy advertisement for a specific period of time and no advertisement on
other time of the year. A business should use this strategy in case of seasonal products. Running
heavy advertisement in the peak purchase period results in immediate brand awareness and this
strategy also helps to fight competition.

Example: Air conditioner ads during summer

3.  Pulsing advertisement

 In this strategy, advertisers run ads throughout the year but for a specific period, there will be
more advertisements as compared to other times of the year. Pulsing advertisement is a mix of
both – Continuous and flighting advertising strategies. In strategy, the pulse means high-level
advertising during a certain period. Pulse can occur at the time of product/brand launch to
increase awareness.

Example: Launch of TATA NANO

Other Strategies:

Steady Strategy:

In this strategy the advertiser spends a fixed amount of money every month. It can be of any
amount which is been decided for the advertisement.

Step-down strategy:

Under this strategy as the season approaches there is heavy advertising. Advertising is reduce
when the season starts decaling, for example: when rainy season approaches lot of companies
gives advertisement related to rainy shoes, sandals, umbrella. Raincoats etc and the
advertisement reduce when the season starts decaling.

Teaser step-up strategy:

In this strategy advertisement starts on low scale when the season begins. As the season picks up,
slowly advertising increases & reaches its peak. For example products like a-c, fan, Air cooler
etc. advertisement starts with a low scale when the summer season begin as the season picks up
slowly advertising increase & reaches its peak.

Factors Influencing Media Scheduling

1. Type of the product

Advertisers must consider if the product category is consumed/used throughout the year or the
product/brand used is seasonal. By making this decision advertiser will understand which media
scheduling strategy works the best for the brand.

Example: Coolers and air conditioners have more demand during summer thus more
advertisements are shown during summer.

2. Introduction of the product

If there is a new product in the market then advertisers have to play more advertisements at the
time of launch to aware, educate, and persuade customers. The frequency of the advertisement
should be high at the start, once the product or the brand is popular in the market, advertisers can
decrease the frequency of a particular advertisement.

3. Type of audience

It is very important for advertisers to understand what type of media the target group is
consuming. Advertisers have to keep target media in mind and understand their likes, dislikes,
utility, and preferences. Proper demographic, psychographic, and behavioural research has to
take place for understanding different consumer profile. Once the target market is understood
media mix and scheduling strategy take place.

4. Competitors scheduling strategy

Advertisers must analyse competitors' scheduling strategy before deciding scheduling strategies
so that our product is also able to compete with that of competitors.

5. Estimation of advertising budgets

The selection of media highly depends on the advertising budget. If budget is less than you
cannot invest money in TV or Print at this stage it is ideal to spend more on running digital
campaigns, at the same time if the budget is higher than advertisers can place the advertisement
on television or print if it is effectively reaching the target audience.

Importance of Media Scheduling

Media scheduling depends upon a number of factors such as:

• The nature of product- whether it is consumer usable, durables or industrial

• The nature of sales- whether the sales is seasonal or regular

• The product lifecycle- whether the product introduction is in growth, maturity or decline

• The pattern of competitor’s programs

• The entry of new competitors in the market

• The availability of funds for advertising and marketing campaigns