By Duane Sprague

“The only thing more expensive than hiring a professional, is doing it yourself”

How We Buy TV to Save You 15-25%:

1. We can purchase the same or a better schedule than you currently run for 15-25% LESS than you currently pay. We negotiate every spot, every dollar, every value-added opportunity and every bonus opportunity available. We are tenacious professional negotiators who have obtained discounts up to 73% off rate card on network TV! We have obtained Cable TV at 68¢ per spot, vs. the rate card of $6.00.
   
2. We make sure your spots are airing in the best programs and on the best stations for your target audience and your budget.
   
3. We will make sure your schedule is getting at least a 3 weekly frequency to be effective.
   
4. We can get you more free or bonus spots than you currently get. We average a 20-40% bonus ratio (the ratio of free spots to paid spots). This increases your frequency and reach, and reduces your cost per rating point. Nobody gets the bonus schedule we do.
   
5. We can get you better vertical and horizontal rotation on your broad rotators. (Vertical rotation is throughout the day i.e. 6 a.m. to 12 midnight. Horizontal rotation is each day of the week. A Broad rotator is a spot that runs at a very low rate in a specific day, daypart, or as a bonus spot).
   
6. We can ensure that your spots air “in-program” a majority of the time. (Commercials that run in “adjacency” positions, are airing in-between programs, not inside the program. Adjacencies have the lowest viewer-ship, and the lowest rating points).
   
7. We can ensure that your spots have a fair rotation as the first spot in the break or pod position. (The first spot in the break or pod is the most watched and valuable).
   
8. We can ensure that your spots have a fair rotation in the first quarter hour of the program. (The first quarter hour is the most watched, and has the highest rating points).
   
9. We will audit your media invoices to ensure that your schedule ran as placed, and that you received the negotiated bonus schedule, rotation, and break positioning. We also audit your invoice against the actual “Nielsen Overnight Report” to ensure that your spots received the projected rating points.
   
10. We can put together a joint promotional campaign that provides you with additional free media exposure. One such campaign we did allowed our client to receive $500,000 in advertising for a $35,000 investment in the promotion.

How We Buy Radio to Save You 15-25%:

1. We can purchase the same or a better schedule than you currently run for 15-25% LESS than you currently pay.
   
2. We can get you more free or bonus spots than you currently get. We average a 20-40% bonus ratio (the ratio of free spots to paid spots).
   
3. We will ensure that you are receiving a 3 weekly frequency to be effective.
   
4. We will ensure that your spots are on the best stations for your target audience and budget.
   
5. We can get you better vertical and horizontal rotation on your broad rotators. (Vertical rotation is throughout the day i.e. 6 a.m. to 12 midnight. Horizontal rotation is each day of the week. A Broad rotator is a spot that runs at a very low rate in a specific day, daypart, or as a bonus spot).
   
6. We can ensure that your spots have a fair rotation as the first spot in the break or pod position. (The first spot in the break or pod is the most listened to).
   
7. We will audit your media invoices to ensure that your schedule ran as placed, and that you received the negotiated bonus schedule, rotation, and break positioning. We also audit your invoice against the actual “Arbitron Ratings” to ensure that your spots received the projected rating points.
   
8. We will get the maximum amount of “value added” available. (Value added can include free logo links on the stations web site, free live remotes, or cost of talent only for live remotes, free prizes to give away, free sponsorship of station contests and events, free or discounted live mentions or 10 second recorded spots etc).
   
9. We will research the stations that have the highest potential for “active listeners” and “time spent listening.” (AM stations typically have the most “active listeners”).
   
10. We can put together a joint promotional campaign that provides you with additional free media exposure. One such campaign we did allowed our client to receive $500,000 in advertising for a $35,000 investment in the promotion.

Those individuals and ad agencies who are not trained experts in the “Power Media Buying” strategies of media placement and negotiating (developed by Duane Sprague), will always leave between 15% and 25% of the advertising budget on the table. This occurs on a regular basis in several ways:

1. They will pay more per spot and per rating point than they should. Simply because they do not spend the time and energy to negotiate the bottom dollar price and the best placement of every spot.
   
2. hey will buy too much of the wrong programs and time slots, and not enough of the right times, stations and programs for their ideal demographic audience. They simply do not take the time to dissect every detail of every daypart on every station.
   
3. They will not negotiate enough value-added advertising. They do not know what is available to negotiate, and they don’t know how to negotiate it.
   
4. They will not pursue free promotional opportunities. They don’t know how they work, and how to negotiate it, and what elements to negotiate on.
   
5. They will not buy enough frequency to be effective. Most buyers pursue broad reach to satisfy their media reps, at the sacrifice of frequency.
   
6. They will buy station “packages” that look attractive, but do not provide the lowest cost per point, adequate frequency, or reach the ideal targeted demographic audience.
   
7. They will buy based on relationships, and not based entirely on quantifiable analysis and cost efficiency.
   
8. They will make quick decisions based on convenience and time constraints.
   
9. They will buy based on previous commitments and contracts, not based on what is best for the client or application right now.
   
10. They will buy broad rotators that do not deliver the rating points expected.
    
11. They will not audit each and every media invoice to determine actual rating point delivery in the actual quarter hour in which the spot ran.
    
12. They will not negotiate pod or break positions for maximum impact.
    
13. They will not negotiate or monitor even vertical and horizontal rotation.
    
14. They will not negotiate spot separation.
    
15. They will not meet with the traffic department to ensure they understand the negotiated scheduling.
    
16. They do not hold the station accountable for the schedule, the delivered rating points, the rotation, the pod positioning, and the make-goods.
    
17. They do not negotiate a minimum level of bonus spots.
    
18. They do not demand or receive make-goods, nor do they monitor them if they do.
    
19. They buy based on incentive trips for themselves, not what is in the best interest of the client.
    
    

Glossary of Media Terms

Rating Point: A rating point equals 1% of the total audience or population who is consuming the medium (TV or radio) at that moment. For example, there are 1,000,000 people in the market area, and 400,000 are watching TV at that moment, and of the 400,000 watching TV 30,000 are watching “Friends” at the moment. Friends would have a 7.5 rating because 7.5% of the entire TV audience of 400,000 are watching Friends. Rating points are expressed as numbers, but they represent a percentage even though the % sign is never shown.

Average Quarter Hour Rating: The rating points for the quarter hour within the program. News and late night talk shows always have much higher ratings in the first quarter hour. However, the vast majority of local advertising goes in the last quarter hour of the news.

Cost Per Rating Point: Expressed as “cost per point” or CPP. CPP is the cost of the spot divided by the projected rating points the program it’s running in will deliver. For example, if the cost of a 30 second spot in CSI is $800, and CSI averages a 6 rating, the cost per point is $133.33. ($800 divided by 6).

Why Ad Agencies Don’t Make The Best Media Buys, And Why “Volume Buying Power” Does Not Equate To Client Savings

1. Agencies typically work on a 15% commission of the total media buy. A heavily negotiated cost savings for the client would therefore reduce their own commissionable income. Not to mention consume a great deal of their time. The best media buys are very time consuming to plan, negotiate, audit, and re-negotiate.
   
2. They see themselves as “media buyers” instead of “idea sellers.” In order to really get the very best buy, the buyer actually has to become a seller of their ideas, rates, and strategies to the media sales rep. The media buyer must in fact turn the tables, and sell harder than the media rep.
   
3. They typically buy and negotiate over the phone instead of in person. This is the worst possible way to negotiate a media buy.
   
4. The average media buyer is not trained in the fine art of professional negotiating skills. Nor do they have a background in sales. So how are they going to sell their ideas, and negotiate a killer deal to the last fraction of a rating point?
   
5. They make annual buys out of convenience and timesavings for themselves. And justify it to the client by saying that it saves them money. When in fact, the primary benefit to an annual buy is to guarantee placement. And the only way to guarantee placement is to pay a higher, non-preemptable rate.
   
6. They don’t ever drive the billboards they are buying or negotiating on. If they did, their clients would not be on a sizable percentage of the boards, and their vinyl would be in better condition.
   
7. They typically make media budget allocation decisions based on a national formula that does not allow for local market conditions and anomalies. (Salt Lake City for example has only a 53% cable penetration compared to the 79% national average). Unless you can steal it, I do not recommend cable in any market with less than a 70% penetration.
   
8. The media buyers in an agency are some of the lowest paid, least trained, least educated, and least respected in the company. And consequently they have the highest turnover of any position in the agency. The vast majority of top agency executives are promoted from Account Executive positions, and a few from creative, but virtually never from the media-buying department. Since media buyers are in a dead-end job, with low pay, no incentives, relatively high turnover, little training and little respect, how good of job do you expect them to do? What is their incentive?
   
9. Smaller and local agencies many times make media buying decisions based on incentive trips for themselves, and not what is in the best interest for the client.
   
10. The smaller agencies may also make a package media buy that is beneficial to one client, and detrimental to another. For example, they may commit to buying $500,000 on a particular network or cable system for the entire year, in order to get a better rate and qualify for a big trip. They will then place all their collective clients ads on that particular network. However, that particular network may not contain the best audience composition, or reach the best geographic market area, or offer the lowest cost per point or cost per thousand for the entire client base.
    Another game they will play, is to buy a huge block of time on a network or station in order to please their biggest client with better rates. And then force their smaller clients onto that station in order to fulfill their contract obligations.
    
11. In short, agencies that work on a commission basis are typically self-serving, and will never look out for the best interests of their clients, or look for every opportunity to save their clients as much money as possible. Why? Because squeezing every last dollar in additional value for the client is time consuming, tedious, and requires a great deal of skill and experience. Why should they bother?
    
12. The media buyers are typically the most removed from the client, and have the least understanding of their budget, history, objectives, competitive pressures, market conditions, USP, etc.
    
13. With the large agencies, all the media buying is typically concentrated in one office in one city. How much does someone in Denver or Chicago really know about Modesto California or Wilkes-Barre Pennsylvania in terms of local media market conditions and opportunities? Unless of course they perform their due diligence and spend a few days in the local market to uncover the nuances, and meet face to face with the local media reps.
    
14. The other built-in problem with agencies is that they are typically egotistical creative shops driven to produce ultra creative cutesy commercials to win awards and gain recognition from their peers. The problem is, that the most creative award winning commercials have almost always been the biggest failures in terms of generating sales and results for their clients. In fact, almost every agency that won an award for their clients commercial, lost the client within a year due to lack of ROI. Creative does not sell product. Effective communication to the right audience delivered consistently over time does.
    
15. Another reason agencies put so much pressure and emphasis on super slick and ultra creative commercials recorded on film instead of digital video (which when done properly by people who know how to use the equipment, can produce the same or better quality as film, at a fraction of the cost), is because they typically mark-up all production by 18%. And obviously they stand to make a lot more on a $30,000 commercial as they would on a $5,000 spot.
    
16. The media buyers in an agency are not trained in high-level negotiation skills, sales techniques, communication skills, marketing concepts, promotions, or the basic principals of advertising. So how in the world are they supposed to have a solid understanding or skill base in which to effectively do their job?
    
17. Agency Account Executives spend too much time and resources on “client relations” and not enough time on research, negotiations, tracking, and working for the good of the clients advertising budget. By the way, who do you think really pays for all those lunches, golf outings, event tickets, and other gifts? You do of course.

Contact Duane Sprague or Wayne Darois at 888-265-1963 or email dsprague@dunningsprague.com