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Will online kill the annual plan?

Will online kill the annual plan? Jay Friedman

Quick show of hands: How many of you use an annual marketing calendar, and maybe even break it up into six to eight periods/flights? Odds are most everyone can raise their hand to that. But does a national sandwich shop promoting a meatball sub during a six-week window in March/April make business sense, or does it just fit on a flowchart? 

There are three main reasons agencies and advertisers use annual planning. First, the broadcast market works on the upfront system. This would be a difficult force to try and defy. Second, lining up a marketing plan along the client’s fiscal year makes the challenges ahead easily mentally compartmentalized. Finally -- and maybe this is a tad taboo to say out loud -- is that it’s a way to get everyone focused on the same goal for multiple months and celebrate when something this monumental has been completed. 

The problem is that what seems organized and efficient for marketers does not necessarily line up with consumer media consumption or usage patterns. Think about planning a six-week flight for a soap brand? Personally, I use soap each and every day.

Does online really change this, or is “Will online kill the annual plan?” just another catchy title?  Imagine this. It’s August, 2004 and you’re targeting the teen market (pick your product).  You’re laying out the 2005 plan and dedicating a portion to online. Some sites work better than others, and while a new site called MySpace has been mentioned in some circles, traffic is still very low and it’s still a niche. By August, 2005, however, the search term “MySpace” will have more activity than the term “movies,” at which time dollars need to be re-planned. So, why call it an annual plan if it’s not an annual plan?

This MySpace example is extreme, although real. Media is fragmenting faster than ever, and we shouldn’t be naïve enough to believe this won’t happen to us again. How many of us had mobile, in-game, or RSS on our radars a year or two ago? The consumer doesn’t wait until our next marketing window to use new technology, so we need be able to adapt at the same pace they do. The good news is that we don’t need to throw out the current system, it just needs to be modified. Here are some simple steps to implementing a workable system that balances the need for planning with the need to avoid total chaos.

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Marketing goals, not media goals
So many marketers start the planning process by first wanting to know the budget and then subsequently determining how much of that budget will be required to achieve certain media weight(s); for instance, “we need to be on TV at least 42 weeks at 200 TRPs per week.” Without determining what the brand’s marketing goals are, such as increasing product awareness by 12 percent, or creating 20 percent trial among moms with children under 6, most of the budget is already spent!

Starting with marketing goals that match up with consumer behavior will drive a much more successful media plan than one that requires reverse engineering. Again, those who started the network upfront don’t want advertisers to start with advertiser’s goals, they trained agencies to start with their goals -- budgets.

Keep planning and budgeting separate
Often we treat planning and budgeting like a stepladder, each needing to be planned together rung by rung. The fact is, the marketing budget in most companies is what it is, regardless of marketing objectives. So then, what’s the point in trying to buy broadcast primetime a year out when we have no idea what shows will be hits, or on which stations they’ll run? Why lay in an upfront with a major portal when the online world changes daily and there could be a far better solution before next year even begins? Establish your marketing goals, determine the appropriate budget that can generate ROI when those goals are met and keep the planning separate.

Don’t plan more than a quarter out
Gasp! Common objections will be that planners and buyers will spend an unnecessary amount of their time doing what could have done in the upfront during the year prior. Ask any planner or buyer and they’ll tell you that they spend significantly more time revising the original plan than they would spend creating a new plan every three months that is right the first time. Media options and consumer behavior now change so quickly that to plan more than a quarter in advance is handicapping to a marketing plan. 

But what about those fantastic rates secured by planning a year (or more) in advance? It’s often said that buying last minute can cost 30 percent or more than when buying further in advance. This may be true, but there are two problems with this argument. First, no one is suggesting the buy be made last minute: 90 days out is plenty of time to secure great rates in any medium. Second, how much efficiency is lost in placing an upfront with publishers, stations or properties that might not be the right ones to use when the time comes? In this case, well more than 30 percent of the efficiency can be lost or, worse, we’re back to square one by re-planning those dollars and paying the premiums on which this counter-argument stands in the first place!

Create a strong understanding with upper management
One unfortunate reason annual plans are done is that if any money appears “unspent” going into the new year, another department will reach out and claim it. This is ridiculous. Marketing needs to develop a strong understanding with upper management that this money is most certainly not unspent, but simply waiting to be allocated in the most efficient manner so that the company changes consumer behavior in such a way to achieve the strongest ROI. To use a football analogy, have you ever seen a football game where the losing team seems to keep running the football up the middle without regard for the fact that it’s not working? Some of the most prolific and successful teams over the last two decades had 15-20 planned plays, then everything else was developed during the course of competition to leverage changing game dynamics.

Such a wholesale change in approach won’t occur overnight, and that’s OK. Even small steps toward marketing-based objectives with consumer behavior-driven marketing will provide your company a significant advantage over the annual planners who are often simply mistaking motion for progress.

Jay Friedman is president of Goodway 2.0 Read full bio.

Jay Friedman is COO of Goodway Group, and a partner in the 3rd-generation family company founded by Milton Wolk in 1929. Friedman joined in 2006 to add a digital media component to Goodway’s offerings, beyond the existing print and promotional...

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