Still using panel-based media planning? Well, habits can be hard to break. But more importantly, they can also be very costly. With precise audience targeting now available, tools like Nielsen's @plan, comScore's Media Planner, and others no longer make (fiscal) sense.
Some media agencies use panel-based planning to find the best sites to reach an advertiser's target audience. The planner inserts a desired audience characteristic -- let's say, females aged 18 to 34 with bachelor's degrees -- and gets a list of sites sorted in order of recommendation. After reviewing each publisher's reach, the planner selects a combination of sites that will provide good reach with a high composition of the target audience.
But, looking closely at the numbers, you can see inherent problems in such an approach; the biggest one being audience skews -- the top sites on the list skew only toward the requested audience.
Using one of the leading panel-method tools, Legolas Media created a test media plan to reach the 18 to 34 year-old females with bachelor's degrees. Seven publishers ended up on the final list, and the bottom line was shocking: Out of 100 million impressions, 70 percent were delivered to the wrong audience. Or, to put it another way: Based on an average $8 cost per thousand (CPM), $560,000 of the $800,000 budget would have been wasted.
Here's how the results were determined: The panel tool suggested the overall average U.S. web traffic against the target audience to be 22 percent, with the seven recommended sites having indices ranging from 125 to 144. That means that only about 27 to 31 percent of their total traffic was the advertiser's desired audience.
If you only consider the impressions served to the target audience, the plan's effective CPM skyrockets to $26.60.
But if you bought only the intended audience -- through audience platforms like exchanges and real-time bidding (RTB) for direct response, or audience "futures" for brands -- you could reach this very same target for just $350,000 rather than $800,000.
Some would say that using third-party data as an alternative to panel-based analysis is far from accurate. I disagree, but even if so, for arguments sake, it's at least more accurate then shooting in the dark. That's because working with audiences tells you which data strategies, data vendors, and data sets perform best for your brand objectives -- and then you can use that knowledge to make adjustments mid- and post-campaign for better results.Leveraging audience platforms for RTB or futures buying mean reduced spending in short run. However, increased efficiency every dollar spent would also speed migration of ad dollars to the digital channel.
Media agencies should include audience strategy in every branding campaign. The business models and technologies to support it are in place, and it is now time for mass adoption.
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"Money in trash basket" image via Shutterstock.