MMi spends a lot of time educating advertisers on the importance of accurate forecasting in media. One client dubbed this “Truth in Planning” and nearly all MMi clients have a documented “tolerance” range with a cap on the high end to mitigate the risk associated with poor planning and projections. In addition, many clients have experienced the difference in mix modeling outputs and recommendations based on improved precision of inputs. Agencies regularly present Over Delivery as a more-is-better phenomenon, but in media it represents a resource allocation problem. In fact, when allowed as regular practice, it demonstrates mismanagement of advertiser funds.
Over Delivery of 20% means the agency spent $1,000,000 on an $800,000 job. What might your organization have done with that $200,000?
Advertising budgets are not infinite. (If they seem to be, I guarantee you are missing something. Most likely blinders to some other function in your organization.)
Below are some channel-specific questions to ask your agency if your media buys habitually Over Deliver. For future buys, the best way to ensure accurate forecasting is to document delivery range expectations with both minimums and maximums either via contractual Media Performance Criteria or via Buying Guidelines.
Networks carefully manage their inventory to deliver 100% at the end of a guarantee period. (Or in MMi experience 94%, and then take another year to get to 99.2% at which point they tell the agency this rounds up and the advertiser is made whole. This is one of the key benefits of partnering with MMi to close this gap and timing.) In addition, if the guarantee period is four quarters, or an “Upfront” year, the networks will play games with lower-demand and higher-demand time periods as much as the advertiser allows. Retailers will deliver 90% in December and 110% in January. Almost like clockwork. If nobody is calling them out on it.
• How are you protecting my delivery in my key flights? Are there any partners who will provide audience guarantees by quarter or flight?
• Should we refuse Audience Deficiency Units the first two weeks of January, Memorial Day, out of flight, etc.?
Local stations show a bit more fluctuation in supply and demand (audiences and advertising) than National networks. This is influenced by, but not limited to, volatility of Sports or News event viewing, seasonality, measurement reliability, politicals, retail grand openings, etc. In addition, audience guarantees are not to 100% and are too-often ignored by local mom-and-pop or less sophisticated advertisers. This is why all types of $0 spots are negotiable as part of local buys.
• Did we over deliver due to conservative ratings estimating? Which shows, newscasts, or games were unexpected hits?
• Did we over deliver due to a lot of $0 spots? What happened in the market to allow those to be available? Were they during our key periods or in low-demand weeks? Will this happen again next quarter (i.e. can we count on it, and should it be part of our planning assumptions)?
• Can we afford more [Primetime, Weeks, Longer Commercials, etc.] than we thought?
• Should we re-state plans for next quarter and re-invest savings elsewhere?
Forecasting impressions in Digital can sometimes be the most challenging. Not only might consumer attraction to a particular site or content be hard to predict, but the digital ecosystem allows for sourced traffic and dispersion throughout an Ad Network or Ad Exchange. For endemic sites and share-of-voice objectives, inventory can fluctuate based on consumer interest. For ad exchanges or programmatic buys with a quality goal such as percent in-view, the impressions tally may keep running up until the viewable impressions goal is achieved. There may also be excess inventory the publishers will grant as goodwill/added value for the advertiser.
• Who paid for the Ad Serving and Ad Verification fees on the over delivered impressions?
• What led to the over delivery? Will this happen again next quarter?
• Did the impressions we paid for achieve our quality and brand safety goals?
• Did the extra impressions provide benefit or create greater problems with brand safety or out-of-date messages? Were they delivered outside the U.S. and is that acceptable?
• Did the impressions run where they were intended, or were they sourced from elsewhere?
• For biddable media, can we lower CPMs and re-invest savings elsewhere?
Media is a large investment for marketing organizations and forecasting is extremely important for making sound resource allocation decisions. Make sure any Over Delivery is understood and minimized so that advertising budgets are used responsibly.
The mantra to Under-Promise and Over Deliver is best reserved for your product benefits or customer service, and not the media supply chain.
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