Fail-proof recipe for a successful media business plan, by fifty-fiveMedia Consulting 7 April 2017
Do you want to discover – or rediscover – how to build a media business plan that is simple to recreate at home? To help you with this task, fifty-five is reviewing a few key ingredients and steps, which will help you to build your own custom “recipe”!
First of all, what is the point of a media business plan?
A media plan helps to define a media budget (meaning “advertising budget”) – for offline and online channels – and to assess return on investment ( ROI). To do this, one must identify the different media levers to engage (for example, TV campaign, video online campaign (VOL) and then prioritise them in function of a target ROI. This article will describe some parameters to take into account for the media mix in general, but will focus primarily on the digital media mix.
Setting up the target ROI is intrinsically linked to the objectives of media campaigns on the whole. Activation strategies and budget allocations across different channels will also be determined by these same objectives. Lastly, at fifty-five, we believe that measurement should be at the centre of media strategies. In an upcoming article, we will detail performance-measurement tools that help to measure a plan’s effectiveness, and to create a continuous virtuous circle of optimisation in media plans.
Defining a precise brief helps to identify what the focus of a media strategy should be
There are four types of business plan objectives, relating to the four steps of the buying process:
- Building a reputation (branding): this objective is pursued to guarantee visibility and brand awareness in the initial phase of the buying process. At this stage, prospective clients want to buy a product/service without particular brand preference.
- Generating traffic: This objective corresponds to the evaluation phase. Prospective clients are already comparing different brands, and the goal is to draw them to your site.
- Driving performance: This phase consists of making prospective clients into clients.
- Fostering loyalty: This means encouraging clients to re-engage with the brand.
Choosing an objective is not exclusive insofar as different steps of the buying process are interdependent. This is simply a way to prioritise budget allocations. It is necessary to continuously invest in media throughout the buying process. In other words, one must pursue the four objectives simultaneously while focusing on one objective in particular. The “reputation” and “traffic” levers lay the foundation for “performance” and “loyalty”.
Once the objective is defined, we must turn to the target: “What kinds of people fall under this brand communication target?”
It is important to broadly outline the main characteristics of the target, as this can influence media costs. For example, millennials have a particularly strong presence on social media and usually present a lower cost per click ( CPC) than older populations that are less present on these platforms. Thus, it is useful to define at least the age range, gender, and geographical location of the target.
Lastly, one of the major components to define for the business plan is annual budget. How should this budget be fixed? How much should be set aside for digital media?
In terms of budget allocation, we usually observe that 30% of marketing budgets is allocated for digital media. However, this varies depending on sectors and countries.
In 2016, eMarketer found that in the United States, 28.3% of budget was dedicated to digital media in 2014, and predicted this number would rise to 44.9% by 2020. Results of the quarterly study carried out jointly by the SRI, UDECAM, and PwC are in line with these predictions, as during the first semester of 2016 French advertisers spent about 30% of their advertising investments on digital media. Also, as the study shows, digital media proportions may vary from one country to another. In China, for example, it exceeds 50%.
The marketing budget can be decided in advance, fixing an annual amount with a top-down approach, but it is also possible to adopt a bottom-up approach. In this case, budgets are fixed based on ROI goals and potential investments needed to saturate these performance levers (explained in more detail below). The (paid) monitoring tools on the market today, such as those from Kantar Media or Nielsen, can be useful to inform and decide one’s budget allocations, based on how the major players in a given industry are reported to allocate their own budgets.
After defining the strategy, you can decide what media levers should be activated
Each given objective corresponds to levers to activate – over digital media or not – and to monitor according to specific KPIs.
|Building a reputation (branding)||OOH (Out of Home), Radio, Specialised press, TV, VOL (Video Online), Display, Special Operations||GRP (Gross Rating Point), coverage rates, reach, impressions, repetition/capping, CPM (cost per thousand impressions)|
Click-through rate, site visit volume, time spent on site, bounce rate, cost per visit
|Very weak ROI (Return on investment, or turnover divided by advertising spending) is common with these levers, but this should not be used as a key indicator of performance.|
|Generating traffic||SEA using generic and product keywords, Social Media, Display with low CPM, Display on comparison sites, Native ads||Click-through rate, site visit volume, time spent on site, bounce rate, cost per visit||Observed ROI for these levers is generally higher than for branding levers, but can’t really be used as a KPI because it is not directly related to generated traffic|
|Driving performance||SEO, SEA with branded keywords, retargeting||Volume of leads or conversions, ROI with a last click vision across all levers||Performance is key here, as the campaign is purely intended to maximise profitability – and, therefore, ROI.|
|Fostering loyalty||PRM/ CRM(Prospect and Client Relationship Management) esp. via e-mailing, Retargeting, Direct offline Marketing (mailings, phone calls)||ROI but also re-engagement KPIs (email open rate, click through on opened e-mails)|
Once these levers have been identified and prioritised to serve the main objective of the business plan, we can then turn back to the budget. The rest of the article will seek mainly to describe how to build a digital budget.
Note that Search is generally a priority in the budget allocation: inclusive of mobile, this channel totals 50% of HY 2016 advertising spends in the US (IAB/PwC Internet Ad Revenue Report, HY 2016). In France, it accounts for 55% of the digital media mix.
Let us now take two examples, looking at two advertisers with different profiles
- Brand A is a retailer, well-established on its market, who is looking to maximise its e-commerce performance. Here, building the business plan will seek to maximise its e-commerce performance by focusing on performance levers. The budget allocation will thus favour SEO and SEA – particularly Branded SEA – and Retargeting. This means that a maximum potential of investment will be calculated for each of these levers in order to define a saturation level, where share of voice will be strongest. However, we will be careful to set some budget aside for less ROI-focused levers, to drive traffic to the e-commerce site. As Display does not have maximum investment, its budget will only be defined a priori.
- Brand B is a B2C company, as yet little-known on its market, wishing to grow its reputation. In this case, the objective is reputation and thus the levers engaged should be print & OOH, TV, VOL, Special Operations, or display. Performance levers will be less important as their investment potential will be limited and quickly saturated. The chances are low that a company with a weak reputation would notice a large number of searches for its brand on search engines. What’s more, the retargeting potential will be limited by the number of site visitors/clients.
Two other elements should be taken into consideration for budget allocation: seasonality and synergy between digital and non-digital initiatives. Annual budgets should of course be divided following key business periods, and change in demand. Also, digital initiatives (such as VOL) must integrate well with non-digital initiatives (such as TV campaigns) to maximise the overall impact. In other words, there should be one vision per campaign, spread across levers, rather than one vision per lever. It is important to consider potential impact on team consideration.
To summarise, building an annual business plan goes hand in hand with defining pursued objectives, and with focusing on the target and the defined budget. This thinking leads to budget allocation across different levers, which also takes seasonality and digital/non-digital synergies into consideration. Lastly, measurement is the final and fundamental ingredient in building a business plan, as it creates a virtuous circle through performance optimisation, which is then echoed in the next business plan. This last aspect will be detailed in an upcoming article – stay tuned!
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Translated from the original French by Niamh Cloughley.