The Media Value Chain  - Understanding where value is created, lost and hidden

TrinityP3 October 4, 2012
© COPYRIGHT 2012

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Value vs Price

"Price is what you pay, value is what you get”
In media, getting the cheapest price, isn't always the best result.

- Warren Buffett

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What is the media value chain?

A company turns money into business value by investing in the media placement of their communications messaging.

$ BRAND MEDIA

$
Done correctly, that media placement creates more value for the company than it cost to buy, making a profit on their media investment.
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The complexity of the media value chain

1.  Companies usually entrust 3rd parties to manage this investment. 2.  It is hard to link the price paid to the value delivered because the process of investing in media is not transparent making it difficult to account for what is being bought. 3.  It is fragmented with no one person (or body) having full visibility of the full length of the media value chain.

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The challenges of the media value chain

BRAND

$

MEDIA AGENCY

$

MEDIA

1.  The company decides to spend money to connect its brand to its consumers via media. 2.  The company engages a 3rd party agent (media agency) to plan, execute and manage the buying of that media, passing on the required funds. 3.  This appears to be a very simple transaction but it relies on the company and media agency having an aligned, transparent process of decision making and purchasing. 4.  It is further complicated by the fact that media audience delivery is an intangible commodity. 5.  Therefore you have to trust the paper trail (audit) to tell you what you bought…
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Media value created, lost and hidden?

If your media value chain doesn't work efficiently you are potentially losing more value than you create, resulting in a net value loss and waste for the company. The first step in making a (near) perfect media value chain is to identify what is creating value, what is causing value to be lost and where value is not properly accounted for (hidden)? Much of the value in the media value chain is discretionary on behalf of the agencies.

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How is value created in media?

VALUE CREATED •  •  •  Negotiation creates additional value which is normally kept by the agency. Smart media planning minimises wastage making budgets go further, new value is created. A strong media value chain where the company is working with the right agency and has processes in place to focus and incentivise the agency to create value. A transparent approach to media buying, activated in the best interests of client and not according to the agency's share deals. Full transparency of budget dollars and where they go including full invoice transparency.

•  • 

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How is value hidden and lost?

HIDDEN •  •  Lack of transparency in buying, rebate retention, digital trading desks, media brokering. Pressure on remuneration provides an incentive to agencies to be less transparent.

LOST •  •  Missed opportunities, sloppy buying, poor planning, bad process, poor briefing, media bias. Paying agency by media commission makes their resource nontransparent (they can move people on and off your business at will).

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The secret to a good media value chain?

Better strategy
Better Client - be the best client you can be

Better structure
Better Agency - work with the right agency or agencies for your strategic needs

Better process
Have processes between you that are aligned, accountable and productive

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Better Strategy

Media strategy

Digital Strategy

Social Media Strategy

Content Strategy

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Better Strategy

Customer & Data Analytics Research Insights Comms Strategy Channel Strategy

Media Strategy Planning Trading

Digital Strategy Planning Optimisation

Social Strategy Execution

Content Strategy Concept Execution

Results
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Better Strategy

Customer & Data Analytics Research Insights Comms Strategy Channel Strategy

Media Strategy Planning Trading

Digital Strategy Planning Optimisation

Social Strategy Execution

Content Strategy Concept Execution

Results
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Better Structure

Customer & Data Analytics Research Insights Comms Strategy Channel Strategy Media Strategy Planning Trading Digital Strategy Planning Optimisation Social Strategy Execution Content Strategy Concept Execution

Results
marketing management consultants

Better Structure

Customer & Data Analytics Research Insights Comms Strategy Channel Strategy Media Strategy Planning Trading Digital Strategy Planning Optimisation Social Strategy Execution Content Strategy Concept Execution

Results
marketing management consultants

Better Structure

Customer & Data Analytics Research Insights Comms Strategy Channel Strategy Media Strategy Planning Trading Digital Strategy Planning Optimisation Social Strategy Execution Content Strategy Concept Execution

Results
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Better Processes

Aligned •  •  Align media channel strategies to the communications strategy. Align all agency briefs to the comms strategy and specific channel strategy.

Accountable •  •  Ensure all media briefs have clear, measurable objectives to be delivered. Reward the agency (or agencies) for value delivered.

Productive •  •  Measure all media activities against delivering value. Engage the agency (or agencies) in delivering outcomes.

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Improve the value in your media value chain
ü Recognise media is a value chain for your company and brand. ü Define media value in relation to your business, communications and
channel strategy.

ü Look for where media value is being created, hidden and lost
currently throughout the media value chain.

ü Ensure your media strategy is aligned to your channel strategy,
marketing strategy and business value strategy.

ü Review your media value chain structure to ensure you have the right
agencies and suppliers delivering value at each step. maximum media value.

ü Optimise processes to engage and focus the agency on delivering

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For more information contact…

ID Comms Ltd London +44 20 7855 7610 TrinityP3 Pty Ltd Sydney +612 8399 0922 Melbourne +613 9682 6800 Hong Kong +852 3589 3095 Singapore +65 6884 9149 people@trinityp3.com www.trinityp3.com

Members of the Marketing FIRST Forum

info@idcomms.com www.idcomms.com

TrinityP3’s liability is limited as per our standard terms and condition as approved by the client prior to the project commencing

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