MSc.

Marketing










Exploring the marketing activities amongst Icelandic marketers:
Media planning and
media mix decision making







Authors:
Aron Vglundsson
Helgi Kristinn Halldrsson
Advisor:
Jessica Aschemann-Witzel
Characters (with spaces): 199,558




J uly 2012





Table of Contents
1. Introduction .................................................................................................................. 1
1.1. Problem statement ................................................................................................. 4
1.2. Delimitations ......................................................................................................... 5
1.3. Structure ................................................................................................................ 6
2. Theoretical background ................................................................................................ 6
2.1. Decision making .................................................................................................... 7
2.2. Background of marketing communication ............................................................ 8
2.3. Definition of terms and concepts ......................................................................... 13
2.4. Developing the media plan .................................................................................. 14
2.5. Factors and trends ................................................................................................ 18
3. Research design .......................................................................................................... 22
3.1. Interview process ................................................................................................. 26
3.2. Tools used in the research process ...................................................................... 29
3.3. Data gathering and analysis ................................................................................. 30
3.3.1. The Icelandic market .................................................................................... 30
3.3.2. Findings and interpretation .......................................................................... 32
4. Discussions ................................................................................................................. 62
5. Conclusion .................................................................................................................. 80
Bibliography ................................................................................................................... 87
Appendix ........................................................................................................................ 90












Abstract

The aim of this paper is to explore how media allocations within Icelandic firms are
made with the main focus on media planning and related decision making processes;
explore how marketing resources are divided between different media and marketing
activities; and furthermore, investigate what stimulates the decisions that are made to
reach such conclusions.
The development of media consumption is constantly changing and even though the
utilisation of media vehicles may fluctuate upwards or downwards from time to time,
traditional media such as television, newspapers, and radio seem to have remained
relatively stable throughout the years in the Icelandic market.
This discrepancy between what media marketing managers perceive to be most effective
and how they actually utilise the respective media is a very interesting subject, which
together with the differences in real media allocation is what sparked the authors
research idea. The main objective is therefore to examine the underlying processes
concerning decision making in relation to media plans and choices in order to get a
better idea of how marketers and professional media planners approach the subject
matter.
The results show that for marketing managers it is evidently very important to have a
holistic view of their marketing activities spanning from marketing strategy all the way
to the minds of end consumers. Even though this process seems to be in place with some
companies in the Icelandic market there are still many companies that lack this holistic
approach and oversight, especially with regard to the research phase not being utilised
enough. If research is not conducted regularly throughout the year, the other links in
the process that build upon research are weakened and the effectiveness of the end
result might be diminished.


1






1. Introduction
Half the money I spend on advertising is wasted; the problem is I dont know which
half
- John Wanamaker

The daily lives of people are to some degree influenced by the marketing
communications of companies and organisations, where people are exposed to a wide
assortment of messages from these parties throughout the day. Marketers ability to
adapt to new ways of communicating with target audiences must develop at a similar
pace as new media and media vehicles come into existence. When consumers change
their consumption patterns, the marketing communications strategy to reach these
consumers must change as well. From the marketers perspective these shifts in patterns
make optimising the monetary funds of marketing communications extremely
important. A significant part of this perspective is to have a holistic approach with
regard to processes concerning actions and objectives, as well as decision making that
involves all the right elements that are needed in order to reach those targets. This
process, and how it is being utilised in the Icelandic market, is the subject matter for this
thesis.



2


Figure 1. The development of advertisement expenditures in Iceland.
Source: Statistics Iceland 2012.
*Online is based on unpublished figures by Statistics Iceland provided and confirmed by Ragnar
Karlsson, Statistics Iceland, (2012).

The development of media consumption is constantly changing, and, even though the
utilisation of media vehicles may fluctuate from time to time, traditional media such as
television, newspapers, and radio seem to have remained relatively stable over the past
fifteen years in the Icelandic market (figure 1). In order to put the Icelandic media split
in some kind of perspective it is worth noting how it compares to the rest of the world
(figure 2). Clearly it can be seen that there is a difference between how Icelandic
marketers allocate their media budgets and their peers in the rest of the world. It is
noteworthy that the difference is so considerable with respect to the different media, so
the authors intentions were to take a closer look at the Icelandic market in order to find
out how decisions concerning media allocations are being made amongst marketers.
Why the authors choose to focus solely on the Icelandic market is partly based on the
difficulty of comparing Iceland to other countries, since the impact of the economic
crisis is still very much in place in Iceland. In addition, focusing on a single market
allows the authors to get a more detailed look into the inner workings of the
marketplace.
0%
10%
20%
30%
40%
50%
60%
70%
Newspapers
Radio
TV
Cinema
Online*


3



Figure 2. Comparison of advertisement expenditures in Iceland and Global in 2010.
Source: For Iceland Statistics Iceland (2012), for Global Warc.com 2012.
*Online is based on unpublished figures by Statistics Iceland provided and confirmed by Ragnar
Karlsson, Statistics Iceland, (2012).

The Association of Icelandic Marketing Professionals (MARK) and the Society of
Icelandic Advertising Agencies (SA) annually conduct a survey to examine the trends
and outlook of the Icelandic advertising market. The market research firm Capacent is
responsible for the survey, which is conducted through phone and online questionnaires.
It is aimed at 4-500 of the biggest advertisers on the Icelandic market, which gives this
questionnaire authority in illustrating how marketing managers perceive different
media. Looking at some of the results from that survey (table 1), where marketing
managers were asked about their opinion on the effectiveness of the various advertising
media, it can clearly be seen that TV is considered the most effective advertising media;
newspapers are believed to be next effective advertising media; the Internet in third
place, if taken together with social media, online as a whole can actually be considered
the second most effective advertising media in marketing managers opinion. When
comparing these results to actual media usage (figure 1), a clear discrepancy can be seen
between a mediums effectiveness in the mind of a marketing manager and how he or
she allocates the media budget between the respective media.


0%
10%
20%
30%
40%
50%
60%
Newspapers Radio TV Cinema Online*
Iceland
Global


4

Television 50,3 %
Newspapers 14,9 %
Internet* 10,5 %
Other 11,6 %
Social media 7,7 %
Radio 5,0 %

Table 1. The most effective advertising media according to Icelandic marketing
managers. Source: Capacent Gallup Iceland (2012).
* Excluding social media

This discrepancy between what media marketing managers perceive to be most
effective and how they actually utilise the respective media is a very interesting subject,
which together with the differences in media allocation is what sparked the authors
research idea. The main objective is therefore to examine the underlying processes
concerning decision making in relation to media plans and choices in order to get a
better idea of how marketers and professional media planners approach the subject
matter.

1.1. Problem statement
The purpose of this thesis is to a) investigate how media allocations within Icelandic
firms are made with the main focus being on media planning and related decision
making processes, b) explore how marketing resources are divided between different
media and marketing activities, and c) investigate what stimulates the decisions that are
made to reach such conclusions. Therefore the answers to the following question are
sought:
How do I celandic marketers make decisions concerning marketing communications
and the optimisation of marketing investments?

To answer this main question, the authors will examine the process marketing managers
go through in relation to media planning - from the incentives or objectives forming the
foundation for the decision making, to the actual choices made on which media is most


5

suitable to reach target consumers as well as measurements of results. In order to get
different perspectives on the media planning and decision making process, and to
increase the depth of the research, the knowledge and insight of media planners is
explored in relation to the responses from marketing managers. The authors seek to
answer the following questions and sub questions:

Which elements are involved in media plan development?
o What are the main phases of the media plan decision making process?
o What elements determine media planners choice of media, as opposed
to in-house planners?
o Which factors determine the choice of online media?
o How does company size affect media plan decision making?
o How do media sales people influence media choices?
o Are media mix decisions determined by tradition?
o What is the ratio between production and placements of advertisements?
What tools and techniques do marketing managers use to make informed
decisions?
o To what extent do marketing managers utilise market research?
o How much are marketing managers decisions influenced by their own
judgement or intuition?
What might cause any differences between perceptions of effectiveness and the
actual utilisation of advertising media?

1.2. Delimitations
The paper focuses exclusively on firms in Iceland and, moreover, marketing managers
within those firms as well as media planning professionals from media agencies. No
comparison is intended between Iceland and other countries, but rather the goal of the
paper is to explore the situation in relation to the Icelandic market. Furthermore,
medium-sized and large Icelandic companies are only included, as smaller companies
might not be utilising marketing communications, and therefore would most likely not
add any additional relevant information needed for the research at hand. Even though
Icelands business community has been affected by the economic crisis, through the


6

total collapse of the countrys banking sector, its impact will not be considered in this
thesis.

1.3. Structure
To begin, the main problem is presented in the introduction along with the reasons that
sparked the idea and form the basis for this subject matter. Literature on the subject will
be explored, examined and discussed, including the background of marketing
communications, decision making theory and other related concepts regarding the
development of media plans. Thereafter research methods will be explained and the
main elements from interviews with decision makers in medium-sized and large
Icelandic firms are presented and examined. Finally, research findings are discussed and
the main results from the research are presented in the conclusion.

2. Theoretical background
The purpose of this chapter is to examine literature related to the subject matter on
which this thesis is built upon; relevant fundamental media planning and marketing
theories are explored in this chapter and basic concepts are explained.

Although a thorough search of relevant literature was conducted, few exact matches to
the subject matter were found. Most articles were regarding media planning or
marketing theories, and the authors found that there were very few relevant journal or
trade articles about the actual process of decision making in relation to the process from
marketing plan to media plan, and furthermore none related to the Icelandic market. The
authors made a list of the search for literature that can be seen in Appendix 5. The only
articles the authors found were either about media planning or marketing theories, none
of which were regarding the actual process of decision making in relation to media
planning, i.e. the process from marketing plan to media plan. The authors explored
some of the relevant trade magazines connected to the subject with similar results. A list
of the aforementioned article search can be found in Appendix 5.




7

2.1. Decision making
Given the many implications decision making has on media plans of marketing
managers and media planners, the general fundamentals of decision making is explored
in this section. Amongst the major challenges facing companies is to ensure that
employees reach effective decisions, both in terms of speed of the decision making, and
of the quality of the decisions made. But as companies move to flatter structures,
decision making is becoming increasingly delegated (Brooks, 2009). As such, the
quality of management decision making often tends to be poor because managers are
often in a hurry to make decisions, or become obsessed with certain features of a
particular solution, even if it has been shown not to work. Furthermore, poor decision
making is frequently the result of short-term target setting, which is a particular feature
of the decision processes of chief executives that are often on fixed-term contracts
(Nutt, 1997). When looking at the decision making process by individuals, Brooks
(2009) uses the rational model of decision making, arguing that decision making is a
rational and linear process that produces logical outcomes. This model implies that
when people are faced with a decision they go through four steps: 1) identify a problem
for which decision needs to be taken; 2) gather information and materials that help them
to solve the problem; 3) generate possible solutions to the problem; and 4) rationally
select and implement the best solution. This model suggests that the decision maker has
an abundance of time to gather information and review all possible options, however, in
the modern day business environment, decisions often need to be made under
considerable pressure and time limitations, which casts doubt upon the effectiveness of
such a rational and linear model. The possible weakness of this model was first
identified by Herbert Simon who introduced the concept of bounded rationality, arguing
that decision makers in organisations are under pressure and are therefore likely to
choose the first solution that will satisfice or achieve some sort of satisfactory solution
(Brooks, 2009).

2.1.1. Bounded rationality
In the 1950s, Herbert Simon investigated the limitations associated with peoples
judgement and decision making. His analysis of organisational decision making led him
to conclude that the mind undertakes short-cut strategies in order to deliver satisfactory
solutions to problems, better known as bounded rationality. Part of that research


8

emphasised the relationship between the human mind and the nature of the evolving
environment, that is to say the use of heuristics or short-cut strategies that often lead to
positive outcomes precisely because the heuristics are the product of environmental
contingencies (Simon, 1955, 1956).

Quickly finding a solution to a problem makes managers lives more comfortable, but in
some cases might lead them to making less effective decisions. Another approach looks
at strategies people adopt when making choices under different circumstances, or
adaptive decision making. This approach argues that, people have a variety of options
ranging from simple strategies to the highly analytical ones (Payne et al., 1993).
According to this approach, choices made are dependent on a trade-off between the
effort required to implement them and the importance of high accuracy. In many cases,
a reasonable level of accuracy can be achieved with the less analytical strategies
(Hardman, 2009).

2.2. Background of marketing communication
According to the American Marketing Association (AMA), marketing is defined as "the
activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at
large" (American Marketing Association, 2007). Given a companys marketing
objectives and goals, target segments and the market position, the marketing mix is the
means through which marketers try to influence consumer demand as well as from their
trade channels (Pelsmacker et al., 2010).

In order to be effective in achieving a companys marketing objectives, various
elements of the marketing mix need to be assembled into a holistic marketing program
that creates, communicates, and delivers value to consumers (Kotler & Keller, 2009).
The keyword for a good marketing mix is therefore integration of the various
instruments. Synergy and consistency are also important principles in designing and
implementing the marketing mix, where all instruments have to be devised in such a
way that the effects of the tools are mutually reinforcing as well as being consistent with
each other and working in the same direction without any conflicting issues. Successful
marketing therefore depends on a well-integrated, consistent and synergetic marketing


9

mix, with the same principles being relevant for both marketing as a whole, as well as
the various instruments in the marketing mix (Pelsmacker et al., 2010).

2.2.1. Defining marketing communications
Marketing communications are considered to be one of the most visible instruments in
the marketing mix, involving means by which a company promotes its products and
image to target groups and stakeholders (Pelsmacker et al., 2010). According to Kotler
& Keller, marketing communications is defined as, the means by which firms attempt
to inform, persuade, and remind consumers directly or indirectly about products
and brands that they sell. (2009, p. 787). In a broad sense, marketing communications
can be seen as representing the voice of the company and its products. It helps to
establish a dialogue and build relationships with consumers, and it allows companies to
link their products to other people, places, events, brands, experiences, feelings, and
things. Furthermore, marketing communications can help build brand image, and
thereby contribute to brand equity, driving sales, and even affect shareholder value
(Kotler & Keller, 2009).

Although advertising is a central, and often the most visible element in the
communications mix, it is not the only one means to build brand equity and drive sales.
The communications mix includes a large variety of elements that each has their own
typical characteristics, strengths and weaknesses. The elements of the communications
mix can be categorised into personal communication, which is directed to certain known
individuals, and mass communication, which uses mass media to reach the broadest
audience. Personal communication includes mainly direct and interactive marketing
actions, as well as personal selling; whereas all other tools can be considered mass
communications, such as advertising, sales promotions, sponsorship, public relations
(PR), point-of-purchase (POP), exhibitions and trade fairs, and personal selling
(Pelsmacker et al., 2010). Furthermore, each of these categories contains distinct
instruments that convey messages to potential consumers, in order to influence or
persuade them to buy products or services.



10

Another way of classifying marketing communications tools is to distinguish between
theme or image communications, in which the advertiser tries to convey something
about a brand, product or service offered to the target group; and action
communications, that seek to influence a target groups buying behaviour. The main
purpose of image communications is to improve target group relations, customer
satisfaction as well as reinforce brand awareness and preferences; whereas the role of
action communications is to stimulate consumer purchase. These two classifications are
also known as above-the-line or image and below-the-line or action, with the difference
lying in that line that relates to the commission advertising agencies used to earn for
above-the-line communications. All above-the-line communication tools usually lead to
a 15 percent commission fee upon purchase of media space in mass media, whereas
below-the-line communication tools do not earn such fee since they are traditionally not
distributed through mass media. Although terminology relating to the line has lost
some of its meaning to agencies, because hourly rates or a fixed fee are rather being
charged now rather than work being undertaken on commission, it is still being used in
practice to distinguish between different marketing communication tools (Pelsmacker et
al., 2010).

2.2.2. Integrated marketing communications vs. traditional marketing
communications
The aforementioned principles of consistency, synergy and integration that successful
marketing depends upon apply to marketing communications, as well they are all
important principles in the marketing communications mix. Integrated marketing
communications (IMC) are keywords when various communications tools are combined
in a holistic fashion, as opposed to what nowadays is referred to as traditional or classic
marketing communications. Before, in traditional marketing, various communication
tools were usually used in isolation, and frequently delivered generalised transaction-
oriented messages through mass media. Nowadays, integrated marketing
communications are much more personalised, customer-oriented, relationship-based and
interactive; here the key objectives of modern-day marketing can be reached much more
effectively than by means of traditional communication strategies (Pelsmacker et al.,
2010). Integrated marketing communications are defined by the American Association
of Advertising Agencies as a concept of marketing communication planning that


11

recognises the added value of a comprehensive plan that evaluates the strategic roles of
a variety of communication disciplines - for example, general advertising, direct
response, sales promotion and public relations - and combines these disciplines to
provide clarity, consistency and maximum communications impact (Schultz, 1993,
p.17).

What IMC brings to the table compared to traditional marketing communications is that
messages to target audiences are conveyed in a more consistent fashion, through a
synergistic blend of the various tools and touch points of the communication mix,
leading to a more effective and efficient marketing communications (Pelsmacker et al.,
2010). However, integrated marketing communications is far from being a reality in
most companies. Management by separate individuals and/or departments of different
parts of the marketing mix, lack of internal communications, the perceived complexity
of planning and coordination, as well as existing structures are some of the barriers that
prevent the effective implementation of IMC (Pelsmacker et al., 2010). In these
situations the benefits of integration may be overlooked.

2.2.3. How marketing communications work
There are many different ways to explain how consumers might process marketing
communications, but one type of explanatory framework, the hierarchy-of-effects
models, has come to dominate marketing communications literature. Hierarchy-of-
effects models presume that things have to happen in a certain order, and that earlier
effects form conditions in order for the later effects to occur, this hierarchy may differ
depending on the type of product and buying situation (Pelsmacker et al., 2010).
Generally speaking, these models depict the stages a consumer may pass through in
moving from a state of not being aware of a company, product or brand to actual
purchase behaviour (Belch & Belch, 2011). All these models assume that the consumer
goes through a sequence of three different stages when responding to marketing
communications. The basic stages being a cognitive, an affective and a conative stage:
the cognitive stage involves consumers engaging in mental (thinking) processes that
lead to awareness and knowledge of the product; in the affective stage feelings or
emotions associated with the particular product are evoked and attitudes are formed; the
conative or behavioural stage refers to the actions of the consumer towards a product,


12

i.e. its trial, purchase, adoption, or rejection (Pelsmacker et al., 2010; Belch & Belch,
2011).

The majority of these models assert that consumers go through these three basic stages
in a well-defined sequential manner, however, some differences exist in relation to the
exact sequence of the different stages that has resulted in alternative models being
developed. Two of the most frequent models referred to in literature are the AIDA
model by Lewis, where the consumers attention is drawn in the cognitive stage, interest
and desire are evoked in the affective stage, and an action is taken in the conative stage;
and the Hierarchy-of-Effects model by Lavidge and Steiner, in which consumers
awareness and knowledge is raised in the cognitive stage, likings, preferences and
convictions are evoked in the affective stage, and the purchase is made in the conative
stage (Pelsmacker et al., 2010).

2.2.4. Advertising research
If it is not measured or researched, how can one know or convince others what works or
what doesnt when it comes to advertising? Advertising activity can be supported by
research in four stages of an advertising campaign development: 1) preliminary or
strategic advertising research; 2) pre-testing research; 3) post-testing research; and 4)
campaign evaluation research. In the strategic advertising research phase, an advertising
campaign is prepared by investigating the marketing strategy, the competitive situation
and the competitive environment the advertising is to be placed in (Pelsmacker et al.,
2010). In the development phase, before media placements occur, ads can be pre-tested
in order to find possible flaws and weaknesses they might have. This can often result in
better advertisements, but tests can never lead to the best possible ad due to all kinds of
limitations and shortcomings of most of the techniques, e.g. artificial settings, limited
time between exposure and test, etc. In the next phase, post-tests are conducted after
media placements and appearances occur, such as exposure, recall and recognition tests,
as well as behavioural measures. And the last phase involves evaluating the campaign
as a whole, focusing especially on the brand-related effects of a campaign, such as
brand recall and recognition, attitude towards the brand, purchase intention; as well as
highly important behavioural or commercial measures, such as trial, repeat purchase,
loyalty, sales and market share (Pelsmacker et al., 2010).



13


2.3. Definition of terms and concepts
Before exploring theories in relation to media planning and strategy processes, there are
some basic terms and concepts that need to be explained.
Media planning is a series of decisions that deliver a promotional message to
prospective buyers of a product and/or users of a product or brand, as well as being a
process, which means a number of decisions are made, each of which may be altered or
abandoned as the plan develops (Belch & Belch, 2011, p. 327). The authors define
media planning professionals or media planners as people that work professionally on
consultation and development of media plans, usually working for advertisers through
media agencies, or in some instances advertising agencies. The plan is the guide for
media selection, requiring the development of specific media objectives and media
strategies. A medium is a general category of available delivery systems that include
broadcast media such as TV and radio; print media, e.g. newspapers and magazines;
direct mail, for instance flyers and catalogues; outdoor advertising; online media and
other support media. Media vehicles are the specific carriers within each of these
categories, each vehicle with its own characteristics as well as its own strengths and
weaknesses. Reach is a measure of the number of different audience exposed to a media
vehicle at least once in a given period of time, coverage refers to the potential audience
that might receive the message through a vehicle, and frequency refers to the number of
times the audience is exposed to the media vehicle within a specified period of time
(Belch & Belch, 2011).
Share-of-voice (SOV) is the ratio of one companys communication investments
divided by the total communication investments of other players in the same market.
Share-of-market (SOM) is the market share for a given product or product category, one
should investigate the SOV and see how that relates to the SOM and its impact
(Pelsmacker et al., 2010). Other concepts and terms will be defined as they are
presented.






14

2.4. Developing the media plan
There are many elements involved in the development of a media plan. The starting
point is usually some kind of situation analysis, for example, undertaking a complete
review of internal and external factors as well as competitive strategies. Such an
analysis is performed to better understand the a companys marketing problem at hand,
its competitors, size and share of the total market, sales history, costs, profits,
distribution practices, selling methods, utilisation of advertising, identification of
prospects, and information about the nature of the product. Its findings are used to
develop a firms marketing strategy, with the purpose to plan for activities that can
solve the respective marketing problem. The marketing strategy plan includes the
determination of marketing objectives; product and spending strategy; distribution
strategy, which elements of the marketing mix are to be used for; and identification of
ideal market segments (Belch and Belch, 2011). When it comes to defining marketing
goals and objectives, there can be several that are consistent with the stages in the
consumer decision-making process, e.g. stimulating product category need, increasing
brand awareness and brand knowledge, improving brand attitude or image, increasing
purchase intention and facilitating purchases, and maximising customer satisfaction and
brand loyalty (Pelsmacker et al., 2010).


Figure 3. Developing the media plan (Belch & Belch, 2011)

According to Belch & Belch (2011), the aforementioned situation analysis and the
marketing strategy plan form the basis of the market analysis, which is the first phase in
the process of developing a media plan (figure 3). To better clarify the factors
mentioned, in relation to the situation analysis, the internal factors may involve the size
of the media budget, managerial and administrative capabilities, or the organisational
structure; whereas external factors might include economic aspects, changes in
technology such as new media, as well as competitive factors (Belch & Belch, 2011).



15

A media situation analysis should lead to the establishment of specific media objectives,
or the second phase of the media plan development process. These objectives are the
goals for the media program, e.g. to increase awareness by reaching 80 percent of the
target audience at least two times over the next three months. The objectives should be
limited to those that can be reasonably accomplished through media strategies (Belch &
Belch, 2011).

The third phase in the media planning process is the development and implementation
of media strategies which evolve directly from actions required to meet the previously
determined objectives. Here various criteria must be taken into consideration and each
one will be explained briefly. The media mix involves choices concerning which media
and media vehicles to utilise, even though it is possible to choose a single medium or
vehicle, it is more often the case that marketers employ a combination in order to
increase coverage, reach, and frequency, whilst improving the odds of reaching their
overall marketing and communications goals (Belch & Belch, 2011).
Another criteria are coverage consideration, where, for example, a target market goal
might be to increase media coverage to the target audience, whilst minimising the
amount of overexposure. Geographical goals might involve putting more emphasis on
coverage in certain areas where some interest exists for the product in question, instead
of areas where the interest is small, and as a result, purchases are less likely to occur
(Belch & Belch, 2011).
With scheduling, the primary objective is to position communication activities to
coincide with the highest potential buying times. For some products these times are very
obvious, e.g. the placement of fast food advertisements on the radio in the afternoon
whilst people are driving home from work; whereas for others they are not so
identifiable. There are three scheduling methods used for media planning - continuity,
flighting, and pulsing. Continuity refers to a continuous pattern of advertising without
gaps or non-advertising periods. It is most often used for products consumed on an
ongoing basis without regards for seasonality, such as laundry detergents. Flighting
involves irregular periods of advertising and non-advertising, for example the
advertising of skis is heavy during high-season, and sometimes also before and after the
season, but nothing during low season. Pulsing is a combination of both preceding
methods where continuity is maintained, but advertising is increased in certain periods,


16

such as around holidays (Belch & Belch, 2011). Below the advantages and
disadvantages of the different methods are described, in table 2, as according to Belch &
Belch (2011, p.354).

Continuity Flighting Pulsing
Advantages: Serves as a constant
reminder to the
consumer, covers the
entire buying cycle and
allows for media
priorities (quantity
discounts, preferred
locations, etc.)

Cost efficiency of
advertising only during
purchase cycles, may
allow for inclusion of
more than one medium
or vehicle with limited
budgets, weighting may
offer more exposure and
advantage over
competitors

All of the same as the
previous two methods

Disadvantages: Higher costs, potential
for overexposure,
limited media allocation
possible

Increased likelihood of
wear out, lack of
awareness, interest,
retention of promotional
message during non-
scheduled times,
vulnerability to
competitive efforts
during non-scheduled
periods

Not required for
seasonal products (or
other cyclical
products)

Table 2. Advantages and disadvantages of scheduling methods (Belch & Belch, 2011,
p.354)

Continuing with factors concerning the third phase in the process of development and
implementation of media strategies, marketers must decide whether to have their
message seen or heard by more people less often (reach) or by fewer people more often
(frequency). These trade-offs between reach and frequency need to be considered with
regard to the marketing objectives. The important issue is to find out if there is any
overlap where a part of the target audience has seen an advertisement twice, known as
duplicated reach, possibly resulting in an overspend if not considered.
Gross Rating Points (GRPs) is a summary measure of reach multiplied by the
frequency, and is commonly used as a reference point for media objectives. This
element aims to maximise the budget by reaching the target group with a frequency that


17

is best suited to accomplish the media objectives in the most efficient way (Belch &
Belch, 2011).
In developing media strategies, marketers must consider creative aspects and mood
factors, since viewers perceptions of advertisements might be affected by the context of
the medium in which the ad is placed. Certain strategies might require specific media,
e.g. TV might be more effective in generating emotions because it provides both sight
and sound (Belch & Belch, 2011). As a result of rapidly changing marketing
environments, marketers may need a degree of flexibility in their media plans in order
to adapt strategies to changing circumstances, such as market opportunities, market
threats, media availability, and changes in media or media vehicles (Belch & Belch,
2011).

Budget considerations are the last factor in this phase that marketers need to look after.
In order to explain the relationship between communications budgets and
communications effects, sales response models have been developed to show to what
extent sales respond to advertising. However, sales response also depends on a number
of other factors, e.g. price and distribution strategies, product range, marketing
environment, and competition. Therefore, the establishment of a communications
budget based on such models is not optimal, since the effects of communications
activities on sales cannot be isolated from the other variables influencing the sales
response (Pelsmacker et al., 2010).
As a result, companies often tend to make use of less relevant, but more practical and
easier budgeting methods, such as inertia, arbitrary allocation, affordability, and
percentage of sales. Other, and perhaps more relevant alternatives are the competitive
parity method, where companies analyse their market position and decide on their
share-of-voice correspondingly, or the objective and task method that requires more
strategic planning and investment analysis. This latter method differs from others
because it starts with communication objectives, and the resources needed to reach these
planned goals, and then all needed investments are added up leading to an overall
communications budget. The difficulty of this method lies in the estimation of how the
different communications actions and tactics impact upon profit. This requires some
effort and often final costs of an action are difficult to foresee (Pelsmacker et al., 2010).
From a theoretical standpoint, the objective and task method seems optimal to use with
the possibility of leading to improved decision making and more efficient budgeting.


18

However, many marketing practitioners might actually refrain from utilising it because
of the complexities involved in implementing such a method. There are of course
various other factors that may influence the communications budget, and therefore it is
in a companys best interest that marketers stay alert and are prepared to adapt budgets
to suit changing circumstances.

Evaluation and follow-up is the last phase in the process of media plan development. It
is necessary to assess how well the strategies applied achieved the media objective, and
how well the media plan contributed to the reaching the overall marketing and
communications objectives. If strategies were successful then they should be used in
future plans, if not it is important to analyse what went wrong in order to improve the
outcome. However, the measurement of a media plans effectiveness does have
limitations, since evaluation procedures are not foolproof. Nevertheless, sometimes it is
possible to show that a plan has worked in relative terms (Belch & Belch, 2011).
The important decision in media planning is which media and vehicles to purchase,
when and at what price. The steps of media planning are many and, after assessing the
communications environment and describing the target audience, media objectives have
to be set and media vehicles have to be selected and bought (Pelsmacker et al., 2010,
p. 296). Media objectives such as the frequency in which the target group or audience is
exposed to the message, as well as the reach or weight of a campaign are criteria in
which the strength of the campaign is evaluated. Media selection is influenced by
qualitative criteria, such as image-building capacity, emotional impact, demonstration
capacity, quality of reproduction, and technical criteria, including production costs and
media buying characteristics (Pelsmacker et al., 2010).

2.5. Factors and trends
Everyday consumers are faced with an abundance of media choices, such as digital
technology or the Internet, making it increasingly more challenging for marketers to
grab consumers attention. For firms promoting products or services the media planning
process is receiving more attention because of the cost of advertising time, typically
accounting for 80-90 percent of the advertising budget (Donnelly, 1996). Furthermore,
more attention is being paid to integrating marketing communications, with the purpose
of combining many advertising media. According to Marshall (2011), advertisers need


19

to adopt a multi-media approach in order to reach and engage potential customers by
utilising a combination of media that reflect the behaviour and preferences of the target
group. Even though targeting has always been a fundamental requirement and skill in
the process of media planning, todays digital landscape allows for greater precision in
defining and reaching target groups (Marshall, 2011).

But how do advertisers navigate in a more diverse media world where media is
becoming more fragmented and the definition of media channels has expanded to the
degree that new categories have been created? The challenge is to sort out and find the
right media that suits the brand strategy, objectives, and other media selection of the
firm or brand. According to a recent study concerning current practices in media-
schedule evaluations for both offline and online media, traditional exposure-based
criteria such as reach-and-frequency distribution remain important and often are used
in evaluations of offline media schedules. For online media, however, a majority of
agencies rely on qualitative assessments followed by cost-based criteria or Internet-
specific measures (Cheong et al., 2010, p. 403). Clearly then in todays complex
landscape media planners seem to be steering clear of sophisticated empirical criteria
and relying instead on non-quantifiable factors such as instincts, experience, or the
feel of a medium. Furthermore, there is an ongoing discussion within the media
planning field as to whether the Internet should be treated as a separate and unique
medium that requires its own models (Danaher, 2007) or whether it should be
integrated into prior media models that have encompassed the noninteractive media
(Cannon, 2001) (Cheong et al., 2010, p. 414). According to Cheong et al., about half
of media planners neither use a reach- nor frequency-estimation models to plan online
media, and they have a clear desire for models that can specifically address the
Internet in their parameters, whether in the form of Web-only models or integrative
models (Cheong et al., 2010, p. 414).

There are other indications that media planners lack models that can integrate online
and offline media. According to Bakht (2008), tools can help planners to better
understand media habits, but, media planning tools tend to focus only on media
demographics, leaving out psychographic variables, such as personality, attitudes, and
lifestyle. Furthermore, these tools have a tendency of being too generic and are often of


20

variable reliability depending on the medium, for example many managers are yet to
come across a good tool that measures digital (Bakht, 2008).

In 2006 the ad trade body, Incorporated Society of British Advertisers (ISBA), went to
work on the issue of a cross-media planning tool in collaboration with media agencies
and broadcasters. According to Mike Hughes, ISBAs director-general, there was a clear
need for measuring systems that not only looked at the gross impact, e.g. the reach and
frequency of a campaign, but the net impact or extra benefit of using digital, or any
other advertising medium. Hughes added that in case of a universal media planning tool
cant be created, then currencies and exchange rates between the different media might
be set up, allowing marketers to make trade-off decisions on where they spend their
money (Matthews, New ISBA director-general calls for cross-media planning tool,
2006).

Amongst the collaboration partners was the Institute of Practitioners in Advertising
(IPA), the UKs leading trade and professional body for advertising, media and
marketing communications agencies. The IPA had at that time recently launched
Touchpoints Integrated Planning system, a multi-media planning tool for the advertising
industry by combining audience measurement systems for advertising from TV, print,
radio, outdoor, cinema, target group index (TGI) surveys, as well as three new (at that
time) simulated measurement tools for direct, SMS, and online marketing. According to
IPAs research director Lynn Robertson, Most advertisers are using six different
communication channels and most tools have a single media base. This system creates
one single auditing base for all combinations of media channels (Matthews, IPA's
multi-media planning tool launches, 2006). Ed Ling, a strategy development director at
the digital agency I-level, believed that Touchpoints would offer advertisers another
reason to go digital. Furthermore, he said that Budgets are controlled from an offline
point of view, and this system should give planners a better lens on whats happening
across every platform for the first time (Matthews, IPA's multi-media planning tool
launches, 2006).




21

2.5.1. Online audience measurements
The change to the media landscape has made it harder to measure audiences within and
across various media platforms. Media sources need to provide reliable audience
measurements, if they are to continue to be attractive to advertisers. With the expanding
availability of media channels, resulting in an ever-increasing media and audience
fragmentation, it becomes harder to accurately measure the value of advertising
campaigns. In addition, platform devices and the rapid adoption of digital technology,
such as smart phones, tablets and web-enabled TVs, means that now more than ever
there is a greater need to provide more accurate information about this increasingly
digital audience (ISBA, 2012). According to ISBA, research firm Kantar is working
with Google in the UK on building a panel that will measure TV and online media
habits from a single source. The aim is to provide advertisers with a planning tool that
allows them to benchmark the reach and footprint of a campaign running across both
TV and online, and help them to understand how to leverage spending between TV and
the Internet, as well as what impact this interaction will have upon the consumer. Data
and measurement analysis should become available to the industry by 2012 and would
come from a single source rather than by fusing together two sets of data. Google has
discussed its initiative with all of the UKs major trade bodies involved in media
measurements, and will look at how its initiative can complement others, such as the
IPAs Touchpoints (ISBA, 2012).

2.5.2. Return On Investment (ROI)
In a cover story in Advertising Age, a survey of CMOs and other marketing executives
found that more than half of them dont establish budgets according to ROI measures.
Two-thirds of respondents base their budget decisions on historical spending levels,
whereas one-fourth relies only on gut instincts, with the rest not basing a majority of
their spending decisions on any metrics at all. Despite the growing data about
marketing, especially those generated by digital and social media, these results with so
many respondents not including any financial outcome when defining marketing ROI
are surprisingly primitive. Furthermore, the survey indicates that approximately a fifth
of marketers use the most basic measure of brand awareness as an indicator for
marketing ROI, without necessarily determining even whether the awareness is positive
(Neff, 2012). According to Don Sexton, a marketing professor at Columbia Business
School, many marketers feel they dont have the right information and that their


22

companies do not adequately collect or share data. Sexton finds it disturbing that such a
large proportion of marketers do not use financially related metrics, and he believes that
many simply do not have any clear idea of what marketing ROI is. Digital and social
media have the least developed ROI measurements, even though 85 percent of
marketers use social networks in some way only 14 percent of them have any kind of
financial metrics tied to it. However, more established digital media, e.g. e-mail
marketing, is more likely to be evaluated based on financial impact. According to David
Rogers, executive director of the Brite program at Columbia, the underlying assumption
that digital media is easier to measure, because of the vast amounts of data attached, is
wrong since it is unclear what it really measures and data cannot be easily linked to ROI
yet (Neff, 2012).

3. Research design
This chapter is to provide a description of the research design, development and
methods applied in the thesis.

The main purpose of our research is to gather information about the decision making
concerning media plans in medium-sized and large Icelandic firms, and to map out the
whole process executed by marketing managers and media planners within these firms.
Research here includes detailed information about the contents of the process, and our
goal can be described as a search for a common thread that describes the process as a
whole. In addition, parts of the decision making process will be further explored during
the analysis. The authors decision to focus on the marketing communications, media
planning and the related decision making processes is due to a number of reasons. The
foundation is the authors interest in marketing communications, primarily the way
marketing managers decisions related to the choice of one way to convey messages
over another can have a significant effect on the overall turnover of a product or service.

There is no information available about this within the Icelandic market where the topic
has not been a subject of any research, as the authors search for literature discovered. A
focus on the Icelandic market is also partly related to the authors Icelandic origins, as
well as their connections and knowledge of the market. This market has many of the


23

elements that make it suitable for investigating - many international brands operate here,
and its small size makes it less complicated to analyse. Secondly, the authors
experience with working on the Icelandic market and therefore their ease of access to, in
some respect sensitive, information was important.

The authors interest was also to investigate up to what point and how new media, e.g.
online media, is used in the communications mix and media planning in combination
with traditional media. Finally, from our perspective it is interesting to analyse how
firms in Iceland are incorporating professional media planners into their decision
making process and the overall marketing communications.
Annual research conducted by Capacent (2012) examines the outlook and trends of the
Icelandic advertising market, as well as insights from marketing managers regarding
which media they believe to be the most effective in the Icelandic market. When taking
a look at the results, presented at the annual marketing conference of the association of
Icelandic Marketing Professionals (MARK), a clear inconsistency presents itself when
comparing the opinions given by marketing managers on media effectiveness to actual
media usage figures from Statistics Iceland (see Figure 1 & Table 1). This inconsistency
is very interesting to examine and has not been researched on the Icelandic market, this
discovery made the subject matter an extremely relevant topic for the authors during the
development stage of this research. In addition, to confirm the importance and relevance
of the topic, informal interviews with a marketing manager, a media planning
professional, and an experienced media sales person on the Icelandic market were
conducted and used as indicators as to which areas should be emphasized.
The theoretical approach is a snapshot study or analysis of state and process at the time
of the research where the data collection can be described as, a different manifestation
of the expertise, which exists in a particular field at the time of the research in
interviews and compare them to one another (Flick, 2006 p.142). This approach is
suitable and in context with the purpose of the research as described before.
Furthermore, semi-structured telephone-interviews were used as explained later in this
chapter.
To investigate a decision making process like this, it is also dependent on the amount of
information an interviewee is willing to give due to the competitive situation and often
highly sensitive information involved. The outcome of our research is therefore


24

influenced by how much sensitive information the interviewee is willing to share. The
choice of data collection was based on the most intuitive and efficient way of gathering
high quality data. By using the snapshot approach, even examples from earlier times can
affect the main data or the interviews with marketing managers and media planners
(Flick, 2006). For this instance, the authors expanded the scope by including a case on
effective marketing communication strategies with the purpose of extending the
understanding of the interviewees data. The case chosen for the analysis has been
rewarded for effectiveness in media planning and decision making and is expected to
provide another perspective in order to strengthen the potential outcome.

The method for data gathering and analysis is executed in a similar way for the
interviews to make the findings comparable. The case is analysed and its influential
parts defined and the main parts that are comparable with the main interview data drawn
out to be able to investigate any similarities. In addition, other parts that make this case
effective are defined and discussed.

Variable decisions are made from the beginning where marketing managers initially
decide on conveying a message and to the point where this whole process can be
evaluated. There are different ways to go about decision making, and variable sequences
exist as to how these processes are executed; which makes this research more
complicated and difficult to standardise. The choice of a qualitative research method
and semi-structured interviews was to a large extent based on the need to discover all
the elements within the media planning process, especially when it came to
incorporating newer and less researched media vehicles in this context. The benefits are
that the interviewees have the opportunity to elaborate on their answers, thus leading to
a deeper understanding of the ideology or procedures (Flick, 2006). The complexity of
the decision making process requires asking more detailed questions to explore the
reasoning that lies behind the action and therefore a quantitative approach would not be
as effective.

Qualitative research methods for this research has many advantages, and the semi-
structured nature of an interview provides the interviewee with the possibility of asking


25

another questions which give a deeper understanding of the subject matter and elements
at hand. In addition, the relatively low number of marketing managers and especially
media planners means that such a method is well suited because of its interactive nature,
which is impossible to obtain through quantitative research. The main disadvantages of
qualitative research is that it can be time consuming and difficult to find people from
highly competitive markets, in this case marketing managers and media planners, that
are willing to divulge often confidential market information (Flick, 2006). When
organising the semi-structured interviews the authors had to take into the account that
there are two interview groups, i.e. marketing managers and media planners. Interviews
with media planners were scheduled after the interviews with the marketing managers,
as it allowed the authors to become more familiar with the overall media planning and
decision making process of marketing managers. This knowledge enabled the authors to
ask the interviewees more suitable counter questions. The disadvantages of interviews
in general as a research method is related to the time-consuming nature of the process
and instances when the interviewees are not willing to participate and/or the number of
interviewees is insufficient. This method can be time consuming, and in many cases, it
might be difficult to obtain a sufficient amount of participants (Flick, 2006). In addition,
the Icelandic market is not a large market, and despite the small sample size, it can
actually cover a large proportion of the total turnover in media expenditures.

Telephone interviews were chosen for the research in order to save time and keep
expenditures down, this is also the easiest and most effective way since the interviewees
were located in a different country. Iceland is a small country with a population of
approximately 318,000 (Statistics Iceland, 2012), so the number of marketing managers
and media planners is not that extensive. This means that members of this community
are well-known to each other and may be unwilling to share too much information that
might possibly end up in the hands of competition. This can be a very hindering
condition and time consuming in the interview process. Utilising telephone interviews
conducted from another country creates a perception of certain distance between the
interviewer and the interviewee; the authors assumption is that such distance creates
more trust and openness during actual interviews, this kind of arrangement should work
well for the Icelandic interviewees since the interviewer is not working on the Icelandic
market and therefore does not pose as a competitive threat. The main disadvantage of


26

telephone interviews is that it is difficult to sense other things besides the wording and
tone of the interviewees voice, e.g. facial expressions and body language (Flick, 2006).
Other ways to gather the data could be through e-mail interviews, but that is more time
consuming process, since only a few questions can be sent at a time, and then after
having received answers to those another batch is sent and so forth, therefore not as
effective for this purpose (Flick, 2006).

3.1. Interview process
The selection of interviewees is often time consuming, and it can be difficult to obtain a
sufficient number of candidates to talk about the media planning and decision making
process. When choosing the Icelandic market the authors had clear expectations about
how to contact marketing managers and how many would possibly accept the interview
offer, through the authors network in the Icelandic market. An unknown variable to the
authors was media planners willingness to be interviewed about their working
processes. To secure the significance of the data, a minimum amount of ten interviews
from the group of marketing managers was set as an objective, and to get as large
proportion of the markets media planners as possible. The results concluded with
twelve interviews with marketing managers in medium-sized or large firms and five
from the group of media planners, including many of the biggest media planning
agencies on the Icelandic market. To encourage participation of marketing managers, an
informational website was developed with all the vital information about the project.
The website did include a registration form where the managers could register their
name, phone number and a preferred time for contact (Appendix 3). An invitation to
participate was sent to possible interviewees in an e-mail together with a link to the
website (Appendix 3). Two versions were made of the invitation - a formal invitation to
those the authors did not know, and a less formal one to marketing managers that the
authors knew personally. These two versions were then adjusted and distributed to
media planning professionals.

To secure interview quality it was important to get participants representing both
medium-sized and large companies. The authors used their own network to establish a
preliminary list, and added to it all the marketing managers that could represent
different kinds of companies, derived from a list of the biggest companies in Iceland


27

(Frjls Verslun, 2012). In addition, contact was made to a sales person at one of the
largest media outlets in Iceland who provided additional contact information for a
number of marketing managers that are responsible for the media planning and buying
at that respective medium. Invitations were sent to twenty three marketing managers
and seven media planning professionals, of which respectively twelve and five
accepted. It was clear from the beginning that it would be both difficult and time
consuming to find more than ten valid interviewees, so the preparation and sampling
method needed to be effective. The snowball sampling technique was partly used, that is
we asked some of our interviewees to name one or two marketing managers that might
be willing to participate in a project like this, with little results. In many cases the
interviews went over the given time limit so there was no time to ask for assistance in
the sampling process.

The development of the interview guide used in the semi-structured interviews was
important to ensure that all aspects and ideas are included. Early on in the research
process the outline for the interview guide was in place and after that it was built upon
as the project developed. The interview guide is the foundation for the primary data
collection and therefore it is important to have a well constructed interview guide. A
pilot test was used to secure the quality of the interview guide. After the pilot test minor
changes were made mostly regarding the structure of the questions and a section was
added for those managers that have used a media agency but are not doing so any more.

The interview guide was written in Icelandic in order to obtain the best flow for the
questions and then translated to English for the purpose of this thesis. It was necessary
to develop three different versions of the interview guide depending on whether the
company that the marketing manager worked for utilised a media planning agency, or
an advertising agency with media planners, or not, and to take account of whether the
firm has worked with media planners before.

In the first question of the interview guide (Appendix 2) the interviewee was asked to
go through the steps and processes involved in developing media plans, i.e. from the
beginning to the end of how and why they construct the marketing communications of


28

their product or service. This question was key, since the goal of our research was to get
the interviewee to talk about a firms internal processes, and therefore provide both a
good overview and understanding of the companys characteristics, and guide to how to
proceed in the following questions.

The initial idea was to ask the interviewee to draw a timeline of the steps involved in the
media planning and decision making process. But after discussing the pros and cons, the
authors decided that the modest time limit of 30-60 minutes meant that they themselves
should draw up the timeline so the interviewee instead could focus on the discussion at
hand.

Both authors had a role during the interviews - one acted as the interviewer and the
other transcribed and served as a guide to when previously discussed topics were
referred to later in the interview. In some cases the interviewee was asked to go over the
media planning process again or parts of the process in connection with other issues,
which often resulted in a different sequence of the process elements as an outcome. This
approach made the interview more streamlined, focused, and saved time of asking some
questions again, even though some question were asked again in order to delve deeper
into some specific topics.

After the first question, the interviewer had a better idea of the media planning and
decision making process used by the company, enabling the interviewer to ask or probe
with more understanding throughout the rest of the interview. Some questions were
deliberately devised to follow-on from the first question, e.g. if in the first question
there was no information given concerning budget issues, the authors would ask the
interviewee later to provide information about budget issues. This information must be
consistent with the answers from the first question. In instances where there was some
inconsistency another question was asked to clear the issue. A good example of this is
when an interviewee says that he provides the media planner with a budget for airing for
certain periods but mentioned only the setting of objectives and not budgets.



29

There is a fine line between normal probing, where the interviewee is persuaded to
tell everything in a friendly manner, and not compromising the structure of the
interview guide and perhaps the honesty of the interviewee, e.g. if an interviewee
responds to something just because the interviewer brought up that specific subject. The
authors were well aware of this difficulty in the interview process since one of the
characteristic of the group is that many in this business are usually good storytellers and
are willing to spice up a good story.

Summary of the research design:
Research approach Qualitative
Research methodology Snapshot method
Data gathering method Semi-structured interview
Method administered through Telephone interviews
Number of interviews (Marketing managers) 12 (spanning 40-60 min. each)
Number of interviews (Media planners) 5 (spanning 40-70 min. each)

3.2. Tools used in the research process
The authors decided on some work procedures and tools in order to increase their
efficiency and performance. Drawing from prior experience the following tools were
chosen.
For initial brainstorming, research and idea visualisation the online program
Mindmeister (mindmeister.com) was used, which is specifically designed for such tasks.
Google Drive, an updated version of the old Google Docs platform, which allows many
individuals to work in the same document online at the same time, was used to
collaborate all writing efforts and storage of the thesis, enabling both authors to work in
the same document simultaneously. There are other solutions available, e.g. Microsoft
Word, but the collaboration part is not as effective and therefore Google Drive was
chosen. Then Microsoft Word was used in the end to insert all sources and finalise the
layout.
Dropbox, an online backup and file sync and sharing solution, was used to store all data
online so that both authors could have access to all documents with comments, and also
as an online backup tool in addition to Google Drive.


30

All of the interviews were conducted through Skype which is a VoIP telephone, Voice
Over Internet Protocol, computer program that allows calls over the Internet on landline
rates, with the benefit of directly recording the conversations in a digital format. This
was of great help during the interview process, both with respect to timesaving from
recording and also keeping costs down for the telephone interviews.
Digital transcription audio player software, Express Scribe with pedal, was used in the
process of transcribing the interviews, handling the audio along with the transcription
process worked well, e.g. slowing it down to transcribe in real time, without always
stopping. This definitely saved a lot of time since the interviews totalled approximately
12 hours. In the coding process the mind map was used to find keywords and phrases
which were then setup in a spreadsheet within Google Drive, including comments and
direct quotations for each question and each interviewee along with a summary of all
the interviews in one sheet. Other programs for this purpose were explored, e.g. Nvivo
from QSR international and ATLAS.ti, but they seemed to be too complicated for our
purposes since the data was only from one source: interviews, instead of many sources
such as interviews, observations and video. However, investigating all these different
options had a very positive influence on the data evaluation process and was a
determining factor for data examination.

3.3. Data gathering and analysis
3.3.1. The Icelandic market
In order to understand the external market conditions in which the marketing managers
and media planners have to operate in, the Icelandic market is now explored and
explained both from the perspective of the companies investigated, media agencies and
advertising agencies.

In 2011, the total amount of firms operating in Iceland amounted to 62,000, of which
34,000 were private limited or partnership companies (Statistics Iceland, 2012).
Approximately half of the 62,000 are other kinds of companies that are not necessarily
categorised as normal companies on the Icelandic market, and that is needed to bear in
mind in a research like this, since they most likely do not advertise and therefore would
not have any media planning considerations.


31


Icelandic advertising agencies and media agencies
The Society of Icelandic Advertising Agencies (SA) consists of eight agencies, seven
advertising agencies and one media agency. There are a number of other agencies in
Iceland, but members of SA, along with two others outside the society, have the largest
turnover estimated at approximately 1,65 million EUR (256 million Icelandic kronas)
(Frjls verslun, 2012). It is difficult to estimate the total number of agencies in Iceland,
but sources suggest that approximately 100 is not far off, depending on the definition of
an advertising agency, that is whether an individual making an advertisement for a
single party is considered to be an agency, or takes a broader perspective to an
advertising agency with a larger turnover. SA defines an advertising agency as a
service company in the field of marketing and advertising in the broadest sense that
serves companies and organisations with promoting products to consumers (SA, 2012).
The media agencies are in most cases owned by the advertising agencies with only two
exceptions, Mediacom and Birtingahsi. Mediacom is one of worlds leading media
agencies (Mediacom, 2012) with branches all over the world including Iceland.
Birtingahsi was founded in 2000 by some of the largest advertisers with the aim of
increasing the professionalism in media planning; it was the first agency to exclusively
specialise in that field in Iceland.

The Icelandic media market
To give an idea of the media market, the authors will give a brief overview of the media
landscape in Iceland. There are three mainstream TV stations and one smaller, non-
mainstream operating in Iceland. Of the three mainstream TV stations, one is owned by
the government, broadcasts on an open frequency, and receives income from annual
fees and advertising, the other two are regular subscription channels with advertising
slots.

Print media is an interesting market in Iceland with a long tradition and many
opportunities to reach the target group. The market has three daily newspapers and one
of them was established in 1913 with a rich tradition of being considered a very reliable
media. In addition, this establishment operates one of the most popular websites in


32

Iceland, mbl.is, as an extension of its newspaper. Many other print media have also
extended to online websites with a significant increase in advertisements being placed
on these sites. In addition, there are number of weekly and monthly magazines
published that focus on specific target groups. In the media market there are ten radio
stations and a few secondary stations that do not have the same reach as the others, but
are instead more focused on specific target groups.
Given the total amount of media outlets in Iceland it is possible to say that this is a
relatively simple market compared to other countries.

3.3.2. Findings and interpretation
In this section, interviews are described and some key elements defined. The
interviewees are made up of two groups - twelve marketing managers and five media
planners. All describe their process of actions and decision making relating to media
planning. The interviewees companies are defined based on the market they operate in,
but to protect their identity on this small market full details are not included. For
example, for a company on the market a foreign producer can either be considered as a
supplier or producer of a small brand on a worldwide scale or a large international
brand. The interviewees represent many of the worlds largest brands and large
Icelandic brands operating in the Icelandic market.

The decision making and media planning process
Marketing managers perspective
As described earlier, the first question of the interview concerned which elements
and/or resources make up the decision making and media planning process. The authors
define the word process hereafter as the whole decision making and media planning
process, from before the decision of communications is decided and until the outcome is
evaluated. The first three processes that are chosen, from the twelve interviews with
marketing managers, are considered by the authors to be most descriptive processes of
decision making and media planning for medium-sized and large companies in the
Icelandic market, from the perspective of the other processes involved. In addition,
these three processes can be described as having a holistic overview from the
perspective of the other interviews, even though the elements within the processes are


33

not essentially the same or in the same order. These processes are each described as a
whole, followed by a description of each of the main elements within the processes.

Process #5
The interviewee works for foreign producers in the Icelandic fast-moving consumer
goods (FMCG) market.
The first interview being selected from the group of twelve was number five, it was
chosen because of the manager's holistic overview of the whole process and the decision
making phase was clear.

Marketing plan long-term >>Analysing and research >>Positioning >>Marketing plan short-term
>>Media agency informed >>Media plan >>I nvestigating the outcome

Those above are the most descriptive elements that are to be described and explained
below.
The interviewee has a revolving three year marketing plan to build on and his first step
is to analyse the strategic imperatives of the product. Because of this revolving nature, it
is hard to pinpoint the beginning or where investigating the outcome ends and analysis
for new imperatives begins. This analysis and research is more or less an ongoing
process of tracking a brands health; market share, brand image, frequency or
awareness; as well as finding if there is something lacking with regard to the
relationship between the brand and the consumer. Following this means the positioning
of the brand is compensated to take account of these issues. Finally, the long-term
marketing plan is updated or short-term created with this focus. In some cases the
strategy comes from the foreign producer along with the material or advertisements to
achieve these objectives.
The next step is to inform the media agency about these issues, target groups and the
goals at hand. At this stage, the interviewee emphasises the importance of the objective
and never mentions an actual amount of money on the table to reach the objectives.
Monetary values draw attention away from objectives, since the more a firm buys the
greater the discount, and the danger is that the media agencies might be inclined to
overspend. If the brand or company needs to produce advertising material that is always
done before or at the same time as the media agency is informed, since sometimes new


34

ways or new forms of media need to be considered. After, and if production is needed,
the media plan is constructed and then sent to the interviewee which he then reviews,
looking to see whether the plan fulfils the requirement set forth by himself, e.g. whether
the placement of the advertisement is situated close to the prime purchase time in the
buying cycle. The company usually uses continuity when it comes to media scheduling
methods, but in the case of a new product or new brand, the objectives might be
modified towards more intense airings of the advertisement in order to get more
attention. Using all media is sometimes a necessity in order to be able to cut through the
clutter.
After the media plan is accepted, the media agency sends it to the respective media
outlets. As earlier mentioned, analysis and research is an ongoing process, and so, in
some cases new objectives need to be added to the analysis and research plan. The
interviewee mentions that many figures are examined. For example scanner data sales
figures are received monthly, internal sales figures daily, tracking of various objectives
and imperatives of the brands all year round. You would like to pre-test the
advertisement, put the plan in action and see exactly how many see the advertisement,
and see the response on that, but it is not that perfect (Interviewee 5, marketing
manager).

Process #10
The interviewee works in the fast-moving consumer goods (FMCG) market and has
some dealings with foreign producers.
The second interview selected from the group of twelve was number ten. It was chosen
since the decision making phase was clear and visual, especially with regard to the
media planning process.

Marketing plan long-term >>Target group definition >>Brand positioning
>>Media agency informed >>Media plan >>Allocation of marketing budget

The interviewee starts by dividing his products into three categories A, B and C.
Category A is both above- and below-the-line. The interviewees definition of this is
that the brands falling into Category A with above-the-line advertising referring to


35

placements in some, or all media, and below-the-line may involve more discreet or local
offers, such as in-store promotions. Category B brands receive below-the-line
advertisements, but in addition, they might be advertised somewhere as with above-the-
line, but in more limited fashion, e.g. in a single magazine. Finally, Category C brands
only receive below-the-line treatment and are in no way advertised in any kind of
media, instead they are supported with some price promotions and in-store activity. This
categorisation makes the process of the media planning more focused and is part of the
long term marketing plan.
Before this process, brands are defined and knowledge about the target groups,
positioning and likes are in place. When all the brand elements and issues are defined
and the one-year marketing plan is complete, the media agency is informed; then if
there is a perceived need for advertisement production, that is the next step in the
process.
The interviewee does not use measurements for evaluation, instead preferring to use
metrics in relation to sales goals, or learning from the mistakes of each campaign. This
is first and foremost about return of the investment. If I can not show some result of the
investment, this is just cost. (Interviewee 10, marketing manager).

Process #12
The interviewee works in the consumer market with some contact with foreign
producers.
The third interview selected from the group of twelve is number twelve. It was chosen
because of the clear view of the decision making steps, a visual order of the media
planning process and finally, the interviewee comes from an interesting market.

Marketing plan >>Analysing and research >>Brand positioning >>Creative brief
>>Media agency informed >>Media plan >>I nvestigating the outcome

In this case, the media planning process is within an advertising agency and one expert
in media planning handles all the plans for the interviewees company. The interviewee
starts with a creative brief that includes analysing the target group and the market,
setting up the objectives and which ways to pursue these objectives. The creative brief
is designed carefully and people from the advertising agency, the media planner, and


36

marketing and sales department all contribute with some input into this process. In
addition, the budget decisions assigned to the project versus the length of that project is
an important element to take into account. The creative brief can change during the
process and its objectives can be sales oriented or connected to brand health. Here the
assumption is made that there is some kind of an ongoing marketing plan from the
interview data, but the importance on the creative brief is high in the process.
Since the media planner and the advertising agency are involved in the creative brief
they have been informed, and if there is a need for advertising material then the
production is started. Next is the media planning process, the plan is sent to the
interviewee for approval and thereafter the plan is sent to the respective media by the
media planner. An investigation of the outcome is summed up into a marketing
dashboard that combines both sales objectives and real-time sales figures, online media
objectives with tracking of the online process such as clicks and online purchases, as
well as other metrics. This is then used as the foundation for the next campaign or
planning process.

To sum up the main phases from these processes in order to give some indication of
what it could look like and it is important to look at each of the process elements from a
wider perspective. The common media planning decision making process for marketing
managers could look like this:

Marketing plan >>Analysing and research >>Positioning
>>Media agency informed >>Media plan >>I nvestigating the outcome

In order to establish a more precise idea of the meaning of these concepts, the authors
will define the frame for each concept. Marketing plan is the regular definition of a
marketing plan but widely defined, document with a summary of objectives to reach, in
some cases up to a three year plan, but in other cases one year or even only certain
periods. Analysing and research could range from a single research and analysis to
many where people are asked questions about certain products in order to gather
information about usage and consumption, which can be useful in the marketing
process. In addition, other kinds of data, e.g. scanner data or sales figure from stores and


37

supermarkets, and internal figures, e.g. sales figures, are utilised as well. Positioning is
perhaps a rather narrow concept for the next element in the process but to continue with
the terminology used by the majority of the interviewees, this was the concept to use
and is considered a broad term for positioning the product on the market with the
objectives that need to be communicated to the consumer. Media agency informed is
self-explanatory but in some cases the advertising agency is also informed at the same
time and the strategy regarding for example media, sizes and/or length of the
commercials decided. The construction of the media plan and confirmation by the
marketing manager underlies the concept of Media plan. Investigating the outcome
comes last and refers to any researches made afterwards to confirm that the objectives
have been reached. In some cases this step is closely related to the analysis and
research, and when used on a more continuous basis it becomes difficult to see when the
analysis and research process begins and the investigation of the outcome ends.

All three, and in fact all interviewees, have some kind of a marketing plan, ranging from
a three year long-term marketing plan with the more common being a one-year
marketing plan, with some using creative briefs that follow the project throughout the
process, and in some instances it can be difficult to see where the marketing plan ends
and the creative brief begins for those that mention both. Most of the interviewees have
a marketing plan, sales objectives and a plan to reach the objectives.
Prior to setting the objectives, many of the interviewees analyse the market and or the
internal figures, e.g. output from their own systems. Many interviewees also research
scanner data from stores, in FMCG market, on a monthly or quarterly basis. In addition,
fewer measure other factors that relate to the brand and the brand health, e.g. brand
recognition, or tracking some specific cues or connections between brands and
consumers. However, in some cases, some kind of research is involved in the beginning
of a working relationship between the interviewee and the media agency, and/or
advertising agency, in order for an agency to get more familiar with the brand before
developing any media plans. Most of the interviewees used some resources from the
agency in the research phase and received some kind of analysis from it as well. Then at
this stage, if any advertising material is needed it is produced.
After the analysis and research phase few informed the media agency if that had not
been done already. Then the media planner constructs the media plan which is then


38

subsequently sent to the interviewees for inspection and adjusted if needed.
Interviewees on the FMCG investigated if the advertisement was close to the purchase
cycle and if the TV shows selected fitted the brand image. After accepting the plan, the
media agency sends the plan to the respective media for execution. At this stage, only a
few perform an analysis of whether the objectives have been reached, other than sales
objectives. Those who investigate the outcomes more closely are, as mentioned earlier,
constantly tracking the brand health, so where the pre-research ends and investigating
the outcome begins is sometimes unclear.
Many of the interviewees are in some connection with foreign companies and it is
different as to how much influence that has on the process. In some cases the whole
platform is provided, from the market plan and down to the GRP. In many cases part of
the marketing budget is provided by the foreign company and the ratio differs between
companies. In some instances the foreign company reserves the right to confirm parts of
the process, e.g. approval of TV commercials or the GRP to reach for certain periods.

Outliers
Even though the twelve companies have partly common processes that are possible to
identify as one, there are many outliers that need to be addressed. One of the elements
that can affect the whole process is if there is no relationship between the interviewee
and media or advertising agency. By moving directly from a marketing plan and to a
direct contact with the media themselves in some cases also reduces the research and
analysis process. There was only one interviewee who was not using any agency; and
another who was using an agency before, but is now buying directly from the media
outlets.
Only one interviewee claims that he is not measuring the outcome with some research
company, instead only relying on internal sales figures, and the reason given was that
the sample size was too small and the research was therefore too unreliable.
One of the interviewees mentioned the importance of having the airings close to
consumers purchase cycles as one of the things to look for before accepting plans from
the media agency.





39

Media planners perspective
The other group of interviewees are the five media planners that give their perspective
on this process by answering a similar set of questions that the marketing managers
were given.

Since the media agencies in Iceland are not that many, and the data indicates strong
similarities between the interviewees with regard to the processes, the decision was
made to display only a single process. The deviations will be addressed separately in an
outlier section. The following process is common for all the media planners
interviewed:

Media agency informed >>Analysing and research >>Positioning
>>Media plan >>I nvestigating the outcome

As mentioned in the marketing managers section, it can vary at which stage in the
process the media agency enters the process, depending on the marketing managers
routines. In most cases a marketing plan for one year is ready, and some kind of
motivation, e.g. some objectives to fulfil, new products, or continuous airing of an
existing product. Then the media agency is informed and in the cases where the
advertising agency and the media agency is in the same company, or some cross-
ownership exists between those two, usually the advertising agency is also included in
the first meeting. In cases where the media agency is independent from an advertising
agency, calling in the ad agency usually depends on the scope of the project.
In the next phase the marketing manager, the media planner, and sometimes a person
from an advertising agency review, research and analyse data and market conditions.
This process also includes the overview of the creative brief from the marketing
manager and/or updating that document. Yes, we try to figure out what the objectives
are because that is important information, and those objectives can not always be based
on sales goals. Advertisement in isolation doesnt sell, like someone said. We draw the
attention to things, for instance, the good old AIDA model (Interviewee 16, media
planner). If the positioning is clear, the attending people at the meeting are informed
accordingly, but in some cases the attendees decide on the positioning of the brand. The
next phase is the media planning process but if there is any production of advertising


40

material it takes place before this phase. One of the interviewees said that if we come
into the project when the production is finished, our hands are a bit tied down
(Interviewee 13, media planner), and the possibilities to think of for example sizes in
newspapers and lengths in TV narrow the opportunities that exist in order to maximise
the return on marketing investment.
The first step in the media planning phase is to decide on what GRP is needed to
achieve the predetermined objectives for pre-decided target groups in the most efficient
way. Many of the media planners talk about trying to find new methods and ways that
suit the project (Interviewee 17, media planner); this often includes online media to
find the best and most effective media to achieve the objectives. In addition, some of the
media planners mention the importance of investigating the time of purchase and the
purchase-cycle in order to match that in the plans. The intervieweess all say that the
amount of research depends on the scope of the project and the client: some clients
simply come in and state: we want to have a newspaper ad in Frttablai next
Tuesday (Interviewee 16, media planner); whereas other clients, such as
telecommunication companies and banks, utilise their media agency to employ
continuous measurements, e.g. top of mind, in addition to themselves conducting a lot
of research, which they then share with their agency (Interviewee 13, media planner).
When the plan is ready the marketing manager reviews and approves it and then it is
sent to the media.
All media planners interviewed are buying the majority of the standard data available in
relation to the market, e.g. media measurements, in order to support them in developing
the best possible media plans. Furthermore, in order to be able to analyse the market
from different perspectives, media agencies buy an assortment of data other than the
standard ones to give them a better insight into the market, the most important data
source denoted by most was a survey concerning consumption habits and lifestyles.
That data gives us the opportunity to find target groups that consume a specific
product and for example watch certain TV shows (Interviewee 16, media planner).
The interviewees in most cases talk about some evaluation process or investigation of
the outcome, but that also depends on the size of the project and the client involved.





41

Outliers
The process is rather unified when looking at it from media planners perspectives but
there are still a few exceptions that are important to look at in more detail.
One of the interviewees mentioned two models: first their own model that they have
made for the process (the authors tried to get access to that model but without success),
and the second model the interviewee talked about was the AIDA model. This was the
only instance of any models or frameworks related to marketing that were mentioned in
the whole interview process with both groups, which is quite interesting.

To sum up the processes from both the perspective of marketing managers and media
planners gives an indication of what the media planning process could look like in the
Icelandic market amongst medium-sized and large companies. The common decision
making process derived from both groups can be seen in table 3 below.

Marketing managers Media planners
Marketing plan Media agency informed
Analysing and research Analysing and research
Positioning Positioning
Media agency informed Media plan
Media plan Investigating the outcome
Investigating the outcome

Table 3. Comparison of the media planning processes from marketing managers and media
planners.

Firstly, most of the marketing managers state that media planners do not have much
effect on the marketing plan that is decided before contacting the media planners. This
also corresponds with most cases from the perspective of media planners. One of the


42

main differences is that media planners in their interviews talk about analysis and
research, but according to the marketing managers, most of that work is already done
before contacting the media agency. The exceptions are if the marketing managers do
not have long-term marketing plans and are in need of more assistance regarding the
researches, analysis and strategies for the marketing plans, which a media agency could
help with in many cases.

Case of effective media planning process
Given that the objectives usually range from plain sales goals to complicated
measurements of components within satisfaction levels, and everything in between, it
can be complicated to determine the level of effectiveness of decision making and
media planning. However, to give some indication of an effective decision making and
planning process, one case is explored and illustrated. Once a year The Icelandic
Marketing Association that includes both marketers and people from advertising
agencies, hosts a festival were the best advertisements from the previous year are
awarded. The competition is especially tough between the advertising agencies and
there are many categories to compete in. One of the categories is the most effective
campaign, similar to IPAs Effectiveness Awards often known as the Effies. The
authors managed to get a hold of such a case to widen the perspective of the process
regarding decision making and media planning.
The product is a consumer brand, number two in market share and was losing market
share rapidly, and according to the interviewee, the marketing manager, measures
needed to be taken to turn this downswing around. At the same time the producer was
changing packaging, which needed to be communicated to the consumers so the
producer offered a certain amount of the product at a reduced price.
After the marketing department had decided that actions, more drastic than normal
marketing activities, were needed for the product, a meeting with the advertising agency
was established. The agency started with researching and analysing existing data, e.g.
scanner data and internal sales figures. In addition, top of mind and share-of-voice were
examined and the outcome was that the top of mind was very high but, as the
interviewee mentions, the buying behaviour was not following the top of mind
measures. So the plan was to strengthen the connections between top of mind and the
purchasing phase.


43

This agency has a media agency within the firm and prior to the production of the
advertisement it was decided to use online media, i.e. web-banners, as a support to TV
advertisements. The online media was used to recall the television advertisement, by
playing a part of the ad within the banner. In addition, some newspaper and magazine
ads with the characters from the television advertisement was also used to recall it. One
of the media planning goals was to focus more on contingency for a longer period rather
than air the advertisement heavily for shorter time. An example of the campaigns
media plan for a single TV station can be found in Appendix 6.
The sales rose dramatically and actually went over the expected goal in share of the
market. The goal was measured in scanner data and sales figures and it should be noted
that this market is very difficult to change because of the nature of the product.
The interviewee says the main reason for this success and the fact that this campaign got
the effectiveness award was because the various components fitted perfectly together to
form a unified whole. New packaging, promotional price reduction, well planned and
executed campaign with good media mix were all parts of this success. To demonstrate
this process it could be drawn up this way:

Media agency informed >>Analysing and research >>Positioning
>>Media plan >>I nvestigating the outcome

Media agencies vs. in-house media planning
Marketing managers perspective
The majority of the interviewees use media agencies for their media planning purposes,
with the exception of only two that do their own media plans in-house and one of those
had used an agency before. The main reason most managers stated behind their choice
of using a media agency was that they were getting professional services by experts
with specialised knowledge in the field of media planning and buying. A few mentioned
that getting the service for a reasonable price and the possibility of minimising the
hassle of dealing with media salespeople were amongst the reasons for choosing a
media agency. However, a few mentioned that they were not in favour of the media
commission system used by media agencies in which they earn rebates from media
outlets as a percentage of their customers spend at the specific medium, interviewee 5
feels that ...if you are paying for these services this [commission system] is not a good


44

way to conduct business. (Interviewee 5, marketing manager). Furthermore, the media
commission system was mentioned as one of the main reasons why an interviewee
chose to stop using a media agency, as well as he felt that they were not delivering on
their promises and he was not getting better prices through them, We just decided to
try to do this ourselves for a few months and I just got much better deals by dealing
directly... (Interviewee 1, marketing manager). In addition to these reasons, which can
also be considered as benefits of using a media agency, marketing managers stated
another important benefit to be time-saving both with respect to doing the actual plans
as well having all the invoices go through the agency and minimising the inconvenience
of having media salespersons approaching managers directly. It was also mentioned that
media agencies should be able to offer customers impartial consultation with regard to
media plans in contrast to media outlets which can hardly be considered unbiased when
presenting the latest rating figures for their respective outlet (Interviewee 2, marketing
manager).

When asked about what media agencies could do better or improve upon many
marketing managers felt that media agencies should pay more attention to developments
in the media landscape and changes in media consumption, this was mostly mentioned
in relation to the Internet and social media. The younger generations are highly affected
by these ever evolving habits, ...there are changes happening with specific generations
that are more or less dropping out of regular media consumption, they only watch
shows online, download everything they need, do not watch television, do not listen to
radio, so they need to check this out. I know they are following this but they need to
improve on where to reach the target audience (Interviewee 5, marketing manager). In
addition, some mention that media agencies lack better working methods and discipline,
especially with regard to long-term plans, as well as better measurements on the
effectiveness of media placements. However, there are quite a few that are pleased and
do not feel that media agencies need improve upon anything. Those managers who do
their media plans in-house mention that they could improve upon planning longer
ahead, measuring results, doing more market research as well as paying more attention
to online media (Interviewees 1 & 4, marketing managers).



45

With regard to whether those who use media agencies entrust them solely with their
media planning and placements, or whether they deal with something in-house, it is
clear that a majority of companies manage some elements themselves in-house. Those
elements mostly include placements that fall outside the traditional media environment,
e.g. Then there are all kind of things that we just manage ourselves, we do a lot of
outdoor advertising ourselves, rolling signs, football fields as well as smaller print
(Interviewee 9, marketing manager), and direct marketing material that are sent on a
regular basis to large part of households, ...so they [media agencies] have not been a
part of that since it isnt exactly rocket science, if you plan on sending to all households
then it is relatively simple (Interviewee 3, marketing manager). In addition, quite a few
managers supervise sponsorships themselves, such as broadcast and events, with some
turning to media agencies to get their professional opinion on the value of the
sponsorships in question. Most managers say that more than 90 percent of their
media/advertising budget goes through media agencies whereas some say that only one-
third goes through them.

Marketing managers had various answers to the question how the process was if they
would like to use online media in their media plans, either supervised by themselves or
the media agency. A few state that there is no specific process taken into account when
including online media but most managers acknowledge that they are using online
media more than before, but often only in support of other media placements. One of
the main concerns they expressed about the use of online media was that measurements
are still lacking and incomplete, and consequently managers being unable to grasp
exactly what they are doing online. Everyone is talking about it today, but somehow I
havent seen anything happen yet. A lot of clever things are happening now, production
of fancy web-banners amongst similar things and I have not yet seen any measurement,
i.e. realistic measurement. A standard which you can compare with other options.
(Interviewee 10, marketing manager). Many managers have been overseeing their
online activities themselves but some who are using media agencies are in the process
of handing that responsibility over to them as agencies are becoming more skilled to
deal with the online media. A few managers state that the online media is under-utilised
as an advertising medium.



46

The information flow between marketing managers and media agencies is diverse and
some of the main elements managers mention to provide agencies with in order to assist
with their media planning are objectives, target groups, own research, brand positioning
and market share as well as strategic plans. Some mention that the agency is provided
with every possible information needed, with the exception of budgets, since they
believe that media plans might skew more upwards when a specific figure is present, I
always get them to make a suggestion of the most effective solution, I dont tell them
that I have an x amount but instead I say that I need to reach a specific frequency or
specific reach for this period. (Interviewee 3, marketing manager). With regard to
what information managers request from media agencies, besides actual media plans,
most mention access to consumption and lifestyle polls, as well as other research and
surveys. Share-of-voice is also being requested and only a few mention brand awareness
and advertising attention, with some call for being simply informed about specific
offers. However, there are quite a few managers who state that they do not ask for any
specific information from the media agency.

With respect to any effects from cross-ownership between media and advertising
agencies on business relations or conduct, managers either stated that they only saw
positive things come out of such a relationship, or that there was no effect at all.

Media planners perspective
Most of the media planners said that the majority of their customers had their lions
share of media planning through their respective media agencies, although interviewee
17 said I do not prefer that managers cut the umbilical cord to media completely
(Interviewee 17, media planner). However, in relation to sponsorships there are still
companies that prefer to do it themselves and in those cases the clients often turn to the
agencies in order to evaluate the sponsorship in question. The reasons for clients
withholding some things such as sponsorship for themselves are various, such as some
specific deals the client might have with media outlets that need to go directly through
that company, or clients might be offered some specific last-minute deals by media
salespersons that they might grab without consulting their media agency beforehand.
The media planners say that if a client does indeed want to withhold something for
himself that does not have to be a problem and they usually figure out a way to get these


47

things to work for everyone. However, in some cases those clients might not be offered
the same access to some of the research and data that media agencies offer their full-
time clients, but as interviewee 15 puts it ...it is a very thin line, this is such a small
market that perhaps you might not need that extensive data to back up your decisions.
However, it is very strange to employ media agencies and not take advantage of their
full service. (Interviewee 15, media planner). The main concern media planners have
about clients not taking everything through the media agencies is that there is a high risk
of losing sight of the full perspective if agencies are not informed of the specific
placements that fall outside their area of responsibilities. If clients do not inform media
agencies about these placements, the agency does not have the possibility of taking
those placements into account in their media plans and therefore the agency might be
overspending on media on behalf of the client; for instance, if a client takes a last-
minute offer at a good price that placement might not be adding anything to their media
plans that might be working effectively as is. Therefore, media planners emphasise that
in such cases they should at least be informed of them in order to account for them in
plans. To put this dilemma into perspective, if a media planner only has 70 percent of
the placements then he only has 70 percent of the whole picture, when it comes to
advising, if he does not hold all the pieces of the puzzle, his consultation becomes
poorer by that same margin (Interviewee 17, media planner).

From the perspective of media planners, the information flow between clients and
media agencies is diverse as well. With respect to information marketing managers
provide agencies with, the majority of media planners say that they receive budgets.
However, some mention that in some cases clients do not want to inform them of
budgets beforehand and are only looking for the agencys idea about what it takes to
make the idea work, and in those cases they usually only state objectives they have in
mind. Here is an example ... it could well be that a client knows he has one million and
then he gets back our calculations which state that he only needs 750 thousand to
achieve those results. But if he had told us that he had one million then theres always
the risk that you go higher even though you dont need to. (Interviewee 17, media
planner). Amongst other elements provided by marketing managers are target groups,
market share, sales figures, AC Nielsen figures, objectives, research, as well as basic
information about the product or service, and knowledge about the market situation.


48

This information can vary a lot, It can be everything from just a phone call: hey we
need to put something in the air, and up to getting a relatively detailed brief. But I
believe the other is more common, just a phone call, much more common. (Interviewee
14, media planner). Media planners also mention that the length of the working
relationship with a client also has an effect as to how much information is needed
because if there is a long-standing relationship, agencies might not require as much
detail in general as would be the case for a new brand that might require some basic
foundation to work from. With respect to what information marketing managers request
from media agencies, it is primarily reach and frequency, along with price information
that most media planners mention. Amongst the price related requests managers are
asking for are costs-per-thousand (CPM), price information to gain some kind of price
perspective and what can be considered a good or bad deal, as well as just wanting to
know that they are getting the best discounts available in the market. Interviewee 14
adds But what has been the main driver after the financial collapse is just price, what
does a whole page cost, how am I in comparison with others. This started taking control
for some time. (Interviewee 14, media planner). Marketing managers also ask for
share-of-voice, access to consumption and lifestyle surveys, research, media ratings, and
even target group analysis.

When asked if there was any specific process when clients wanted to use online media
in their media plans, most media planners stated that online measurements are still
lacking and incomplete, especially with regard to demographic information, and
therefore it is often difficult or even impossible to integrate it with other media into a
holistic plan. However, one media agency has on its own self started testing and
measuring online media with respect to demographic variables in order for them to
improve their planning capabilities, and in cooperation with a market and media
research company they are developing coordinated measurements for online media that
should be available to other agencies next fall. Some mention that the online market in
Iceland is not that complicated because of its limited size, If this is a very general
target audience we have specific influence online, we have mbl which has 300 thousand
IP numbers, and vsi, dv, pressuna [online news media vehicles], which are all media
with over 200,000 IP numbers, so we can safely assume that a better part of the nation
is dropping by there. (Interviewee 13, media planner).


49


The main benefit of using a media agency, in media planners opinion, for clients was
that they were getting access to professionals with specialised knowledge in the field of
media planning. Other important elements mentioned were a holistic overview and
media plan with optimised and integrated media solutions, time-saving, decrease of
hassle from media salespersons and service for lower cost than doing it on your own. In
addition, clients get access to huge amounts of unbiased data, or at least less biased than
from the respective media outlets, that has been combined with various significant
information that can be critical for media planning. Here is a media planners
perspective on this, First of all, this is a complicated market that marketing
managers at companies are not thinking about on everyday basis. They do not have the
tools and techniques to calculate for example reach and frequency. They do not have
the comparison of prices that we have from multiple customers. They do not have time
to talk to all the media, and they should not have time for that. Here we of course have a
few people that are working on all this together. (Interviewee 16, media planner).
However, interviewee 14 put this in a different perspective Of course in such a small
country like Iceland you can put your finger up in the air and do it with roughly 60
percent accuracy. (Interviewee 14, media planner).

In relation to whether media planners felt that agencies could improve upon anything a
few mentioned that they felt the need for some kind of an association of media agencies
that could both work on issues concerning standards of practice as well as acting as a
unified front for their members relating to various matters in connection to their
practices. This association could perhaps also be responsible for education for the
market in relation to media planning affairs. In addition, some mentioned that
measurements are imperfect and too dependent on media outlets that should be required
to have more professional work ethics and data, in a perfect world, I would prefer that
media agencies bought the research data but not the media. We are dependent on the
media paying for up to almost 80 percent of measurements on themselves and on the
data we receive and that is not an ideal situation. (Interviewee 13, media planner).
However, interviewee 14 does not agree with this viewpoint and he feels that media
agencies are performing quite well and that agencies have extensive knowledge, data,
tools and techniques to work with. He says, this is a very small market, it is very


50

condensed, nowhere in the world could you put a whole-page ad in a paper and
tomorrow 60 percent of the population have read it. (Interviewee 14, media planner).

When asked if media planners saw any effects from cross-ownership between media
and advertising agencies on business relations and/or conduct, they saw both positive
and negative effects arise from such a relationship with some also saying it had no
effects. On the positive side the main elements were mostly related to practical aspects,
such as for clients only having to go to one place for everything, and that both agencies
were more easily kept up-to-date in case of any unforeseen problems arising in the
process. In addition, media planners are included earlier in the process, often before
production, which is often a major advantage ...we have often given advice on what
media options might be most suitable, right from the start. (Interviewee 13, media
planner). On the negative side it was quite apparent that the most unfavourable element
media planners mentioned was the stronger likelihood of more advertisements being
channelled to print media because of the amount of graphic designers that are employed
by advertising agencies that need their fair share of projects. Here is a perspective in
relation to this dominating negative aspect, It is this separation between ad production
and media planning that is extremely important, and the negative aspect is of course
that there is always a risk that the media planner has a tendency to offer advice that the
placements should go to newspapers, magazines and places where they know it requires
more or a lot of design. Thereby creating projects for the ad agency that owns them.
(Interviewee 17, media planner). Furthermore, And if you are to produce a TV ad you
have to take that production elsewhere outside the ad agency. Then the graphic
designer is left behind chewing on his pencil. So the advertising agency naturally has a
lot of influence on those media agencies they control. (Interviewee 14, media planner).

Decision making
Marketing managers perspective
In relation to who are involved in the decision making concerning media plans it is not
surprising that all interviewees mention marketing managers and brand managers as the
primary candidate, with the majority of the respondents falling into either category.
Mostly all of those who use a media agency mention them as being involved as well, the
only exceptions being interviewees that only use an agency for specific media vehicles


51

while overseeing others themselves. Many managers also mention the marketing
director as a participant in this decision making where he often consults on important
matters that need his specific attention and where he has the final approval over the
managers decisions. A few mention the CEO as a participant as well but he is mostly
involved to the same degree and for the same reasons as the marketing director. Only a
few mention an advertising agency as an active participant in media planning decision
and some mention input from foreign suppliers or global headquarters they have
connections to.

When asked about how much influence media and/or advertising agencies, as well as
any other outsiders, have on the media planning decision making, most managers said
that media agencies have a lot of influence on this decision making. A few said that the
advertising agency had a lot of influence but some also said they had no influence on
these media planning decisions.

With respect to the choice of advertising media and whether it can be influenced by
prior use, some sort of habitual decision making, most managers said they take their
media choices up for review regularly but their prior choices might influence their
current media selection. Many mentioned the small size of the media market in Iceland
playing a large part in this influence, where there is a limited amount of media to choose
from and therefore there might be a tendency to use the same media repeatedly. Some
also mention that long-term deals with media outlets may have an impact on this
habitual trend.

Marketing managers use a variety of tools and techniques in order to make good
decisions and the majority use their own internal sales figures as well as some sort of
research in order to support their decisions. A few mention AC Nielsen figures, market
share, share-of-voice as well as other tools and techniques from their media agency.
Amongst other tools and techniques mentioned were other surveys, brand tracking,
reading and listening ratings, dashboards, supplier idea bank, as well as just plain old
experience and gut feeling. In a related question with regard to how important
managers own judgment and intuition is in decision making, many said that it played a


52

large role, especially where there was some lack of knowledge and research which is
often the case with sponsorships. Some also mentioned the size of the Icelandic market
having an impact on this and therefore managers own instincts play a larger part in
such a landscape.

How marketing managers determine how to split their advertising budgets varies a lot
with many methods receiving a mention, such as percentage of sales, what it takes,
based on previous experience. Managers also mentioned that this often depends on the
status of the brand in question where there is often need for an over-investment for new
brands in order for them to take-off, which might be a bit skewed in the first period and
then getting better aligned as the brand matures. Interviewee 1 notes that often the
advertising budget is the first item to be cut when costs are being trimmed Everything
needs to fit within the same budget. It is often hard to cut down on expenses. Then
advertisements very often become the victim of the cutting knife. (Interviewee 1,
marketing manager).

The ratio between advertisement placements and their production costs varies quite a bit
where many managers say that airings range from 80-90 percent, and production from
10-20 percent; a few say that the split is roughly two-thirds in airings and one-third in
production; and some say that it is close to an equal split where interviewee 6 stated the
following in relation to domestic and smaller products this split mostly relates to the
year when production occurs (Interviewee 6, marketing manager).

The companies that have online sales were asked if they used any specific tools or
techniques for research to support decision making and most of them used Google
Analytics as well as some A/B-testing. Some mentioned search engine optimisation
(SEO), tracking, dashboards as well as Google Display Network.

Media planners perspective
From the media planners viewpoint the parties that participate in the media planning
decision making are for the most part marketing managers and media agencies with
some mentioning advertising agencies as well. In addition, the media outlets play a role
as well, mostly with regard to having the last say on price and placements if that has not


53

been agreed upon beforehand; they are the last link in the chain before the plan is put
into motion (Interviewee 17, media planner). To what extent these various parties have
an influence on the media plan decision making differs a lot but they are all said to have
some degree of impact, mostly depending on the working relationship between the
different parties, and are often influenced by the duration of those connection as well as
different degrees of trust between them. The general opinion was that the clients or
marketing managers always have the final call in these decisions, but because of their
varying interest and knowledge of media planning they are usually very open to the
suggestions they receive from these outside parties. With respect to how much influence
the client has on the choice of media it differs a lot ranging from some taking no interest
in that choice, leaving that to the discretion of media agencies, to others wanting to have
a say in it. Those managers who are more actively engaged in that are often somewhat
influenced by politics and refrain from placing their ads in some media that might be
connected in some way to the wrong person in their opinion, or a media that has put the
respective manager or company in a bad light, as well as some being controlled by long-
term agreements with specific media outlets that might dictate their media placements.
There are too many marketing managers and also people in media agencies that plan
based on their own subjective opinion and they feel that this show or this newspaper, or
this and that is better than something else. There are way too many irrational decisions
in this line of work. In both ways. (Interviewee 15, media planner).

When asked about the media planners opinion on what tools or techniques they believe
marketing managers use to make good decisions many mentioned internal sales figures,
research and share-of-voice. Also, market share, AC Nielsen figures, media rating
figures, lifestyle and consumption surveys, budgets as well as focus groups were
mentioned. With regard to how important media planners believed that marketing
managers own judgment and intuition plays in decisions making, the common view
was that it was quite important and in some cases too influential.

The question whether marketing managers lacked any tools, techniques, methods or
knowledge in order to improve the plans media planners make and if they had an
adequate understanding of those plans, the answers were of varying sorts. Some believe
that managers lack the knowledge of media planning terms and how to use them, most


54

have grasped cost-per-thousand (CPM) but only a few understand frequency, reach and
GRP. Interviewee 13 says, This knowledge is insufficient and little has been done to
improve upon it, there are not many professional lectures concerning media planning
held for people in Iceland. Now there is some trend to import men who speak highly
about Facebook and other social media but it is so easy to buy quick solutions where
there is no education to challenge it (Interviewee 13, media planner). Furthermore, he
states that an association of media planners could have this kind of professional
education on their agenda, if it were to exist (Interviewee 13, media planner). In
addition, a lack of time, interest, and trust are also mentioned, as well as the lack of
similar access to data on media outlets that media agencies have, so managers would be
better equipped to evaluate and understand media plans and the arguments for each
placement. General knowledge and education of marketing managers is for the most
part considered to be good enough, but interviewee 16 disagrees: he believes that
general knowledge of marketing is inadequate and he has rarely seen a detailed and well
thought out marketing strategy, which he believes can be traced back to marketing
managers not making use of marketing plans and internal data from their operations
(Interviewee 16, media planner).

With regard to how marketing managers establish how to allocate their advertising
budgets, media planners believe that it differs a lot. Some suspect that managers check
last years budget and make a decision based on that, others determining the budget
from what it takes to reach some specified objectives, as well as some assume that in
too many cases managers are just handed a budget to work with. Percentage of sales is
also mentioned, We havent found any research on how this split is made, we found
discussions about it being approximately 3-5 percent of turnover. But there is nothing
concrete on that, I would take a wild guess that it is 3-5 percent... (Interviewee 13,
media planner). Demands from foreign suppliers or global headquarters were also
mentioned as a possibility for influencing budget allocations.

According to media planners, the ratio between advertisement placements and their
production costs differs, but it usually ranges from 66-80 percent for airings and 20-33
percent for production costs. However, they also note that this ratio can skew a bit more
towards production for smaller companies that have limited budgets in the year of


55

production, where the productions costs can rise up to 50 percent but then the ratio
evens out if the ad can be used again in the following year.

With respect to what tools and techniques media planners use for research they are more
or less using the same tools such as Portable People Meter (PPM) measurements for TV
and radio, newspaper and magazine ratings, consumption and lifestyle surveys, as well
as other specialised measurements from market research companies. Some media
planners believe that TV and radio are being over-measured through these electronic
measurements, compared to the small size of the market, which is too expensive, its
like driving a Rolls Royce when you only need to go to the store. (Interviewee 14,
media planner). The newspaper measurements are considered to be too subjective and
therefore they do not serve as a good indicator of the readership of specific elements
within the newspapers. In spite of that the measurements are extremely stable and media
planners do not have any reason to assume that newspaper readership in Iceland is
changing that much (Interviewee 13, media planner). With respect to online
measurements the only available metrics in the market are coordinated web measures
that track web usage through IP-numbers and list the most popular sites based on clicks.
The media planners mostly agree that the absence of more detailed information, such as
demographics about online media, are the main measurements that are needed on the
market in order to improve planning. They mention that this is being researched and
tested and hopefully it will be finalised soon (Interviewees 14 & 17, media planners).
One of the more important tools the media planners use in conjunction with the media
measurements is the consumption and lifestyle survey by Capacent, in which they can
analyse 1500 different variables which often proves helpful in finding out preferences of
a target audience. When looking at clients that have online sales and whether media
planners are using any specific tools to research that some mention Google Analytics,
A/B Testing and Google AdWords amongst the tools used; some state they use all these
tools together as well as some additional measurements.






56

Advertising media
Marketing managers perspective
Most companies have a presence in social media, e.g. Facebook, either with a single
company page or multiple pages for their various brands. Some mentioned advertising
on Facebook but no other social media was referred to.

When asked about their opinion on advertising effectiveness of different media and how
they would rank them in descending order, managers answered very differently but
many stated that it can differ according to brands, messages and target groups. Some
mentioned that radio often tends to be underestimated, and newspapers are very
effective for many in retail, such as supermarkets and grocery stores. However,
interviewee 6 found this question to be flawed and said, You cannot answer this
question, you cant say that any one media is most effective. It depends on the objectives
you need to reach and the brands target audience... (Interviewee 6, marketing
manager). Even though some managers stated it was a difficult question to answer in
general, most of them gave the answers from their perspective with regard to the
variable mix of products they were dealing with. Almost every manager put TV in the
first place as the most effective advertising medium in their opinion, followed by
various assortments of other media. In a similar question concerning real use of the
different media, TV also scored highest with most managers and is therefore used the
most by the respondents. The actual use of the different media differed for more than
half of the respondents from their beliefs of effectiveness.

There was a similar split between the answers to the question of whether salespeople
from media outlets had any influence on the managers choice of advertising media or
not, that is to say that salespeople were either considered to have some influence or not
on their media decisions. Interviewee 5 said that media salespersons only had influence
on them with regard to broadcast sponsorships and events, but he found it to be
important to stay in contact with them to be kept in the loop ...because you want to
keep first right of refusal, you want to stay in good contact, want to know what is hot
and what is coming and be able to grab some opportunities but then you also just want
to do it professionally so with regard to where we are placed in what shows, they have
no influence on that. (Interviewee 5, marketing manager).


57


When looking at an annual survey by MARK and Capacent where marketing managers
are asked the same question on their opinion on what is the most effective advertising
media, and comparing that with actual usage of those media, there is a clear discrepancy
between what managers believe is the most effective media in their opinion and how the
actual split is. This was also evident when comparing the effectiveness ranking against
actual usage where more than half of respondents differed there between. When asked
about what could be the reason behind this discrepancy, managers said the main reason
in relation to TV is that even though it is considered to be the most effective medium,
the costs of producing such advertisements are high, as well as time consuming, and
therefore acts as a barrier since not all companies have budgets that can bear such
expenditures, even though they would prefer it. The image and effectiveness of TV
advertisements are highly regarded and some managers state that TV advertisements are
much better looking than, for example, newspaper ads since TV is a much more fun,
visual and lively medium. Interviewee 11 believes that this discrepancy might be more
aesthetically grounded from the difference in media characteristics, That people
choose TV rather than anything else, despite them eventually placing more in
newspapers, is simply because the reactions to those ads are so strong. (Interviewee
11, marketing manager). With respect to the difference in newspapers, marketing
managers also mention the budget aspect in the sense that even though managers
believe TV to be the most effective, they do not always have the budget to go into TV
production, and therefore, they often tend to place ads in newspapers instead, which is
often easier to get approved in case of superiors participating in decision making. In
addition, the lack of long-term planning and discipline often present in Icelandic
companies, along with the simplicity of placing ads in newspapers, perhaps only with
one day in advance, versus the more complex and more time consuming process of TV
ads may have an effect on the great use of newspapers (Interviewee 5, marketing
manager). Some managers mention that the influence of media salespeople has an effect
here, it is often the case that companies have placed an ad in some newspaper and are
then bombarded with calls from other newspapers trying to persuade them to place the
ad in their outlet as well, often offering some special discounts in addition, and it is
often an easy choice for managers that do not have to go into production since they
already have the advertisement ready and can place it anywhere (Interviewee 10,


58

marketing manager). Some managers also stated that newspapers were not suited for
image advertisements because newspapers are filled up with goulash ads, i.e. ads
often deprived of any design from retailers advertising an assortment of goods and
discount prices, which might have a negative impact on ads intended for image building
placed right next to them (Interviewee 6, marketing manager). In addition, even though
newspaper ads can be considered effective for some product categories, such as
retailers offers, some managers say that these companies that buy newspaper ads in
bulk account for a large proportion of newspaper spend in Iceland, and in many cases,
these companies do not even have an acting marketing manager, leading to a lack of
innovation in marketing activities and a limited oversight of the options available in the
marketplace (Interviewees 2, 5 & 6; marketing managers). Quite a few managers
mentioned that a possible reason could be related to the myth about advertising agencies
being more inclined to push their clients into newspaper ads in order for the ad agencies
to produce more and as a result charge their clients more in the process, thereby
skewing the actual usage more towards newspaper as well. The cross-ownership that
exists between many of the Icelandic advertising agencies and media agencies may have
an effect on this element, Cross-ownership between media agency and advertising
agency can have an effect, even subtle ones. They speak very much against this,
obviously, because this is a weakness in their operations but I believe this is a fact. Built
upon their own culture. (Interviewee 10, marketing manager). Some marketing
managers felt that the Icelandic advertising agencies were built up like design
companies with loads of graphic designers that they needed to sell-out in the best
possible way to create projects for them, and the tendency for media plans is therefore
often controlled by the fact that you have some newspaper ads available that you need
to place somewhere (Interviewees 3, 5 & 9; marketing managers). Those managers that
believe this myth to be true all keep their creative elements and media plans separated
from each other, If you take your media plans through an advertising agency then they
simply make an extensive campaign and design many of elements that would be nice to
have and cost a lot and then you end up not using all of it. (Interviewee 10, marketing
manager). However, one manager stated that this myth couldnt hold because
newspaper advertisements were more or less filled with aforementioned goulash ads
that are mostly deprived of any design (Interviewee 6, marketing manager). With regard
to online media, they are considered to be more effective by marketing managers than
the actual usage indicates. Some of the reasons mentioned were that there seems to be a


59

lack of dedicated sales people for that medium in general, leading to less influence on
their behalf on managers media choices, as well as people being inclined to state that
the effectiveness of the Internet was higher than they perceive it to be in order to be
thought of as on top of things and up to date in the digital age. In relation to this reason
was that many managers mentioned that people say one thing but do another in some
way to seem smarter than they are or blend better into a group of peers, It is well
known that marketers are egocentric, saying one thing but doing the opposite, people
often do things out of habit. (Interviewee 7, marketing manager).

Media planners perspective
When looking at advertising effectiveness of different media and how they would rank
in descending order, media planners opinions differed from having an opinion about it,
to stating this question to be absurd and unfair. Those who had an opinion on the
effectiveness of different media all put TV in the first place as the most effective
advertising media, followed by newspapers by most, then either online or radio with
other media coming thereafter. Furthermore, they stated that the effectiveness of
newspapers in second place was probably unheard of in other parts of the world and that
radio was extremely powerful in Iceland as well (Interviewees 13 & 14, media
planners). For those media planners who found the question to be unreasonable because
it could not be answered in general since it depends on the individual projects, what is
being advertised, what the target group is and often you cannot state that any one is
most effective but rather the integration of all the media, it is more a question of what
media can you exclude in a campaign (Interviewee 16, media planner). In contrast,
when asked about what media they utilise the most there was a similar split between TV
and newspapers interchanging between the first and second place, followed by either
online or radio, with other media coming behind. The main reason given for TV not
dominating the top spot, even though many media planners believe it to be the most
effective advertising medium, is that though TV can be considered the most economical
advertising media from a cost-per-thousand perspective, not everyone can afford the
production costs it involves (Interviewee 13, media planner). In addition, the reason
why newspapers are used so much is in part due to the composition of clientele at some
media agencies that have many large retail players that use print more dominantly and
often have whole pages every weekend (Interviewee 14, media planner).


60


When asked if media salespersons have any influence on media planners choice of
media, planners stated that they could indeed have an influence and often too much,
especially regarding persons from any of the larger media outlets. The primary cause for
this is the small size of the market where many people know and trust each other; the
group of media salespersons group tends to be small where many of them have worked
for more than one media and often in all possible outlets. Media planners also say that it
is important to keep the contact with media on a good footing because often planners
need something that is a bit different or something comes up where some flexibility and
slack is appreciated (Interviewees 13 & 14, media planners).

With regard to the discrepancy between what is considered as the most effective
advertising media by marketing managers, from the annual Capacent survey, and the
actual usage, all media planners that had any opinion on the effectiveness of different
media had a different actual usage than their opinion indicated. The majority of media
planners believed that the main reason for this extreme skewness with regard to TV is
the high production costs in relation to TV ads, even though Icelandic marketers sense
the impact of TV advertising campaigns they do not always have the possibility of
utilising that medium (Interviewee 13, media planner). Media planners mention that
even though the effectiveness of TV advertising is highly regarded and the placement
prices are fairly inexpensive in Iceland relative to other parts of the world (Interviewee
15, media planner), it seems that TV production costs act as roadblocks for marketing
managers that are often hard to overcome when justifying to senior management,
despite the gains from higher effectiveness (Interviewee 17, media planner). When
looking at the discrepancy in newspapers where they are used more than marketing
managers opinions of effectiveness indicate, media planners mention several possible
reasons for that such as lack of planning which results in managers often working close
to deadlines and the simplicity of placing ads in newspapers might come in play here as
an easy way out in such situations (Interviewee 15, media planner). What might add to
the skewness of the picture is that a large proportion of what is being placed in
newspapers is not really advertisements but rather notifications for instance
(Interviewee 16, media planner). A part of the explanation might stem from the general
opinion that newspapers are out of fashion, as well as marketing managers not fully


61

grasping how much they are using newspapers in reality and how much impact they
actually deliver for companies (Interviewee 14, media planner). In addition, the
Icelandic market has always favoured newspapers and even though advice from media
planners might skew more towards TV the managers more often than not have a
tendency of preferring newspaper placements, not least when production costs are taken
into account (Interviewee 17, media planner). Some media planners also mentioned the
aforementioned myth about advertising agencies pushing clients more towards
newspaper ads in order to charge them more for design, with the cross-ownership
between many of the advertising and media agencies in the market having an effect on
this. It is interesting to see that those media planners who believed this myth to be true
and having some influence, were representing media agencies that were independent of
advertising agencies, whereas those planners who were opposed this myth were
representing media agencies where some cross-ownership with an advertising agency
was present. Similar to some comments from marketing managers, few media planners
mentioned that advertising agencies are mostly founded by graphic designers that are
primarily able and good at designing newspaper ads, where there is a dominant
tendency to push newspaper ads more in the forefront in order to create more business
for the respective ad agency (Interviewees 14, 15 & 17; media planners). Other reasons
mentioned possibly having an influence on the discrepancy were the egocentricity of
marketing managers as well as utilisation of online media suffering from the lack of
better measurements and research.




62

4. Discussions
In this section the authors will discuss in detail the most essential parts of this thesis and
interpret the findings from the interviews with the objective to gain a deep
understanding of the perspective of the interviewees. These different perspectives are
compared to the related theory and discussed in that context.

The media planning and decision making process
To explore what phases and steps marketing managers go through when deciding and
choosing ways to communicate their marketing strategies, marketing managers were
asked to go through their processes followed by a subset of question. Then media
planners were asked to draw up their process from a similar set of questions. Finally, a
framework from Belch & Belch (2011) was compared to the common processes from
both perspectives.
There are certainly many aspects to consider when looking at the decision making
process that marketing managers go through when planning marketing activities, both in
long-term and short-term. There are always some elements that differ, just as the fact
that the interviewees are individuals that are not exactly alike.

Below is the common decision making process from the interview data from both
perspectives of marketing managers and media planners compared with each other, as
well as the process from Belch & Belch (2011).

Figure 4. Process comparison between marketing managers, media planners and Belch &
Belch.



63

Marketing managers and media planners
The process of the marketing managers was made from the analysed answers from the
marketing managers that were categorised.
The starting point was usually the marketing plan with some issues or objectives that
needed to be addressed. In a majority of cases, research and analysis came next but that
process was though to be different between marketing managers. Those that conducted
research most often did so on a very regular basis, e.g. on a monthly basis throughout
the year, whilst others just conducted them for some specific campaigns or new
products. Those that performed research on a regular basis indicated that their
marketing plan was well supported with research if they needed to answer for their
planned activities. In the positioning phase, the lines were not as clear as in many other
steps of the process. That is partly because media and/or advertising agencies are
informed during different stages of the process, and it seems also to be affected by the
amount of research the marketing manager conducts or controls. It is possible to divide
marketing managers into two groups: A), where the marketing manager did not request
any action from the media or advertising agency until the media plan needed to be
executed; B), the group of marketing managers that want input from the agencies on
earlier stages or directly after the marketing plan. It is difficult to draw any other direct
connections to other element in the external or internal environment regarding these
different approaches. After establishing the objectives and determining the positioning,
the next step for marketing managers is to inform the media agency, assuming that the
A-group of marketing managers is followed. Here the media and/or advertising agency
is informed and at this point the media planners process begins. The research is
presented along with the objectives for the media planner in case of group A, but in case
of group B the agencies may control the research process. Then the next step is that the
media agency constructs a media plan which is then sent to the marketing manager for
approval. There is a difference as to how much marketing managers know about media
planning, according to media planners, and therefore they also differ in how much they
modify a plan. The main issue seems to be in some cases that marketing managers are
not giving the media planner objectives, but rather, provide the planner with a specific
amount of money budgeted for a media plan, e.g. air this TV commercial for X amount
of money. The problem according to many of the interviewees, both from marketing
managers and media planners perspective is the objectivity regarding such actions.
Media planners are usually paid a commission based on the media budget, so with a


64

higher spending the media agency profits more. So if the media planner is presented
with a media budget rather than objectives, which is often the general practice, it is
difficult for the planner to say to the manager that a certain budget is too high if the
planner does not have any objectives to base the media plan upon.
The last part of the process is the investigation of the outcome, an important part that
influences the quality of the plans and the process as a whole. Part of the interviewees
does not conduct any research on the results other than through internal figures, e.g.
usually sales figures and scanner data. This part of the process ranges from only
investigating sales figures to brand tracking, top of mind and others on a regular basis.
As stated earlier, it is difficult to find the beginning and the end of this phase, especially
if the research process is done on an ongoing basis. The benefits for marketing
managers of including media and/or advertising agencies in the process of media
planning and decision making, beside the quality measures, is the amount of
information that flows between the parties, which can be very important as some of the
interviewees mentioned. Especially for marketing managers with only a few in their
department, or sometimes no one to collaborate with on such things, the possibility of
widening their perspectives from other sets of eyes and getting information from other
sources can be extremely valuable.

Case of effective media planning process
The process of the interview with the effectiveness case was in many ways similar to
the processes from the marketing managers and exactly the same as the media planners.
This can partly be explained by the purpose of the particular interview, which was to
identify the specific case, but not the whole process in day-to-day business. This might
have drawn the focus to this case and therefore some steps may have been missing in
front of the process, such as a marketing plan.
In this case, the interviewee particularly mentioned that neither the process of the
marketing communications, nor any specific parts of it were the explicit reasons for the
effectiveness award other than the whole thing somehow fitted together. New packaging
needed to be communicated, the communication campaign was effective, and as a result
of the new packaging the producer offered a good promotional price that resulted in a
competitive advantage for the company in question. All these components integrated
together to provide an extra nudge in order to grab attention and action - sales increased


65

considerably and the market share that had been in a downward spiral turned around and
managed to reach an earlier market share. It is difficult to determine whether the
communication strategy here was effective, or it was the drop in price level, new
packaging, or all these elements combined.

Developing media plan process
The developing media plan process from Belch & Belch (2011) is not far from the
process that the media planners indicated. Aside from the terminology it is almost
possible to state that the processes are identical. The terminology from the interviews
was not changed because the fact that those terms were being used by most of the
marketing managers, e.g. the use of the wording positioning was when the marketing
managers talked about where to position the product. Therefore when marketing
managers and media planners talk about positioning it is a similar description to what
Belch & Belch (2011) describes as the establishment of media objectives, and the same
applies to the description of the other categories or phases. Most of the managers did
not go into detail about reach and frequency, but some mentioned GRP so the
discussion about that in the process was almost non-existent, but media planners only
focus on that was usually to meet the media objectives with no concrete figures being
presented, except if for example the foreign supplier requested a certain amount of
GRP. To acquire certain reach and frequency like the media planners, it depends on
them receiving objectives and partly on the approximate size of the project and the
monetary funds that are attached. Should a campaign grab the attention instantly or is it
intended for long-term image building of a brand? For example, when it comes to
deciding on the frequency and reach there must be a difference between advertising a
one-time event, e.g. music festival, and advertising a high quality car brand that has
been on the market for a long time.
The authors were surprised as to how well the literature from Belch and Belch (2011)
fitted this part of the paper, which confirmed to some degree that most of the media
planners in Iceland are not far from what could be called a normal practice, at least from
the perspective of Belch and Belch (2011).

To sum up the processes both from the interviews with marketing managers and media
planners, as well as the case data and comparing those data sets with each other and


66

then to what Belch and Belch (2011) present as to how developing a media plan should
look like it can be stated that there are many similarities to be found. If the marketing
manager is independent in the research process, that is conducting most of the
researches in-house or not having the advertising or media agency conducting them,
followed by establishing the positioning or the media objectives themselves, then it can
be considered as different to the other processes. In other words, if the marketing
manager has the agencies called in during early stages or right after the marketing plan
is established, then after that both the media planners process and the process from
Belch and Belch (2011) is surprisingly similar (see figure 4). For small or one man
marketing departments it can be valuable to receive second opinions and connection to
media and/or advertising agency that are in connection with many different clients, the
stream of information is high both with regard to new ways to communicate and
classical theories. It could even be important for all marketing managers to have as
many quality sources of information as possible and thereby insuring that he utilises the
best ways to communicate through the best possible media at any given time.

Media agencies vs. in-house media planning
When a majority of the marketing managers use media agencies the question one could
ask is why dont all of the marketing managers use media agencies and what is different
from those that are using a media agency to those who dont?
The clear benefit from using a media agency that most marketing managers identify is
the higher quality and more professional services of experts with specialised knowledge
in the domain of media planning and buying. Some mentioned as well that acquiring the
service for a reasonable price and the possibility of minimising the hassle of dealing
with media salespeople were amongst the reasons for choosing a media agency. In
addition to these reasons believed to be the benefits of using a media agency, marketing
managers also stated that an additional important benefit is time-saving, both with
respect to constructing the actual plans and also to having all the invoices go directly
through the agency.
The rapid change in consumption, especially amongst younger people, is likely to
influence media agencies to pay closer attention to developments in the media
landscape; this was mostly mentioned in relation to the Internet and social media.
However, some interviewees say that while the importance of social media and online
media is apparent, there are no real measurements for that media yet. Marketing


67

managers are going in flocks to seminars concerning online media and metrics to
measure the effectiveness and the ability to integrate online better with media plans; as
clearly stated in the article by Cheong et al. (2010). A measurement solution will
hopefully be presented to the Icelandic market by fall 2012. Perhaps this indicates that
the use of, for example social media, in your marketing communication may cast a high
novelty image factor on marketing managers and the companies, and that alone can
justify this action.

Even though those companies that are utilising media agencies tend to go exclusively
through them, it is clear that a majority of companies manage some elements
themselves in-house. Those elements mostly include placements that fall outside the
traditional media environment, e.g. vehicles in outdoor advertising, rolling signs,
football fields, as well as smaller print often for local vehicles.

Media agencies are performing quite well with respect to the lay of the land and
agencies seem to have extensive knowledge, data, tools and techniques to work with.
This is a small, closely condensed market, and as one media planner said - nowhere in
the world but in Iceland can you put a whole-page ad in a newspaper and by the mid-
morning 60 percent of the population have seen it.
Managers supervise mostly sponsorships themselves, such as broadcast and events, with
some turning to media agencies to get a professional opinion on the value of the
sponsorships in question. The reason for this is that marketing managers do not want to
terminate all relationship with the media even though they are using a media agency.
This is because some of the sponsorships can be exclusive and valuable if the
sponsorship results in a good connection between the brand and the consumer, e.g.
Coca-Cola in the USA wants to connect the brand to music and related activities and so
for example, the utilisation of American Idol can be a valuable and exclusive
sponsorship for the brand.
Many managers say that more than 90 percent of their advertising budget goes through
media agencies, whereas some say that only one-third goes through them. The downside
of having only a part of the advertising expenditure going through the media agency is
the difficulty to estimate the GRP on that and therefore overspending on the behalf of
the respective client can be possible. For example, if a marketing manager decides to


68

invest in a sponsorship, but the media agency is neither informed, nor has the
opportunity to calculate the GRP on that particular sponsorship, the target audience may
overlap, e.g. by means of more frequency, which might lead to overexposure and
overspending.
Most media planners prefer that managers do not cut out the relationship to media
completely, and managers in general agree, they want to know what is new and how the
prices are developing. In addition, some want to be in control of discounts and buying
methods if, for example, they would like to change a media agency. In such cases the
discounts already achieved only move with the company to the new media agency,
whereas such a move might put the companys deals at risk if those are only attained
through the media agency the manager would like to switch from.
To look at how satisfied managers are with the service from media agencies there are
quite a few that are very pleased and do not feel that media agencies could improve
upon anything. Those managers that are doing their media plans in-house mention that
they could improve upon planning longer ahead, measuring results, doing more market
research as well as paying more attention to online media.

To draw out the most important points, the main benefit of using a media agency for
managers was that they were getting access to professionals with specialised knowledge
in the field of media planning. Other important elements mentioned were a holistic
overview and media plan with optimised and integrated media solutions, time-saving,
decrease of hassle from media salespersons, and service for less price than doing it on
their own. Many managers are nevertheless taking part of the hassle themselves to stay
in some control and that is difficult to manage for the media agencies. Marketing
managers trade-off is the trust towards the media agency and control of the media
plans, against compromising the direct business relationship with the media.

The commission system
The commission system has been the medias way in Iceland to reward or attract
agencies; and in some interviewees opinions, has a bad influence on the quality of
plans and the professionalism of media planners. The media gives a percentage of the
total amount of airings in commission to the media or advertising agency. For example,
if a marketing manager orders television airings, the media agency would get x


69

percentage of that amount in commission from the respective media. In some cases the
advertiser, or the marketing managers company gets a part of that back in the form of
discounts. This also means that the more a media agency, for example, airs on a
television station, the more profit the agency gets. According to some of the
interviewees, both from media agencies and marketing manager this problem still exists
and is making the planning process much more difficult, and advertising and media
agencies more objective. Some of the media planners claim that this is not affecting
them, but it is difficult to see how it is not. However, there are some companies in
Iceland that can be sure that this system does not affect them in any way. Few of the
major advertisers in Iceland decided to establish their own media agency in 2000 and by
ensuring that they would get the best possible discount rates, as a result of buying the
largest amount of media placements, obtain a nice way out of the commission system.
Before this event the commission system was not as much out in the open and this just
changed the Icelandic advertising market by establishing this firm, since the
commission's system was rotten and everything was about the turnover of the
advertising agencies and not to maximise the media plan efficiency. The benefit was
clear we got more for the media airings and more for advertising dollars [Icelandic
krona] (Interviewee 5, marketing manager).
One interviewee even said that this was destroying the media business in Iceland and
needed to be replaced as soon as possible. It was possible to sense from some of the
interviewees anger towards this system even though that was not always expressed
explicitly. One marketing manager mentions this to be the reason for his firm not using
a media agency anymore after having used them for quite some time, the manager said
that dealing directly with the media gave them much higher discount and a better overall
outcome. In such cases, the media does not have to give a commission to agencies, and
are perhaps willing to give better prices directly to advertisers because of that. That is
why the discussed importance of determining the marketing as well as media objectives
is even more important than many marketing manager may think, instead of presenting
either media planners or media outlets budgetary figures upfront that might lead to
overspending. Perhaps a better way would be to pay the media agency hourly or fixed
fees in order to somehow take this commission element out of the planning process.




70


Foreign suppliers and the influence on quality
In many of the interviews it was interesting to see how important the relationship
between the company, or the interviewee, with a foreign suppliers affected the quality
of the plans and processes. There seems to be some kind of a connection between how
much the foreign supplier is involved in the planning, e.g. marketing plans and
marketing strategies, and the degree of quality. The higher this involvement is the more
structured and detailed the processes are as a result. One can assume that this
connection can be based on some kind of control by the foreign supplier over the
respective company. This control can exist if the foreign supplier is, for example,
providing parts of the marketing monetary funds and therefore has the ability to decline
and accept parts of these media plans. If the marketing manager needs to demonstrate
how and in what the funds provided are invested in the need to have a detailed plan and
figures to support the reasoning is likely to be higher than if you do not need to prove
your points with figures and researches.
The marketing managers that had the closest relationships, or were very dependent on
the foreign supplier, had a tendency to use more English in their terminology and more
theoretical marketing concepts from marketing communications literature. It is difficult
to determine if this is a direct result from the impact of the relationship between the
foreign supplier and the marketing manager, or if the education and general interest of
concepts and willingness to learn is higher among those individuals or even both. Either
way, this seems to have a good impact on the quality of the research processes,
marketing plans, media plans, follow-up, and the general process as a whole.
This seems to indicate that this interference from a foreign supplier provides necessary
support and more discipline, impacting marketing managers in a very positive way.

Decision making
Decision making in relation to media plans varies a lot, but considering who partakes in
making these decisions it is in essence quite similar from both a marketing manager and
a media planner perspective. Marketing managers together with media planners and
sometimes advertising agencies, for those managers using either party, participated in
the decision making with regard to media plans. Marketing managers usually have done


71

some research and analysis and set some objectives as to what they want to achieve with
their marketing communications before approaching either media planners or media
outlets. This is mostly done in-house by themselves or in cooperation with fellow
marketing or brand managers, as well as getting input from department heads or CEOs
in matters that might require special attention. It comes as a surprise that a couple of
marketing managers using media agencies only use them for a small part of their media
planning while overseeing other things themselves. According to all the benefits stated
by marketing managers of involving agencies for their media planning purposes it
seems strange that some managers choose not to make more use of media agencies
because it only seems rational as the pros seem to outweigh the cons. However, with
regard to those managers that do choose to do something outside media agencies it is
mostly in relation to direct-marketing activities that are broadly distributed and might
not require the expertise of media planners in order to succeed. As one manager puts it,
it hardly requires any rocket science in relation to distributing direct-marketing material
to every household in the country. Advertising agencies are not stated to be critical
players in relation to media planning, but on some occasions they partake in the
decision making to some degree, mostly coming to the table at the same time as media
agencies when there is some sort of cross-ownership between agencies in place or the
scope of the project might require that. This does not come as a surprise with regard to
media plans that should be independent from the actual production in an ideal world.
Media planners often state that they need to come to the table before production takes
place, otherwise the media planning is in danger of becoming restrained to planning
around available material, which might lead to a loss of optimal media plans. The extent
of influence each of these parties have on the media planning decision making differs,
but it seems unanimous from both perspectives that the most influential participants are
the marketing managers and media planners, of course with the final call lying in the
hands of the marketing managers.

With regard to whether marketing managers might be more inclined to choose one
medium over another because they have for instance used that medium before,
managers said they tried to refrain from such habitual decision making by taking their
plans up for regular reviews. However, in such a small market with limited media
possibilities there are only so many options to choose from, therefore it is hard not to


72

choose the same media vehicles repeatedly. According to media planners, there are
many variations of how much influence marketing managers have on media choices, in
cases where they do exert their power, it is often influenced by long-term deals already
in place at the company as well as some politics that might play some role in some
instances. With the specialised knowledge in place at media agencies along with the
extensive data they have on the media market that marketing managers lack, it can be
considered peculiar that managers who work with media agencies try to influence these
media choices. However, this kind of behaviour seems to be declining and media
planners say that this is having less impact than it may have done before.

The tools used by marketing managers in order to make good decisions vary a bit but
most of them seem to be using sales figures, both internal and AC Nielsen, as their
primary input for decision making, followed by some research and surveys. Media
planners opinion on the tools used by managers corresponded with what the managers
themselves had stated to use, with the addition of media planners believing that budgets
often play a larger part than expected. The budget is of course a critical component in
marketing that needs to be taken into account in order to limit expenditures and serve as
some kind of foundation to work with. However, there are often times when the budgets
may take too large of a role in the decision making for media plans, especially for new
products that might require overspending on marketing communications in the first
year/s in order for them to grow. By focusing too much on budgets, these new products
might not receive enough attention and media budgets from marketing managers, which
might actually lead to a lower probability of those products ever taking off the ground.
The role of marketing managers own judgment and intuition seems to play a large part
when trying to make good decisions, especially where knowledge is lacking or it
requires a more subjective approach. Media planners also agreed with this fact - that gut
feelings often play a large role and often can be too influential in marketing managers
decision making. Again, the small size of the Icelandic market was mentioned in
relation to this part as to how it could have an impact on how significant role intuition
plays in decision making. Marketing managers that are not utilising media agencies for
their media plans might be inclined to put more emphasis on their own intuition in the
decision making process since they do not seem to use any specific data or research to
support their decisions, at least not to the same extent as those managers that work with


73

media planners. Of course these managers do not have access to as much data and
specialised knowledge as the others in relation to media plans, therefore their reliance
on own gut instinct is clearly essential. Companies that have online sales mostly utilise
Google Analytics, Google AdWords as well as A/B-testing as their main tools to
support decision making, where Google Analytics does not come as a surprise since that
tool is used for many websites today.

Media planners seem to be using more or less the same tools and techniques for
research to support their media planning, such as media measurements and ratings, as
well as consumption and lifestyle surveys to name a few. Most feel that the current
measurement and rating systems are lacking in some respect, such as newspaper
measurements being too subjective, or too extensive for such a small market as is the
case with electronic measurements of TV and radio. In addition, media planners think
that these measurements are too dependent upon each specific media as they are often
paying for the majority of the measurements on themselves that might lead to a
distorted picture. Some media planners point out that media measurements were better
suited through an association of media planners that would cover the outlays for the
measurements and thereby minimising the danger of skewness towards any media. In
spite of these imperfections noted, media planners still consider these previously
mentioned measurements to be extremely stable and can therefore be considered a
reasonable indicator for the respective media. The main concern media planners have is
that online measurements are inadequate, still relying primarily on popularity through
visits and IP-numbers, and lack comprehensive information on important demographics.
In addition, because of the lack of comparability of online measurements to regular
well-known measurements, such as reach and frequency, it is more difficult for media
planners to integrate online media into their regular media plans. Some mention that
some online measurements are being researched and tested and should hopefully be
finalised and made available to the market by fall 2012.

Many media planners were of the opinion that marketing managers have an adequate
education and general knowledge, but there seems to be some indication that they have
insufficient understanding of media planning terminology. However, one media planner
is of the opposite opinion and believes that general marketing knowledge is limited he


74

believed this was evident from him rarely seeing a detailed and well-designed marketing
strategy. This argument can partly be substantiated from the process findings where a
minority of marketing managers mentioned marketing strategies or plans as a part or
foundation for their media planning process. It is clear that without proper knowledge of
marketing and lack of strategies, marketing managers will not be able to optimise their
marketing investments as they are in some sense steering a ship without any specific
course. It is interesting that some media planners mention the lack of some kind of
association amongst them which would be beneficial to themselves as well as to
marketing managers that might gain from some professional education concerning
media plans that such an association might offer.

The allocation of advertising budgets is based on most of the well-known methods, such
as percentage of sales, but marketing managers didnt want to go into too much detail
with that, which is quite understandable given its sensitive nature. In general the
marketing managers interviewed seem to lack some sort of long-term planning and
budgeting, with only a few managers planning well ahead and therefore being able to
keep a better oversight of their marketing activities than those who do not utilise long-
term planning. Those managers with long-term plans seem to have clearer goals and
concrete strategies of what they wanted to achieve for their products through marketing
communications. Furthermore, they mention that they make budget decisions based on
strategic imperatives for their products and even though they have some ratios, such as
percentage of sales for reference, it is more important to use strategic objectives as
guiding principles. In addition, as touched upon before, there is often a need for over-
investment in products in the introduction stage if they are to grow, whereas well-
established products might require proportionally less spend in order to maintain its
presence in the market place. Therefore, even though using percentage of sales as a
starting point for your budget decisions might be suitable for some companies, it may be
too simplistic for others that need to take more elements into account for those
decisions. A marketing manager mentioned that in periods of downturn it is often a
challenge for managers to secure their budgets as there is frequently a tendency to start
by downsizing advertising budgets. This has most likely played a larger part than before
in the years after the financial crisis where companies cut back on marketing, but this
kind of approach might be flawed as companies might actually gain more by either


75

staying on course, or even increasing their advertising budgets in such times. Some
media planners suppose that in too many instances marketing managers just use the
previous years figures with minor alterations, or are simply handed a budget to work
with, either from their superiors or in some cases from foreign suppliers.

The ratio between media placements and advertisement production costs range from
between 66-90 percent in airings, versus 10-33 percent for production, according to
marketing managers. Media planners opinion was similar, allotting 66-80 percent for
placements, versus 20-33 percent for production costs. Both sides were of the same
opinion that this ratio often becomes distorted in the years of advertisement production
where production costs account for a larger proportion of the media budget, in many
cases as high as 50 percent of this ratio. This seems to be more relevant in relation to
companies with overall limited budgets as well as those who are working with domestic
and smaller product categories, where the lions share is devoted to production costs in
one year but evening out in the following year/s if the advertisement can be reused.

Strategic marketing was always on the authors minds throughout the interviewing
process, and in case it wasnt clearly represented during the interviews the aim was to
probe the interviewees further concerning that. If companies do not follow any
marketing strategies, and mainly base their decisions on budgets, then it has a
significant effect on marketing activities and the choice of media. For those companies
that do not have holistic and well designed marketing programs, it seems as though the
bottom falls out in the decision making with regard to what marketing communication
methods to deploy. These companies that practice this are most likely not optimising
their marketing activities and therefore lack a targeted and effective approach. This can
be related to Herbert Simons work on heuristics, which demonstrates that people tend
to choose the easiest solution that satisfies instead of more effective ones (Simon,
1956). On the contrary, for those companies that have a clear vision and objectives are
evidently more targeted and effective. The choice of media and decision making seem
to have a tendency of being more effortless for those companies that have their
marketing activities intact.




76

Advertising media
The questions in this part are partly related to the annual survey made by Capacent,
commissioned by MARK and SA, which was one of the initial sparks for this thesis
idea. The first question is closely linked to the annual Capacent survey as it asks the
same question of what advertising media was the most effective one, in the
interviewees opinion. This question served two purposes, one was to enable the authors
to compare the interview results with the ones from Capacent, the other being able to
see the different perspectives interviewees had on to what extent marketing managers
should be involved in the choice of media, for those using media agencies, or whether
that should be left entirely to the media agencys discretion. It was evident that this was
thought of as a controversial question by many marketing managers and media planners
alike, with some unable to answer and others stating that the question was flawed.
Marketing managers not using media agencies didnt seem to have any problems with
answering this question but others were often more reluctant to answer it, despite that,
they all had an opinion and answered in the end. Many marketing managers said that
they could not give a general answer for the market but only from their own perspective.
Media planners were of the same opinion, that this couldnt be answered in a general
fashion but it differed based on things such as objectives and target groups, despite that
those who answered stated that this was their general view of what media might be
considered most effective in the Icelandic market. Even though this question can be
rightfully criticised from these different perspectives, it still serves a purpose and gives
an insight into how the different managers are handling their marketing operations. This
is obviously a question that cannot be answered in a general fashion but only from the
viewpoint of a specific product or company in question and their communication
objectives. The difference in willingness to answer between marketing managers might
come as a result of those not using a media agency are in closer contact with media
outlets and might therefore seem to have a better insight into the different media.
Contrary to that, it could also be said that managers utilising media agencies should
have a better insight into the effectiveness of different media from the knowledge
gained from agency interaction, and should therefore be more aware that this question
cannot be answered from a general viewpoint; perhaps leaving those managers without
media agencies being misled into thinking that they had full overview when they might
not. Furthermore, it seems that those managers who found this question to be unfair had
in general a better control and overview of their marketing activities.


77


With respect to the actual responses from this first question it was clear that TV was
considered to be the most effective advertising medium by the majority of marketing
managers, as well as those media planners that had an opinion on this question. This
corresponds with the results from the Capacent survey where more than half of
correspondents regarded TV as the most effective as well. However, it is hard to
actually compare the rest of the results from this question to Capacents survey because
here the interviewees were asked to rank the different media in descending order from
the most effective and downwards, which was probably not the case with the Capacent
survey. The reason for the ranking element is that interviewees were also asked to rank
in the following question their actual usage of different media, opening up for the
possibility of comparing their opinions of effectiveness against their real use of
advertising media. Nonetheless, marketing managers had a variety of other media
following TV with newspapers and Internet close to each other in ranking, as well as
radio coming thereafter. Furthermore, in most of the media planners opinion, the media
following TV in effectiveness were newspapers, with Internet and radio coming
thereafter. It is interesting to see that the results correspond nicely to Capacents survey
and it does not come as a surprise that TV is as highly regarded as it is. What is
intriguing as well is that the opinions of both marketing managers and media planners
alike that newspapers are as effective as they are in the Icelandic marketplace, which
according to one media planner was probably unheard of in other parts of the world, and
that radio was extremely powerful in the market and that there is a tendency to
underestimate its strength.

When looking at actual usage, TV was still being utilised the most by marketing
managers but the divide between different media was not as clear cut as it was in the
prior question concerning opinions of media effectiveness. Even though TV was in the
forefront there were proportionally more managers that used newspapers and radio than
the effectiveness responses indicated, but Internet was further away with less usage. It is
interesting to see such a large proportion of marketing managers viewpoints on media
effectiveness differing from their actual usage. This might indicate either that managers
are inconsistent in their choices and beliefs or that varying production costs between
platforms might have an influence on media choices. It is likely that it is considerably


78

more expensive to produce a TV ad as opposed to a newspaper ad for example, so even
though TV is highly regarded, the production costs might lead managers to choose less
expensive alternatives. Furthermore, the most effective media might not be the most
expensive one, which means that even though the Internet is gaining a foothold, and its
influence might be considered to be very effective, the prices often tend to be much
lower than in other media, and therefore those expenditures have less proportional
weight in advertising budgets. From the media planners perspective, all those who had
an opinion on the effectiveness had a different actual usage of the various media. There
was a similar split overall between TV and newspapers alternating between the two top
spots, with either online or radio following. The media planners view on what they
thought was the primary reason for TV not dominating the first place is that not
everyone can afford the high production costs TV ads incur, even though managers may
consider TV to be most effective they might therefore need to choose less expensive
options in order not to spend the lions share of their budgets on production instead of
media placements. Furthermore, the media agencies seem to have a lot of large clients
that use print more dominantly, such as retailers, and therefore their actual usage is
affected by those customers.

With respect to media salespeople having any influence on media choices, the general
view for marketing managers was split between them being considered to have an
influence or not. It seems that salespeople tend to have a larger sway when it comes to
sponsorships, which often require a bit more subjective approach than traditional media
choices. Media planners also believed that salespeople can have an influence on media
choices, especially those that represent larger players in the media market. The small
size of the market also comes into play here where many of the salespeople have been in
the business for a long time and may have rotated between the different media which
often means that they have frequently been in contact with media planners and buyers
from many different sides of the table. A longer working relationship often leads to
more trust being established between parties, and in such cases it is very likely that
salespeople have a larger influence on media choices. It was also mentioned by both
marketing managers and media planners that it was important to keep a good contact
with the media so it might secure the managers or planners of being kept in the loop


79

when something new and interesting comes about, as well as a good relationship might
result in a higher degree of flexibility and slack in situations where that is of great value.

As to the reasons for the discrepancy between opinions of the effectiveness of
advertising media and their actual usage, marketing managers and media planners had
varying opinions on that. It was amusing to see that more than half of marketing
managers and all media planners having an opinion on effectiveness had a different
actual use than their responses indicated as to their considerations of advertising media
effectiveness. Managers and planners were of the same opinion as to the main reason
stated for the inconsistency with regard to TV, i.e. higher production costs for TV ads
acts as a barrier for companies with small or limited budgets to make use of them
despite the will to do so and the proven effectiveness. This same reason might have a
bearing on the dominance of newspaper ads in the Icelandic market, with those same
companies that cannot afford TV placements rather utilising newspapers instead. Both
media planners and marketing managers mention that a general lack of discipline and
long-term planning often prevailing in Icelandic companies may have a considerable
impact on the choice of newspapers instead of other alternatives, with the simplicity of
producing and placing ads in newspapers often with a short notice playing a large role
in this aspect. There were differing opinions in both groups towards truthfulness of the
myth about advertising agencies, along with media agencies where cross-ownership is
in place, pushing clients more towards newspaper ads in order for the agency to increase
production and thereby profiting more on respective clients. If this myth were to be true
it would have an influence on the choice of newspapers and thereby partly explain the
high usage of them in the marketplace. It is difficult to take a stand as towards the
validity of these claims but it is interesting to see that those marketing managers
believing the myth to be true keep their creative elements and media plans separate from
each other, as well as those media planners supporting the authenticity of the myth are
independent of ad agencies whereas those opposed are not. The main reason mentioned
to why the usage of online media is trailing its perceived effectiveness is the lack of
better measurements and research, as well as absence of dedicated salespersons for that
medium in general. The influence of media salespeople is considered to have some
degree of impact on media choices, especially with regard to newspapers where it is
often less complicated to add advertisement on short notice, adding to the preference for


80

newspaper usage. A final amusing note is that both groups found marketers to often be
egocentric in general where they state one thing but execute another, frequently to
please others or in order to be approved by their group of peers, as to one possible
reason for the inconsistency between opinions of effectiveness of advertising media and
the actual usage.

Future Research
There are many interesting aspects surrounding this research that are interesting to
investigate further, and various factors under the surface that in some instances are
difficult to explore in a study like this.

One of the possible research aspects that could follow as a continuation of this research
would be a comparative study of markets in other countries, for example USA or any
European market. Especially when the economy becomes more stabilised, so that large
parts of the research do not have to dwell on explaining how those economic factors
might influence the decision making and media planning between countries.

That approach would open up for the opportunity to investigate what these markets are
doing differently and why. Furthermore to investigate the research process across
countries to see the difference in methods and techniques used by managers, as well as
media and advertising agencies.

5. Conclusion
This paper has defined and analysed the key activities involved in decision making and
development of the media plan process amongst Icelandic marketers. Exploration of
these processes were conducted with qualitative research methods through three sets of
data sets, interviews with marketing managers, media planners, and a single case
analysis where the respective data was also collected through interviews. After
comparing the interviews from the marketing managers and the media planners, and
adding input from the single case, the results were compared to theory. The data from


81

the interview chapter is explored in the discussion, and in this section the main findings
from the research are investigated.

The authors intention was to answer the main research question, how do Icelandic
marketers make decisions concerning marketing communications and optimisation of
marketing investments? The main objective was to find if there were certain processes
or steps that a majority of managers went through and what activities are involved in
this set of actions.

When exploring the wide range of activities that are involved in media planning
development and the decision making phase, the conjoint process amongst managers is
as follows:
Marketing plan >>Analysing and research >>Positioning
>>Media agency informed >>Media plan >>I nvestigating the outcome

The only difference between the marketing managers was if the majority of the research
process was continuous and conducted or controlled by the manager. If the research
process was conducted by the advertising or the media agency, then they participated
earlier in the process. On the other hand, if the research process was more in the hands
of the managers, as in most cases, the process looked like the one above. However, in
some cases the managers prefer to have some kind of input regarding research and
analysis in the latter phases of the process, even though the majority of the research was
conducted by them.

Media planners process was very similar to the managers process that required the
research on earlier stages:
Media agency informed >>Analysing and research >>Positioning
>>Media plan >>I nvestigating the outcome

Perhaps the only difference in some cases was to add marketing plan in front of the
media planners process. Also when looking at the case examined, the defined process
was very similar to the process described unanimously by the media planners. In


82

addition the process from Belch and Belch (2011) was very similar but phrased
differently (see figure 4).
Even though the process was very interesting and necessary in the research, in order to
find the following, the other elements surrounding the process where just as interesting.
Many of them were explored in the sub questions of the problem statement and will be
demonstrated here after.

When it comes to finding the elements that determine the choice of media between
media planning professionals as opposed to in-house planners, the majority of the
interviewees use media agencies for their media planning purposes, with the exception
of only two that do their own media plans in-house and one of those had used an agency
before. The main reason most managers use a media agency is that they get a
professional service by experts with specialist knowledge in the field of media planning
and buying; a few mentioned that getting the service for a reasonable price, and the
possibility of minimising the hassle of dealing with media salespeople were amongst the
reasons for choosing a media agency. The rapid change in consumption, especially
amongst younger people, should influence the media agencies to pay more attention to
developments in the media landscape. Marketing managers are going in flocks to
seminars concerning online media even though there are little or no measurements on
online media vehicles to enable integration into media plans in Iceland. This could
indicate that the use of, for example, social media in ones marketing communications
may cast the image that the marketing managers and the companys novelty factor is
high, and that alone justifies the caution. Managers supervise mostly sponsorships
themselves, such as broadcast and events, with some turning to media agency for
evaluation.

With regard to what factors determine the choice of online media, there seems to be
little to support any specific elements that have an influence on whether online media is
included in media plans. Both marketing managers and media planners believe the
Internet to be an effective advertising medium, but the lack of dedicated measurements,
as well as the difficulty of integrating online into media plans, as a result of
measurement unavailability, makes it more complicated to compare online with other
options. Therefore, advertisers may not be able to find solid arguments for using the


83

Internet when its effectiveness cannot be determined. This is not an isolated problem for
the Icelandic market but rather a global one, but there is some indication that solutions
to this problem are being developed for the Icelandic market and when that is in place,
online media will most likely take up a larger share of media budgets, assuming that its
effectiveness is proven valid and reliable.

In the delimitation chapter it was stated that this research is limited to medium-sized
and large companies, with the main reason for this being the large proportion of small
non-traditional companies that account for almost 50 percent of total number of firms in
Iceland. In addition, the authors assume that many of the smaller companies are using
little or no advertising and therefore do not have processes of decision making or
development of media plans. However, the difference between medium and large is not
significant regarding decision making, and it seems that other factors could be more
influencing such as foreign suppliers and differences in over-all resources.

It seems that the influence of media salespeople on media choices differs a bit. They
seem to have more sway when it comes to sponsorship of TV shows and events, where
the decision tends to have a more subjective approach than when choosing traditional
placements. According to media planners, this influence on marketing managers is often
too great when it comes to sales people from the larger media outlets. However, even
though salespersons may have some influence on media choices, both managers and
planners believed that keeping a close and good contact with the media has its benefits
that might outweigh the drawbacks, such as being informed about new exciting
possibilities as well as having some flexibility and slack to some degree in times when
needed. In addition, the small size of the Icelandic market was mentioned as well with
respect to this issue, where close relationships are often forged, where many people
know each other and have perhaps been doing business for many years, and through that
time trust has developed between the parties.

When looking at whether media mix decisions are somewhat determined by tradition
and prior use, most managers state that they try to take their choices up for regular
review, but they cannot deny that some of their current decisions might be influenced by


84

prior choices to some degree. The density of the media market in Iceland does play a
role in relation to this where marketing managers only have a limited amount of
possibilities and are therefore more often faced with choosing the same media by
default.

With regard to the ratio between production costs and placements of advertisements,
marketing managers and media planners have a similar take on that where actual
placements accounted for 70-90 percent, as opposed to production costs ranging from
10-30 percent. Both parties noted that this ratio tends to skew more towards higher
production costs in the year of production, often as high as 50 percent, especially for
companies with limited budgets. This corresponds with the fact that TV advertisements
are more expensive to produce than other media, often leaving a thin margin to account
for when companies have meagre budgets.

The main tools and techniques used by marketing managers in order to make informed
decisions can be considered to be primarily sales figures followed by some kind of
research and surveys, as well as budgets that seem to play a larger role than expected in
media planners opinion. According to media planners, marketing managers seem to
have a reasonable general knowledge, but there is often insufficient understanding of
media planning terminology, as well as in some cases a lack of general marketing
strategies and long-term vision. With regard to tools and techniques used by media
planners, they use more or less similar tools, but many feel that media measurements
are incomplete and often too dependent upon the media outlets which might endanger
the validity of these measurements. Furthermore, the general view is that online
measurements lack important metrics such as demographics and more general means to
compare reach and frequency in order to be able to integrate online better into media
plans.

Marketing managers own judgment and intuition often has a great impact on choices
being made, especially where there is a lack of knowledge or research on the issue at
hand. Despite managers intuitiveness and experience being important elements, they
may often interfere with planning from media agencies where marketing managers


85

might be unwilling to accept reasonable arguments, especially from experts in the field,
that might go against their own instincts. According to media planners this does not
happen very often but when it does it can be hard to reason with managers that come in
with predetermined preferences. However, for those marketing managers that are not
utilising media agencies, their own judgment and intuition obviously has a greater
impact on their decisions as a result of them most likely not having access to as much
extensive data in relation to the media market as their counterparts that use media
planners.

The commission system is such that it can badly influence media planners to increase
the airings and can cause the quality of the media plans to decrease. Perhaps a better
way would be to pay the media agency hourly or fixed fees, and thereby taking the
commission factor out of the planning process.

It was interesting to look at the opinions of the effectiveness of various advertising
media against actual usage. In almost all instances marketing managers and media
planners, who had a standpoint, put TV as the most effective advertising medium in
their opinion, which corresponds with the results from the annual Capacent survey,
followed by an assortment of other media. It was fascinating to see that for more than
half of the marketing managers and all of the media planners, that had a view on this
question, their opinions of the effectiveness of the various advertising media differed as
to their actual usage. It is believed that the cause of this discrepancy is due to the
differences in production costs, especially with respect to high TV production costs
leaving many companies unable to make use of that medium, lack of discipline and
long-term planning in general, as well as the lack of better measurements and research
in relation to the modest utilisation of online media.

For marketing managers it is evidently very important to have a holistic view of their
marketing activities spanning from marketing strategy all the way to the minds of the
end consumers. Even though this process seems to be in place with some companies in
the Icelandic market, there are still many companies that lack this holistic approach and
oversight, especially with regard to the research phase not being utilised enough. If


86

research is not conducted regularly throughout the year, the other links in the process
that build upon research are weakened and the effectiveness of the end result might be
diminished. However, the small size of the Icelandic market can be considered as
having an impact on the little focus on research elements. The learning experience was
of great value to the authors, as well as the possibility of gaining an insight into the
inner workings of many great marketing practitioners and media planners alike.



87

Bibliography
American Marketing Association. (2007, December 17). American Marketing
Association. Retrieved March 13, 2012, from Definition of Marketing:
http://www.marketingpower.com/Community/ARC/Pages/Additional/Definition/default
.aspx?sq=marketing+definition
Bakht, A. (2008). Media planning tools. Media: Asia's Media & Marketing Newspaper ,
11.
Belch, G. E., & Belch, M. A. (2011). Advertising and Promotion: An Integrated
Marketing Communications Perspective. New York: McGraw-Hill Higher Education.
Brooks, I. (2009). Organisational Behaviour: Individuals, Groups and Organisation.
Essex: Financial Times Prentice Hall.
Capacent Gallup. (2012). Knnun meal markasstjra (marketing manager survey).
Reykjavk: Capacent Gallup.
CHEONG, Y., GREGORIO, F. D., & KIM, K. (2010). In the Age of Digital
Advertising, Offine and Online Media Demand Different Metrics. JOURNAL OF
ADVERTISING RESEARCH , 403 - 415.
Donnelly, W. (1996). Planning Media, Strategy and Imagination. Upper Saddle River,
NJ: Prentice Hall.
Flick, U. (2006). Qualitative Reserch. London: Sage Publications Ltd.
Frjls Verslun. (2012). 100 Strstu (100 largest companies). Reykjavk: Heimur hf.
Hardman, D. (2009). Judgement and Decision Making, Psycological Perspective. West
Sussex, UK: John Wiley & Sons.
IPA. (2012). IPA. Retrieved May 15, 2012, from http://www.ipa.co.uk/
ISBA. (2012). ISBA. Retrieved May 15, 2012, from http://isba.org.uk/issues/media
Karlsson, R. (2012, May 3). Information about the Icelandic media market. (A.
Viglundsson, Interviewer)


88

Kotler, P., & Keller, K. L. (2009). Marketing Management 13e. Upper Saddle River:
Pearson Prentice Hall.
Marshall, J. (2011). Media planning in the digital age. Advertising Works, 20 .
Matthews, S. (2006). IPA's multi-media planning tool launches. New Media Age , 2.
Matthews, S. (2006). New ISBA director-general calls for cross-media planning tool.
New Media Age , 6.
Mediacom. (2012). Mediacom. Stt 4. April 2012 fr www.mediacom.is
NEFF, J. (2012). Marketers don't practice ROI they preach. Advertising Age , 83(11), 1-
19.
Nutt, P. (1997). Better decision-making: A field study. Business Strategy Review , 8(4),
45.
Payne, J. W., Bettman, J., & Johnson, E. (1993). The adaptive decision maker.
Cambridge, England: Cambridge University Press.
Pelsmacker, P. D., Geuens, M., & Bergh, J. V. (2010). Marketing Communications: A
European Perspective. Essex: Financial Times/ Prentice Hall.
Schultz, D. E. (1993). Integrated Marketing Communication: Maybe Definition Is in
the Point of View,. Marketing News , 17.
SA. (2012). SA. Retrieved April 4, 2012, from www.sia.is
Simon, H. (1955). A behavioral model of rationl choice. The Quarterly Journal of
Economics , LXIX, 99-118.
Simon, H. (1956). Rational choice and the structure of environments. Psychological
Review 63 , 129-138.
Statistics Iceland. (2012). Statistics Iceland. Retrieved May 10, 2012, from Information
technology: http://www.statice.is/Statistics/Population
Statistics Iceland. (2012). Statistics Iceland. Retrieved June 3, 2012, from Information
technology:
http://www.hagstofa.is/?PageID=2595&src=/temp/Dialog/varval.asp?ma=FYR01002%


89

26ti=Fj%F6ldi+fyrirt%E6kja+og+f%E9laga+eftir+rekstrarformum+2005%2D2011%26
path=../Database/fyrirtaeki/fjoldi/%26lang=3%26units=Fj%F6ldi
Statistics Iceland. (2012). Statistics Iceland. Retrieved February 21, 2012, from Media
and culture - advertising:
http://hagstofa.is/?PageID=2605&src=/temp/Dialog/varval.asp?ma=MEN00101%26ti=
Augl%FDsingatekjur+eftir+flokkum+fj%F6lmi%F0la+1996%2D2010+%26path=../Dat
abase/menning/augl/%26lang=3%26units=Millj%F3nir%20kr/%E1%20%EDb%FAa/hl
utfall,%20%
Warc. (2012). Media market. Retrieved May 16, 2012, from Warc: www.warc.com