Strategy Planning, Campaign Planning & Media Budget
Strategy Planning, Campaign Planning
and Media Budget
The client hires the agency for executing its advertising
tasks. The agency gets a compensation for getting the
work done. The client gets the best services and talent
of professionals by hiring an agency.
How does an agency get hired?
OR
How does a client hire an agency?
The usual method is for the agency to present their
strategy to the client. This is usually done in a
competitive situation where many agencies are vying
for the business. The strategy and ideas that make the
best impact on the client get selected and that agency
gets hired.
This whole process is called PITCHING for an account.
Here the account refers to business from a client. That
company or brand or firm is an account of the agency.
Pitching is the process by which the business is
obtained. It is a process of competitive selection of
advertising agencies by companies. When firms want to
outsource their advertising duties to agencies, they call
for pitching wherein all shortlisted agencies present
their thoughts on how to take the brand forward. The
most appealing presentation finally gets selected by the
client to handle its brand communication duties.
The agency provides many services to the client.
PRODUCER: RANBIR SINGH
AJK-MCRC, New Delhi
Strategy Planning, Campaign Planning & Media Budget
The creation and making of an ad.
The scheduling and insertion of ads in the
media.
Marketing, promotion and research facilities.
These are the basic functions
For all these the one important function that the
agency provides is the long term planning and thinking
for the brand and that’s called Account Planning. The
short term objectives and goals of advertising are
thought out based on the long term plans.
An ad or a set of them is not planned in isolation. It is
the result of a detailed strategizing and planning.
We are spending money and effort to promote our
ideas so we need to be sure that what we plan will
achieve results. To do so we follow a sequence of steps
and arrive at the task to be done.
WHERE ARE WE TODAY?
Before we think of an ad for a brand or an idea we
have to understand what the present situation is.
Where does the brand stand in the market today?
Who are its competitors?
What is the strength of the brand?
What is the weakness?
What are the opportunities available?
Who are the consumers?
What are they like – their choice and preferences?
PRODUCER: RANBIR SINGH
AJK-MCRC, New Delhi
Strategy Planning, Campaign Planning & Media Budget
From this will emerge what we need to do next
WHERE DO WE WANT TO BE
This situational analysis or the assessment of the
environment of the brand will tell us what we need to
do and where we should head.
What is the final goal or destination?
HOW TO REACH THERE
Now we decide what to say in the ad or how to say it
so that we reach where we want to. That’s how the
content and creative aspect gets decided.
Also which methods or what media are we going to use
to reach our Target Audience.
Let’s take an example and see how this strategizing
works.
Suppose a company is introducing a new flavor of soft
drink.
Firstly we have to see the situation in the market –
WHERE ARE WE TODAY?
Is this a new flavor for the people or is any other
company already making it?
What are the other options available to the
consumer?
What sizes of packaging does the consumer
prefer?
PRODUCER: RANBIR SINGH
AJK-MCRC, New Delhi
Strategy Planning, Campaign Planning & Media Budget
What price will be suitable?
What name will be good?
WHERE DO WE WANT TO BE
This will make us decide on the product and its launch.
For the launch we have to decide who is the product
meant for? What is the objective of advertising? Here it
could be for children and the objective is to make them
aware of the new brand.
HOW TO REACH THERE
We know we have to do heavy advertising since its
something new and people are not familiar with it. So
we need to create ads that would be eye catching and
memorable – maybe use humour or a celebrity or a
jingle.
We need to advertise more frequently and through a
mix of various media. The aim is to reach out to the
maximum number of people of our kind, as fast as
possible. So we choose methods and media
accordingly. In our case TV and radio programmes for
children, promotions in malls and schools would be
suitable.
So what we have done is that we have made the
Advertising Plan or the Campaign Plan. A whole set of
strategies and activities for launching the brand.
Thus a Ad Plan would consist of
1. Ad or Campaign Objective, Target Audience and
Segment
PRODUCER: RANBIR SINGH
AJK-MCRC, New Delhi
Strategy Planning, Campaign Planning & Media Budget
2. Creative Strategy- kind of ad, message and
content
3. Media Strategy- choice of media, timing and
schedule.
The ad plan or the campaign plan answers
WHERE DO WE WANT TO BE by the ad or the campaign
objective
HOW TO REACH THERE by the creative and the media
strategy.
What our task is determines the kind of money we
need to spend.
Budget
That’s what is the budgeting for advertising.
The expenditures by the client would be on the
following
Creating the brand identity like logo and pack
design, letterhead and other signage design.
Strategizing, Ideating and creating an ad.
Production of the ad which would include
shooting, hiring models and finishing.
Media costs – the cost of buying time on TV
or radio, space in print or OOH [Out Of Home]
The agency could charge on a job basis. There would
be defined rates for designing and other work.
Or the agency gets hired on a contractual basis. They
are with the client on a regular or fixed compensation
PRODUCER: RANBIR SINGH
AJK-MCRC, New Delhi
Strategy Planning, Campaign Planning & Media Budget
and will do work as and when required and get paid for
each task also.
Another method is the incentive based method where
the agency’s incentive depends on performance or
goals achieved. It’s a complex method of calculation
and depends on various factors like sales, growth and
media commissions.
At times the agency is handling the entire work of the
client and the media spends are huge. The agency gets
a percentage of the media spend as their commission
and these are such large amounts that it covers all
other costs. So the agency works only on this
commission basis.
This last method is what is followed usually and that’s
where we talk of media budgets.
To give you an idea of this system – most of the cold
drink companies are spending nearly Rs 100 crores
each, per year on the media buying. The agency gets
about 15% of this as their commission.
If you work this out it comes to a figure of about Rs 15
crores earning for the agency. Cost of making an ad
and other work involved would run into a couple of
crores. The rest is the agency’s earning.
So when we refer to advertising budgets we are talking
basically about media spending or media budgets.
Deciding on the media budgets is done in many ways
and it depends on the advertiser, his size and
functioning and also the task that is to be achieved.
We have two ways of planning the budget
PRODUCER: RANBIR SINGH
AJK-MCRC, New Delhi
Strategy Planning, Campaign Planning & Media Budget
1] Top Down method
2] Build Up method
TOP DOWN METHOD
As the name suggests we break down the expenditures
of the company and see
What can be allotted to advertising?
or
What needs to be allotted to advertising?
So we have the following methods.
1. Marginal Analysis or Return on Investment
[ROI]
This method is based on the premise that sales and
advertising is directly related. So the company will
continue to spend on advertising as long as the
marginal revenue yielded by the sales is more than the
marginal cost on advertising or simply put the
increased cost on advertising is less than the increase
in the returns coming in.
It’s a very simplified thought as we find that sales can
get affected by many more things than just
advertising.
2. Percentage of Sale
This method uses the sales as a base for determining
the amount to be spent on advertising. A figure or an
estimate is set and as sales increase or projected sales
increase the spend is also increased.
PRODUCER: RANBIR SINGH
AJK-MCRC, New Delhi
Strategy Planning, Campaign Planning & Media Budget
3. All you can afford
This method is used by small firms and companies who
just allocate funds for various purposes and what can
be given to advertising is allotted to it. It’s a simplified
version of budgeting as the role and effects of
advertising are not kept in mind. The estimates could
be grossly wrong.
4. Competitive Parity and Share of Voice
This is a good way of estimating spends on advertising.
The idea is to have a presence as strong as your
competitor in the market. So spend as much as they
do, to remain at par or if the market has many shares
then the share of ad spend should be equal to the
share of the market your brand or company has. For
example if your company has 25% share of the total
market then the kind of money spent on your ads
should also be about 25% of the total ad spend on
advertising for all the brands in the market.
These methods are not very accurate as they do not
keep the full impact of advertising in mind. Advertising
affects revenues and sales so the correlation has to be
considered.
That’s what brings us to the Build Up method which is
the Objective and Task Method.
Here the objective of communication is defined
Then the tasks or methods needed to achieve it are
listed
And then the cost of performing them is estimated and
thus the budget is decided.
PRODUCER: RANBIR SINGH
AJK-MCRC, New Delhi
Strategy Planning, Campaign Planning & Media Budget
For example if you want to increase your sales by 5%
in a year you may need to increase awareness of the
brand by 20%.
To achieve that you need to use a mix of various media
and promotional efforts to reach the Target Audience
and to have the required effect.
How much is that going to cost?
That will be the budget required.
Now this budget may not suit the client. We would now
adjust it with the amount that is affordable or see the
sales and determine the budget and see what can be
achieved in it. So what we see is that finally a
combination of these methods would be used. This way
the budget gets decided and all methods have their
application and suitability.
Today what we have gathered from this lesson is the
way the agency functions with the client to
Acquire the business from the client.
Perform the tasks for the account.
Plan for the brand advertising.
Budget the expenditures on advertising
PRODUCER: RANBIR SINGH
AJK-MCRC, New Delhi
