“When men reject reason, they have no means left for dealing with one another — except through brute, physical force.” - Ayn Rand
The TV plan has become totally buying-driven. There has been a poor planning response to the emergent complexity of the Television landscape. Gut feel based planning and arbitrary rules have reduced TV planning into a game of scheduling inventory driven by an agency’s own agenda. This has created huge inefficiencies for clients. The industry needs to return to ‘buying the plan’ rather than ‘planning the buy’.
Escalations in Cost per Rating Points (CPRPs), is a cause of concern much like inflation in the economy. It strains the purse strings for a marketer and is often a cause for debate between the agency and client. TV fragmentation statistics are used to explain increases in CPRP to clients. The flawed logic used is - More channels are getting launched. Viewership is fragmenting. This is leading to inefficiencies. Hence our CPRPs have gone up by 15%.
It is impossible to prevent the prices of spots on some TV channels from rising over a long range of time as an adjustment to the forces of demand & supply, real value of money and other macro-economic variables. Rates can go up but CPRPs for marketers need not escalate. Seen with a different set of lenses, TV fragmentation is an opportunity! It is a free market’s way of breaking down monopolies. Emerging competition amongst TV channels enhances a smart media planners’ ability to use the increasing options available to control & in reduce CPRPs.
In the Indian TV planning milieu the rise in CPRP for many clients across years has been disproportionately higher than the increase in selling rates of channels. The reasons for this are not due to gaps in TV audience measurement. Rather, it is because the fundamental discourse of TV media investment has become one driven by
1. An indiscriminate use of short cuts
2. The rise of gut-feel based planning &
3. Planning becoming subservient to Buying- TV plans are made with a ‘Planning the Buy’ paradigm rather than ‘Buying the Plan’.
1. An Indiscriminate Use of Short Cuts
To make a national TV plan with a monthly reach/ frequency objective of 50% @ 5+, a planner has a potential of 432 reported channels and more than15 lakh ad breaks to build the plan. To make this plan manually on the basis of cost per incremental reach and with the best of hardware at his disposal, a planner would require 2800 years! It is hence no wonder that the first response of a planner is to treat fragmentation as a curse and develop short cuts to reduce grunt-work. A few short cuts are-
• Bucketing of channels into silos that go by titles such GEC1, GEC2, GEC3, Hindi News, Hindi Movies etc. Monies are allocated to these silos just on the basis of channel shares. This approach always favors larger channels.
• Simplifying by considering pre-determined day-parts.
• Pre-determined channel lists. Within each channel silo, planners make an arbitrary rule of picking, say, the top 2 channels.
2. Decision Making by Gut Feel
TV planning has seen an indiscriminate rise of gut-led decision making across the spectrum of Media Planner to the Marketing Director. There are several forward-looking investments that need to be taken without past-data. However what one is referring to here is an abuse of intuition in the form of arbitrariness and, ‘jugaad’ thinking. Some of these rules are-
• Spotting levels by day by channel: An arbitrary belief that a certain number of spots are required per channel per day to make the plan salient. The purpose of this seems more to fill up inventory than build reach!
• People Like Us (PLU) Heuristics: The origin of PLU-based decision making can be attributed to skepticism of the measurement currency and its representation of upscale audiences. Some of these rules are necessary. However, an indiscriminate, uncontrolled and unexamined usage of this over the last 10 years has made it into full-blown hydra. Program choice making, even in cases where robust ratings exist with low relative error, are made by gut-feel
• Frozen prime-time ratios in Plans: Despite ratings painting a different story, brands often set prime-time ratios that skew costs.
3. Planning a Slave to Buying
The television plan that has just been described is a smorgasbord of biases. The final blow is delivered by an abandonment of the planning process. Channel choices are driven by deals that are desired (and in many cases, aggressively pushed) by the agency and not on the basis of performance and cost efficiencies,
For an advertiser to get maximum value out of her TV investments, there should a ‘conflict by design’ between planning and buying. Planning should be voice of Reason and Rationality. Buying should be the voice of the Real World. The tension between these two thinking processes can lead to a higher order synthesis of the TV plan. But this does not exist anymore in most set-ups.
The combined inefficiencies for a marketer of all these three decision making models is a CPRP escalation that could lie anywhere from 35% up to 80%! The chart shows an illustration of how the CPRP for a brand moves from 10000 at an unconstrained plan level to almost 20,000 once all short cuts and biases come into play.
Besides cost escalation, there are several adverse side effects.
a) It creates an unfair trading market for TV broadcasters. Arbitrary rules and a media agency’s own agenda take over in channel choices rather than performance
b) It prevents big-stakes risk taking. Instead of a brand innovating big, a lot of low leverage bets are taken in a TV plan.
c) The digital transition of several advertisers is slowed down due to wastage on TV
d) The lack of strategic planning and the reduction of TV planning into one of grunt work driven by inventory allocation limits the industry’s ability to induce the best and brightest to join it at the entry levels.
Wherein lies the solution? The following, simple changes can go a long way in driving better value for broadcasters, advertisers and the quality of work-life of a media planner.
1. TV planning should be incremental reach based and to execute that Optimizers need to be the rational foundation of TV planning. There are several short cuts taken in TV planning just because of the complexity of the fragmented environment. An optimizer would remove this substantially and generate at least 35% savings. This can be ploughed back into driving engagement, funding other brands, taking large bets or increasing weeks on air
2. An advertiser should always insist that his agency is ‘Buying the TV Plan’ and not ‘Planning the TV Buy’. To make this happen, Planning needs to be separate from Buying. Keep the distinction between Church & State. It has become the norm to evaluate agencies in pitch on the basis of ‘committed rates’. But the wastage due to poor planning is far greater. How many advertisers are auditing their TV planning product?
3. Once a year, advertisers and agencies should examine and question their mental models and gut-feel driven rules that they superimpose on the television plan. Some of it will be relevant. Others might not and need to be junked.
Making this transition can create greater value for marketer and broadcaster alike. A planning driven calculus for television can shift the dialogue from just rates and savings to one of economic value.
The author is CEO, SMG India.