Introduction to Media Strategy & Planning PDF

INTRODUCTION TO MEDIA STRATEGY & PLANNING Welcome to our course on Media Strategy, Planning, and Trading. Media has transformed from being a secondary consideration in marketing to a critical component at the center of strategy. This course will guide you through the complexities of today’s media la...

INTRODUCTION TO MEDIA STRATEGY & PLANNING Welcome to our course on Media Strategy, Planning, and Trading. Media has transformed from being a secondary consideration in marketing to a critical component at the center of strategy. This course will guide you through the complexities of today’s media landscape and its significant impact on the marketing ecosystem. Key Learning Objectives By the end of this session, you will: Understand the importance of media in modern marketing and communications. Be able to explain the size of the media industry in absolute and relative terms. Comprehend how the digital revolution has driven media’s evolution. Identify key characteristics of the media landscape, including fragmentation, concentration, changing access models, shifting consumer habits, and technological change. The role of Media in Marketing Marketing aims to: Generate brand awareness Cultivate interest and trust in products or services Drive sales and revenue Demonstrate a company’s competitive advantage Deliver value to customers, businesses, and society At its core, marketing involves: 1. Building a brand identity. 2. Crafting compelling messages. 3. Selecting appropriate channels to deliver messages effectively. 4. Measuring consumer responses. This course focuses on media strategy and planning—step three in the process—as it relates to selecting and optimizing channels to reach target audiences. Why Media is Critical today Everybody needs marketing. Even nonprofits, government agencies or institutions use marketing to promote their missions, attract customers and engage with their communities. In the dynamic world of Marketing and Communications, the opportunities are huge. The industry is diverse, offering roles across various sectors, from startups to established manufacturing giants, and from innovative service providers to visionary creative agencies. Digital Content Management - Eugenio Gómez-Acebo 1 Client-Side Roles Working for manufacturing companies, startups, or service companies, professional marketers develop strategies that build and sustain brands. They orchestrate campaigns that resonate with audiences, leading to increased sales and enhanced brand equity. Agency Roles In the agency world, professionals craft compelling narratives that connect with diverse audiences. These roles span various disciplines, including: Creative Agencies: Focus on innovative advertising and branding. PR Agencies: Manage public relations and reputation. Packaging and Branding Agencies: Design product packaging and brand identity. Sports and Entertainment Agencies: Promote sports teams and entertainment events. Digital Specialized Agencies: Specialize in search, influencer marketing, online video, retail and analytics. Media Agencies: Strategically place content in both editorial and commercial contexts, where content and context are paramount. Media Roles In media, teams work on both content production (mainly journalists) and the commercial side, selling ad space to the market. Marketing Technology Roles The advertising and marketing technology is now full of technology players that act in every step of the marketing process, forming what we call the adtech and martech ecosystem. Companies like Meta, Alphabet or Amazon dominate the media landscape. Regardless of your career path—whether on the client side, in an agency, or within the adtech ecosystem—media will intersect with your responsibilities. Whether it’s shaping media strategies, managing media budgets, optimizing the media mix, or measuring the impact of media investments, media’s influence is undeniable. Its significance in the modern marketing mix is rapidly growing. Media has evolved from a specialized, obscure subject to a critical boardroom topic. It shapes perceptions, drives conversations, and propels brands to prominence. Companies invest heavily in media, and its successful execution can significantly drive brand results. Mastering today’s complex media landscape is essential, and a media course provides the insights, skills, and knowledge needed to navigate this ever- evolving field. Is media more important than the message? In the marketing value chain, how crucial is media? Is it more important than the message itself, or is it irrelevant? What has a greater impact on a company’s results: a brilliant creative strategy or efficient media execution? Marshall McLuhan, a pioneering Canadian philosopher and communication theorist, introduced groundbreaking ideas that challenged conventional perceptions of media. His iconic phrase "the medium is the message" encapsulated his belief that the form and nature of communication technologies have a profound impact on how information is received and its subsequent societal implications. While great content is important, Digital Content Management - Eugenio Gómez-Acebo 2 understanding the platforms that reach your audience is just as crucial. A TikTok ad might engage Gen Z far better than a newspaper ad, regardless of the message. McLuhan's theories highlighted the intricate relationship between media and human consciousness, emphasizing how different forms of media shape not only the content they convey but also the way individuals perceive the world and relate to one another. His work foresaw the global village created by electronic media, an interconnected space where distances diminish, and cultures converge. McLuhan was the first to talk about hot and cold media: Hot Media: Characterized by rich and comprehensive content, hot media demands relatively lower levels of active engagement from the audience. Think of the immersive experience of movies. Hot media typically follows linear and sequential patterns, exemplified by film, radio, and lectures from books. Cold Media: Requires heightened involvement due to its less detailed nature. Newspapers, for example, require the reader’s active interpretation. Cold media includes elements like black-and-white television and cartoons. While McLuhan’s theories are fascinating, this course focuses on the practical, professional side of media within the broader context of communication and marketing. To understand media’s relevance, let’s look at some figures and real-world examples. Scale of the Media Industry Media is not just significant; it is monumental. In 2024, global ad spend is forecasted to range between $772 billion and $1.04 trillion, depending on the methodology used. Why these discrepancies among sources? Estimating the market size is notoriously difficult. There are two basic methodologies: A) Estimating marketing spend in media by advertisers. You would have to know how much every advertiser is spending in media every year, and then add up all the different advertisers. This is the approach by Zenith, RECMA or other industry observers: to make an educated guess on the media investments of major and minor advertisers. You have the difficulty of not knowing the actual investment, and advertisers like to inflate their ad investment to the market because it shows power, health and sends a powerful signal to competitors. B) Estimating revenues by media companies: Another approach is to add up the revenues from the media sources, which are typically published in their financial statements. This would provide a more accurate view on the industry. This approach was favored by an analyst named Brian Weiser, today in GroupM, and had a major effect as it reduced the size of the industry in around 15%. In any case, all published figures are educated guesses. For perspective, media’s size eclipses other entertainment sectors such as gaming, OTT video, and music. Economic Impact If we compare the ad investment in the world with the GDP, which represents the total value of all finished goods and services produced in a country during a year, the Digital Content Management - Eugenio Gómez-Acebo 3 entertainment & media industry represents around 2.5%. Although some people describe it as much larger, as it helps to sell most goods and services, the impact of the industry represents around 20% of the economy. What moves the ad industry? What makes companies to spend more in advertising? Can we correlate advertising with any macro economical variable? Many studies show how ad investment growth is correlated with three macroeconomic variables: Rate of GDP growth: When the economies are strong, companies grow and therefore have more resources to invest in marketing Business confidence: when businesses are optimistic about the future, they are more likely to invest in advertising to expand their market presence. Consumer spending: When consumer spending is high, businesses are more likely to invest in advertising to capture a share of the increased market activity. In some occasions, advertising has been seen as a driver of economic growth by stimulating consumer demand, fostering innovation and expanding markets. But also ad investment overreacts to GDP movements: typically advertising spend has declined more during recessions than the rate of GDP declines. How much do company spend in advertising? If we see media as an expense of companies, how much it represents? The proportion of advertising costs in a business’s overall expenses can vary widely depending on the industry, company size, life-stage, economic conditions and business model of the company. Here are some general guidelines: On average, marketing budgets can represent about 6% to 20% of a company’s revenue, depending on the industry and specific business needs. Business-to-consumer (B2C) companies often spend a higher proportion than business-to-business (B2B) companies. B2C companies move between 5% to 10%, while B2B spend between 2% to 5%. Key spending sectors are retail, media & entertainment, automotive, telecom and utilities, financial services and FMCG (including food, toiletries and cosmetics). Where do companies invest in advertising? In terms of geographies, this is still an industry that is driven by one big market alone, the US, that represents between 40% to 45%. The influence of US in advertising and media is very large, both in the size of the market and the origin of many multinational companies and digital platforms. But media is a local business. If we see the evolution, we also see that US and APAC are driving global media growth. Europe used to be 35% of the industry, same as APAC, today is half of it. This is due to the spectacular economic growth of China and India, mainly, and other APAC markets. Digital Content Management - Eugenio Gómez-Acebo 4 Digital Transformation With this increasing volume of media spend, is clear that media has entered the center of the media and comms. So why media has jumped to the center of marketing? In the last 20 years or so the change in the industry has been so dramatic that has pushed this discipline to the center of marketing and communications. Lets think about the process of building brands before the digital world. This process was linear and controlled. Companies built brands through advertising and media investment, and typically the more you invested, the stronger the brand equity and the higher the sales. This was a controlled process. In fact hitting your targets was pretty straightforward. That was the age of Mad Men1, the age of a few channels and everybody gathering around the same room at the same time. Planning media was a secondary element, a transactional purchase lacking any strategy or sophistication. A discipline that got the last 5 minutes in every client presentation of agencies, much more focused on creativity and strategy. The impact of digital technology on the media industry has been profound and transformative, and has put media at the top of the list. It has revolutionized how content is created, distributed, consumed, and monetized. Here are some key ways in which digital has significantly affected the media industry: 1. Democratization of Content Creation 2. Distribution and Accessibility 3. Personalization and Recommendation 4. Convergence of Media 5. Disruption of Advertising Models 6. Erosion of traditional media, specially print 7. Social Media's Influence: Social media platforms have become influential in shaping public opinion, disseminating news, and driving discussions. The speed at which information spreads on platforms like Twitter and Facebook has implications for journalism and societal discourse. 8. Challenges to Journalism, with the rise of fake news 9. New Monetization Strategies and models 10. Data Privacy and Regulation At light-speed, the introduction of digital technologies has changed the world forever. All sectors are affected, all companies had to transform. And at the forefront of change, media. Rapidly, a handful of new companies like Google, Facebook or Amazon emerged, and in a few years, they become the largest media companies that are dominating the 21st century in different disciplines. We will dedicate some sessions to them. The changing Media Landscape We explore now the key consequences in the media strategy and planning world. 1 Mad Men, a TV drama series that fictions an advertising agency on Madison Avenue in Manhattan, NY during the 1960s. The term "Mad men" was coined in the 1950s by advertisers working on Madison Avenue to refer to themselves, "Mad" being short for "Madison". Digital Content Management - Eugenio Gómez-Acebo 5 1 Media fragmentation: The proliferation of digital platforms has resulted in an exponential increase in channels and formats, making it harder to reach mass audiences. Platforms such as Netflix and Disney+ have introduced ad-supported models, adding to this complex ecosystem. An increasing number of companies have also started ad sales businesses: from retailers (like Carrefour, Walmart or BestBuy) to delivery chains (like Uber Eats), hotel chains (like Marriot) or even airlines like United. Fragmentation also elevates the value of live events like sports, which retain concentrated audiences. Fragmentation brings an important challenge to marketers: Today reaching mass audiences is harder, therefore making the media planning job much more difficult. Companies have to use omnichannel strategies to reach their consumer. 2. Media Concentration While media is fragmented, its growth is dominated by a few major players. Companies like Alphabet, Meta, and Amazon command significant shares of ad spend, creating a duopoly or triopoly. Scaled digital ad ecosystems have gained tremendous traction due to their ability to ensure consumer adoption, access to data / identity and automation and performance that drove scale. As you might know from economics, the market structure can be classified in terms of the number of players and competitors in an industry. We have markets in perfect competition, which in turn brings down prices to consumers. Competition is healthy for consumers as if pushes prices down and forces companies to invest in innovation. Monopolies, on the other hand, tend to increase prices and reduce innovation. Given the monopolistic practices of media companies, their effect in consumers and how politically sensitive is the control of media, governments around the world are starting to legislate against these monopolies. Traditional media also shows concentration, with major players like Atresmedia and Mediaset dominating markets like Spain. A useful way to understand this calculate the power ratio: Power Ratio is defined as 𝐴𝑑𝑣𝑒𝑟𝑡𝑖𝑠𝑖𝑛𝑔 𝑅𝑒𝑣𝑒𝑛𝑢𝑒𝑠 𝑃𝑜𝑤𝑒𝑟 𝑅𝑎𝑡𝑖𝑜 = 𝐴𝑢𝑑𝑖𝑒𝑛𝑐𝑒 𝑆ℎ𝑎𝑟𝑒 Power ratios show how well media companies convert their ratings into advertising revenue. Values greater than one indicate a company that is outperforming its industry. 3. Changing Access Models Media has traditionally been funded by advertising. As one top executive of the TV industry explained once, “Our mission is to sell and broadcast advertising. We also broadcast programs in the middle to attract audiences.” Digital Content Management - Eugenio Gómez-Acebo 6 Media funding has shifted from purely ad-supported to subscription-based models. Yet, ad-supported formats remain crucial as companies like Netflix blend subscription and advertising revenue models. Finally, Retail media is emerging as a rapidly growing channel, driven by consumer data and direct access. “Everything is an ad network”, as Eric Seufert said. In fact, Retail Media has become the fastest scaling digital channel ever. 4. Shifting consumer habits Consumers habits are very relevant because we need to find audiences where they are. Technology—particularly mobile devices—has empowered consumers to personalize their media consumption. While this increases engagement, it also shortens attention spans and makes capturing interest more challenging. Generational differences further influence habits, with Gen Z prioritizing video and social platforms over traditional formats. In any case one of the key consequences of digital consumer habits is the need for personalization. Is not enough to reach people, but we need to be relevant to them in order to influence them. Digital media has allowed for hyper-personalization of content recommendations. Algorithms and machine learning are used to suggest content tailored to a user's preferences and viewing history, making the media consumption experience highly individualized. 5. Brand Perception Consumers increasingly value brands that align with their social and environmental ideals. While functionality and aspirational messaging remain relevant, brands must also demonstrate purpose and authenticity to build meaningful connections. 6. Technological Transformation AI and automation are reshaping media planning and buying. From targeting and segmentation to campaign optimization, technology enhances efficiency and effectiveness. Tools like predictive analytics, machine learning, and synthetic data offer unprecedented precision in media strategies. Data privacy changes also will influence how companies target their consumers in a world with less data. Final Thoughts The media industry’s rapid transformation—driven by digitalization, consumer behavior shifts, and technological advancements—places it at the heart of marketing strategy. Understanding its nuances will empower you to navigate and leverage this dynamic landscape effectively. Let’s explore these challenges and opportunities in-depth throughout the course. Digital Content Management - Eugenio Gómez-Acebo 7