Formerly, media planning was taken seriously, and there was no emphasis on buying because the choice was restricted to press as the primary media, cinema as another important medium, TV commercial on DD derived from cinema ad, and radio, mainly the Vividh Bharati. Media planners tried to understand the characteristics of press, and interpret the findings of the NRS. OR was used to optimize the budget allocation to press. Media planning slowly became professional by adopting ideas like ~normalization of readership curve and opportunity-to-see (OTS). Media optimization models developed for the press was to be extended to the cinema, but without success. Media buying in the sense of negotiations with the media was confined to the cinema and the press. Large advertisers negotiated even cinema ads because Blaze had monopoly over theatrical release of cinema ads, and did not entertain negotiation from small advertisers. Even press ad negotiations were also confined to big advertisers. The situation overwhelmingly supported media planning, but was not conducive to media buying. This remained so till 1990.
Media boom of the late nineties have witnessed cut-threat competition amongst media to attract
advertisers. Proliferation of media, the increased ad budgets led to price bargaining on the part of the agencies and as expected by the clients. Rather than the content of the programme on TV, what counted was the discount clinched from the media. Rather than the additional environment what mattered was the free space given by the press media. The focus has shifted from media planning to media buying.
According to Shunu Sen, the commission to media buying agency is 2.5 p.c. This is not enough to undertake media planning function. If both planning and buying are to be undertaken a commission of 4 per cent would be fair. Media consultancy, an integrated total approach to media must receive at least 6 per cent commission. But both clients and agencies are indifferent to these aspects. Ideally, media planning that decides the best placement of ads should precede media buying. Howsoever, discounted bought out space or spot is, it may prove costlier in the absence of planning.
A new break-up of traditional agency commission that has been adopted informally by the industry is:
• Strategic planning and creative work 10 p.c.
• Media buying and negotiations 2.5 p.c.
• Media planning 2.5 p.c.
The above remuneration structure becomes a part of AOR arrangement. This works in favor of the large agencies. Clients enter into AOR arrangements to avail of rate benefits.
The bigger you are, the better is your negotiating capacity with the media. Interpublic Group is the world’s largest agglomeration of ad agencies that in India comprises McCann-Erickson, FCB-Ulka and Lowe Lintas among others. This group will set up Magna Global, which will represent aggregate media negotiating interests of most of Interpublic’s Indian entities, and will control Rs. 1,700-1,800 crore of media spend, Mind share represents HTA, O&M, Contract and Equs in India. It controls Rs. 3,000 crores of billings. Media Edge represents Rediffusion and Everest. Several such mergers are in the offing. Such consolidation will change media planning. Large multi-product clients will enjoy tremendous economies of scale. A lot of clients want one agency to do media buying for all their brands. Though consolidation is a big opportunity, there are going to be magnified problems of client conflicts. The benefits of such consolidation flow to both the advertisers and group agencies.