IV. Strategic Media Planning (continued)

"The Future Direction of Advertising Strategic Media Planning in Japan"
Strategic Media Planning - Part 2
Article No.5 (by Hideaki Koizumi)

In the past, it used to be thought as 'taboo' to include a marketing objective, such as 'increase sales', in the planning of a media strategy, for two reasons. First, there is an opinion that sales are influenced not only by ad activities but also by a lot of other factors, such as price, distribution, and even the weather. Therefore, we can not just pick up ad activities among the many factors. Instead, an ad objective should be limited to some index with a direct connection to ad activities, such as ad awareness.

Second, ad agencies, which often make the media strategy, don't think that they should get involve in considering an advertisers' marketing objectives as they might lose the business if the results of their media predictions turn out to be poor. Therefore, they just analyze advertisers' ad activities in order to lower risk. Generally speaking, advertisers should do such marketing objectives analyses themselves. As a matter of fact, some have already started to do so. However, a lot of advertisers still have entrusted most of their ad activities with ad agencies because they lack the knowledge of media and the know-how to do media analysis. Currently, the ad market in Japan consists of three major groups: advertisers, the media and ad agencies. But the ad markets in the USA and Europe also have consultancies which play a major role as a third group that supports advertisers.

It is well known that many variables affect sales and this makes it difficult to analyze properly. But now, faster computer processing and the development of new techniques, such as non-liner regression analysis, have made it possible to make much more accurate analysis than before. Particularly with 'low involvement products', such as confections, the results show a clear correlation with sales. On the other hand, 'high involvement products', such as automobiles, need more appropriate approaches, as follows; 1) By conducting model analysis, which assumes the following process: 'unknown -> acknowledgment -> understanding -> confidence -> action,' we can clarify the intermediate attributes, and 2) By using SEM (Structural Equation Modeling), which allows us to find the real relationships between cause and effect, we can clarify KPIs (Key Performance Indicator) which influence the intermediate attributes and that lead to the final marketing objectives. Then, by using those KPIs as the objective of the media strategy, we can find a proper media objective which is connected to the marketing objective. Even though this is advanced strategic media planning, the media objective itself might be the same as before (e.g., a Reach index). However, in this case we can set a media objective that is focused on the final marketing objective.

I've pointed out that the current media planning in Japan has a problem because its objective is not clear, but clarity is very important in the USA and Europe. The problem in Japan probably comes from the fact that a proper background analysis, sometimes called a 'background study' or 'situation analysis' is not done often enough here. More specifically, the background analysis contains a 'marketing analysis', a 'target consumers analysis', a 'competitor media activities analysis' and a 'Reach to target analysis', etc. The analysis related to target media Reach, such as an analysis of the TV programs the target watches, or an analysis of the magazines the target reads, has been often conducted. But it is believed that truly close analyses of the target consumers is being conducted by the Marketing and Marketing Research sections within companies, but not by the Media Planning sections in Japan. If there is some primary market research data available covering the target's characteristics, this data needs to be taken into consideration. However, even if that research has not been conducted, we can still deeply analyze secondary market research data to some extent.

In Japan, Video Research conducts a survey called ACR (Audience and Consumer Report). It is the largest syndicated survey conducted, done just once a year with a sample size of 12,200 in seven major areas. We can get a lot of information from ACR. Not only demographics, but also psychographics, such as daily life attitudes, are covered. Ownership and usage of over 200 is covered. Consumption of the four major media, as well as Internet and cable/satellite is also covered. Unfortunately, there are some problems with ACR due to its limited number of samples and the lower frequency the survey is conducted, compared to the TGI surveys in Europe, for example. Data for some products are based on some very small samples. Still, ACR is useful and it has been used to obtain media Reach information. But for target analysis, we can only use it to do some simple cross tabulation analysis. But because ACR covers such a wide range of items, deeper quantitative analysis is required.

After the background analysis has been conducted, and an appropriate objective for media has been set, a specific media strategy can be considered. For example, definition of the target, selection of the media, seasonality strategy, regional strategy and ad weights, etc. could be one. Generally speaking, media strategies are often set subjectively in Japan. I don't deny this is not a way to set a strategy, based on the media planners' experience and useful knowledge. But sometimes advertisers have spent inefficiently and wasted money due to the influence of some custom from the past or political elements. For example, according to a SPI study, it was clear that consumer products which have low cost, such as toiletry goods, can have a fixed relationship between price and ad effectiveness. If the price stays at lower than certain level (the case where the shop is selling the products on sale), there is almost no influence on sales by TV ads. On the other hand, when the price is higher than a certain level (the case where consumers notice the price is high because a competitor sells the product on sale), again there is almost no influence on sales by TV ads. We concluded that there is a price range that the product could be most influenced by TV ads, for example, JPY470-480.

Generally speaking, such products, which are sold at supermarkets with flexible prices, it is often recommended that TV ads be aired during in the period when the product has a special sale price to go along with a massive display in stores. However, this doesn't work well with respect to the efficient usage of media. From the knowledge SPI has garnered from our past quantitative analyses, it is time for us to plan specific media strategies to meet each brands' own unique situation by doing more quantitative analysis on each brand.

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