Understanding the Buyer/Seller Dynamic

Special Announcement from Jim Elliott

In 2012, Steve Davis, President of Kantar Media SRDS, and I agreed to undertake a research project to help both of us–and our clients–understand more about the workload and practices of media people in agencies.  Since 2013, Kantar Media and the James G. Elliott Co., Inc. have conducted three studies of advertising planning and buying. 

For 2016, we added a Sellers component to the third Study of Media Planning and Buying to help publishers and salespeople identify differences between the way they view the buying/selling process and the way agency buyers do.  Comparing responses shows several disconnects between what each side thinks is happening. We prepared an overview, the Publisher's Guide to Understanding the Buyer/Seller Dynamic, to help you understand these disconnects so you can minimize their negative impact.

The study pulls insights from Kantar Media SRDS users with current media planning or buying responsibilities for consumer, business, or digital media, as well as individual Advertising Sales or Publisher contacts in SRDS Consumer Magazine or Business to Business publication listings.

Planners, Buyers and Sellers Have Different Goals

• Planners succeed when their media plans are approved in the allotted time. Planners need to streamline their workflow and obtain just-in-time information; they do not have the luxury of learning about every new opportunity unless it is relevant to their current projects. Planners increasingly use RFPs to control the timing of the information they need, and they use various tools like SRDS and syndicated research to preselect media to receive RFPs.
• Buyers succeed when they get the best price for the right media to achieve the goals of the plan. Buyers need to demonstrate their value as negotiators. Often the easiest way to get the best price is to commoditize the media, counting audience but ignoring differences in impact, and substituting less costly products.
• Sellers succeed only when the media products they are selling are actually bought.

Because sellers typically are selling many different products (and often for several different titles), they have to anticipate needs and evangelize. In practice, this often means that a seller must disrupt the planner's workflow; sellers must find a way to position their media to be seen as important enough to make the plan and distinctive enough to avoid being replaced by a cheaper alternative when the buy is made. Accomplishing these goals first requires finding a way to be included in the RFP process. Sellers often find that they must sidestep planners and buyers by appealing directly to the client (marketer).

Although all parties have an interest in more useful sales conversations, only sellers are highly incentivized to secure a particular solution–their own. It should come as no surprise that the different perspectives on acceptable outcomes lead to different perceptions of what is valuable in the selling/buying process.

Demands on Sellers, Planners and Buyers
In 2016, buyer respondents worked with an average of 4 clients and 6 brands, unchanged from 2015. As their workload has increased, time available for buyers to learn about new opportunities in media has shrunk, as has the time they can allocate to each brand. Because of the sheer number of media products and advertising buys, the timing of buyers' need for information usually does not line up with any seller's preplanned schedule. Sellers don't have it any easier. Today, media sellers are charged with the responsibility of selling multiple products, often for more than one title. Although the largest percentage of seller respondents–31%–represent one title, almost half (49%) work on 3 or more titles, and 22% work on 5 or more titles.  

How Important are Meetings?
Because the client is the ultimate decision maker, 80% of seller respondents report that personal meetings with marketers are Extremely or Very Valuable.  They say meetings with agencies are important too: 65% report that personal meetings with agency media people are Extremely or Very Valuable.

Planners and buyers see it differently. Less than half rated personal meetings with salespeople as Extremely or Very Important, and that counts only those salespeople from media they were considering or recommending!

Comparing responses from both studies that said meetings are Extremely Important is a real eye-opener:

• 65% of sellers said meetings with marketers are Extremely Valuable
• 43% of sellers said meetings with agencies are Extremely Valuable
• However, only 9% of agency planners and buyers said meetings with sellers of the media they recommend or consider are Extremely Important

Planning Season
The era of the ™planning season∫ appears to be over and an opportunity to sell could come at any moment; 55% of planner/buyers reported that they work on schedules sporadically or with no set time. The problem here is that sellers may not know when to reach out to make a sale. Too soon, and the agency planners are not interested. Prospects are extremely busy and unpredictable, so sellers need to find ways to consistently get on the radar of clients and agencies.

How Much Time is Allowed to Complete RFPs?
Almost all planners and sellers agree that most RFPs must be completed within 10 days. However, 75% of sellers say they are given only 1 to 5 workdays to respond, while just 42% of planners/buyers say that is all the time they allow. The difference between 1 to 5 days and 6 to 10 days is huge; the much more rapid turnaround requirement could result in tremendous stress and lost business. Unless sellers have an excellent support team that can start working on RFPs in their absence, those sellers risk missing the deadline anytime they take a vacation or a business trip, or get sick.

What Happens After an RFP is Submitted?
There is a very clear difference in the perception of buyers and sellers regarding the chance to change proposals after they have been excluded or denied.

Buyers see their receptivity to changes as much higher than sellers do. Only 12% of buyers say they Never give a chance to change. But 33% of sellers say they are Never given an opportunity. Conversely, 86% of buyers say they Often or Sometimes allow a change to a proposal, compared to 65% of sellers who agree.

Packaging and Pricing the Proposal
78% of sellers report that they Always or Often approach agencies and marketers with bundled offers, closely related to the 73% of buyers who report the same. But the disconnect occurs in the Always figure; 37% of sellers say that their offers are Always bundled, but only 15% of buyers agree.

Discounting
Planners and buyers indicate that they expect discounts in every case, and much bigger discounts than sellers say they actually provide. Perhaps this discrepancy is due to the professional pride both sides have in their negotiating skills.

Both buyers and sellers agree that discounting is widespread; they only differ on the amount.  On average, buyers say they expect a 28% discount. On average, seller respondents report providing a 17% discount. 

Value of Additional Assets
What offerings are most valuable to sellers, and are they important to buyers?  Hint–they are not always the same. The most startling contrast concerns personalized email blasts. 56% of sellers consider them to be Extremely or Very Valuable, while only 24% of buyers find them Extremely or Very Important. On the other hand, digital space is seen as most valuable to sellers (69%), and likewise most important to buyers (67%).  

We hope that this joint effort to study the views of planners, buyers, and sellers helps all of us in the media business to understand the process a little better. We would welcome your views and suggestions on how we can improve future studies. 

Download your own free copy of the overview and full report at: 

www.adsandideas.com/research-1

To arrange a presentation to your group by the presidents of Kantar Media SRDS and the
James G. Elliott Co., Inc., please contact: 

Craig Miller
c.miller@jamesgelliott.com