According to the Nielsen 2022 ROI Report, the average company spends about 3.8% of its revenues on advertising. But if your company is new to the market or wants to build a larger market share, you'll want to spend proportionally more than that. The report concluded that 50% of planned media channel investments were too low to achieve the best ROI. In other words, more companies need to spend money to make money.
And you can achieve a great return on your investment. Most digital advertisers strive for an average ROI of 5:1 – $5 earned for every $1 spent on an ad campaign. Keep in mind that an ROI below 2:1 is considered not profitable because you are most likely just breaking even when comparing the costs of producing and distributing your products and services to your ad spend.
There are important factors to keep in mind when optimizing your advertising budget. First and foremost, you should have an experienced media planner and buyer to lead this process to get the best results. If you don't, engaging an agency like Phase 3 would be a smart business move. Our media team builds and manages paid media campaigns for a variety of clients with budgets of all sizes. In this article, we'll outline what a successful media planning and buying strategy looks like.
What is Media Planning?
The process of media planning and buying is critical to optimizing your advertising ROI. Media planning is an essential first step. It is the process of determining the specific details of your advertising spend, including the why, where, when, and how. The process also includes creating messaging and visuals, as well as how you will measure success. Media planners evaluate all advertising options within your budget parameters to determine which target market, ad types, and mix of ad channels will help deliver the best possible results.
What is Media Buying?
Once your media plan is in place, media buying is the process of purchasing the advertising space you've decided on. With an integrated media plan, you will buy ads on a variety of traditional and digital media channels. Media buyers determine the price and placement of ads based on research to reach the right audience for their client's product, service, or advertised message.
Goal Setting – The First Step in a Successful Media Plan
Every successful media plan needs a set of specific business goals behind them. This is the critical first step in building a solid marketing strategy. Your goals will help the media team develop messaging strategies and choose the correct media mix. For example, a media plan to launch a product would entail different types of messaging and channels tailored towards general brand awareness than a media plan to drive sales in a specific market.
You may have multiple goals for any media plan, but they should be ranked in terms of budget, channel, and messaging allocation. Your goals could be:
Increase overall brand awareness
Launch or promote a specific product
Grow website or social media traffic
Increase sales/conversion rates
Increase repeat customers
Build an email or mailing list
Each goal may have a unique target audience, message, and ad channel. A good planner will create the right media mix for the overall budget.
The Right Media Mix
Goal setting should also involve identifying the target market for your paid media plan. Your target audience will help you decide which channels to use. You want to choose channels where your market is consuming content. A truly successful media plan will reach the right target audience in the right place at the right time – most of the time across multiple mediums that they consume. While you may have succeeded in one channel or strategy in the past, you are not optimizing your budget by sticking to one strategy. In addition, a digital-first campaign will assist you in measuring success. Most digital ad channels are completely trackable and measurable. The beauty of digital ad channels is that you can quickly adjust messaging, budget, and strategy in response to real-time metrics. A good media planning/buying partner will guide you through this process by asking you the right questions about your goals and doing research on industry standards.
Optimized Advertising Campaign Timeline
Good planning takes time, and even though digital advertising produces real-time data, it's critical to give the medium time to measure results over time for greater accuracy. The Phase 3 media team asks every client to commit to at least six months when starting a new campaign. The first two months are for evaluation and planning, and the rest for execution and refinement. Here's a typical timeline.
Month 1-2: Assessment of what exists now, planning, ad creation and launch
Month 3-4: Review data and pivot where needed
Month 5-6: Start to see trends and real ROI
The Paid Media Budget
When working with a partner like Phase 3, it is important to come to the table with a specific budget in mind so they have a place to start. We've written a blog on why hiding yours from your marketing partner is not a great idea. A good partner will respect your budget. At Phase 3, we want to provide you with the most effective media plan. To do that, we need to know your budget.
When allocating budget to a media plan, we will first assess your competition’s ad campaigns to get a baseline. We’ll review similar case studies from past clients to pinpoint successful channels and strategies. Regardless of your budget, always keep ROI in mind when determining allocation. Allocate most of your budget to the channels and messaging most likely to bring revenue to your company.
We rely on historical metrics to estimate results. This is one reason why working with a seasoned partner like Phase 3 is important. Often ad channels can't give clients accurate KPI forecasting, especially when it comes to estimating number of leads.
ROAS – or Return on Ad Spend – is used to track short-term returns from a specific ad or campaign based on immediate conversions, like sales. ROI – or Return on Investment – is used to track long-term results based on the media plan's overall investment or a new customer's lifetime value. ROAS measures revenue, while ROI measures profit.
Paid Media Channels
There are a multitude of options for paid media channels, both traditional and digital. For this article, we will keep the content broad and simply identify and explain the six categories. Each category has multiple subcategories of channels, vendors, and audiences, as well as their own benefits and drawbacks.
Paid social media, including Pinterest, TikTok, Meta (Facebook/Instagram), and LinkedIn – Instead of relying on a social media platform’s algorithm to serve your posted content to your target audience, you pay to have ads or sponsored messages placed in their feeds, stories or in-messenger.
Paid search, including Google, Bing, Yahoo, and others – The benefit of using paid search is that it is direct demand capture, advertising to audiences that are actively searching for a solution. To ensure your company is viewed first during keyword searches, you can pay to place an ad or sponsored messages at the top of search engine results pages, typically through a pay-per-click ad. You bid on specific keywords or phrases relevant to your business and target audience and pay when a user clicks on your ad.
Programmatic display through TradeDesk, Zeta, and Google Display – These ad platforms automate the buying and selling of online display advertising through a real-time bidding (RTB) system. You bid on and purchase ad placements on targeted websites and mobile apps based on audience demographics and purchasing behavior.
Programmatic audio, including podcasting, Spotify, and IHeart Radio – Like programmatic display, programmatic audio automates the selling and insertion of ads in digital audio content, such as podcasts, music-streaming services, and digital radio. Ads can be highly targeted and personalized based on audience demographics, behavior, and interests.
Video Advertising – OTT, CTV and YouTube advertising are all vehicles for delivering digital video content. OTT includes web-based services like Netflix, Hulu, and Amazon Prime Video. In contrast, CTV refers to device-based services like smart TVs, Apple TV, Roku, and gaming consoles like PlayStation and Xbox.
Traditional, including print, broadcast radio and television, and out-of-home – These non-digital channels are still relevant ad channels for specific markets and brands. Traditional media include newspaper and magazine advertising, radio spots, television commercials, billboards, and events.
Media Planning & Buying in Action
Let's bring all of these essential elements together through a case study. JELD-WEN Windows and Doors engaged Phase 3 for the product launch of Auraline, a new line of windows and doors for the new construction market. The team built a comprehensive campaign, including website, sales collateral, direct mail, email, dealer launch kits, room renderings, video, search, and digital display advertising. The goal was to create brand awareness and interest in the new product line. There were two target audiences, builders and homeowners. For the launch, the media team created contextual, programmatic, and retargeting ad campaigns targeting builders. Once these key influencers were informed and engaged, we initiated a consumer campaign to drive product awareness.
Overall, the campaign delivered over 11 million impressions and nearly 90,000 link clicks. The CTR was 0.84%, and the engagement rate was 7.67%. Pinterest produced the highest metrics overall, while Facebook has the highest return on investment. Facebook generated over 3 million impressions, and roughly 36,000 link clicks, all while maintaining an engagement rate of 6% and a low CPR of $0.66.
Media planning and buying requires strategic thinking, creativity, and a clear understanding of the media landscape. The Phase 3 media team combines analytics and insights with predictive modeling and years of experience to create effective media plans that deliver measurable results. Our clients value our commitment to their goals and our respect for their budgets. So if you'd like to achieve smarter spending, more reach, and more clarity with your paid media strategy, give us a call today.