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Media Buying Simulation: An Introduction to Real World Media Buying and Selling

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After negotiating the deal, you will receive an 'intent to buy' notice (Appendix E) ... There are seven other agencies also trying to buy time from the same networks ... – PowerPoint PPT presentation

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Title: Media Buying Simulation: An Introduction to Real World Media Buying and Selling


1
Media Buying SimulationAn Introduction to Real
World Media Buying and Selling
2
Objectives of the MBS
  • Familiarize you with the art of negotiating and
    buying media
  • Help you practice and appreciate the importance
    of good written communication skills in a mock
    business setting
  • Give you practice calculating various media
    metrics
  • Encourage strategic thinking to improve your
    ability to succeed in media planning

3
MBS Overview
  • 16 teams of 2 students each
  • 8 ad agencies will be buying rating points (TRPs)
    in the form of media time
  • Agencies will be given a budget, a rating points
    goal to meet for two dayparts, and a media
    planning objective
  • 8 cable networks will be selling spots
  • Network teams will be given a number of spots to
    sell across two dayparts and a breakeven figure
    for the inventory of spots
  • All teams have access to
  • ratings of all 8 cable networks during each
    daypart (Appendix D)
  • Descriptions of the cable networks
  • Descriptions of the agencies including the client
    they represent

4
MBS Rules
  • All communications between groups MUST be through
    email
  • Teams must respond to all contacts and requests
    from other teams within 15 hours
  • exception requests made between 12pm Friday and
    9pm Sunday must be responded to by 12pm Monday
  • Any price or inventory offered to another team
    must not change during this 15 hour period.
  • All purchases and sales must be verified with a
    written communication (email)
  • While I do not need to receive initial offers or
    negotiation emails, I do need to be copied on
    sales verification emails
  • Each agency must buy time from at least two
    different cable networks for each day part
  • All business is to be conducted in a professional
    and courteous manner

5
Concepts and Terms
  • Target Rating Points (TRPs)
  • Like gross rating points, but only for specific
    target audience
  • If a cable network offers a spot with a rating of
    4.0, and the agency purchases 5 spots, the agency
    has purchased 20 TRPs.
  • Cost per rating point (CPRP or CPP)
  • Cost of the spot(s) ? TRPs for the spot(s)
  • Cost per spot (CPS)
  • Cost of one unit of avertising
  • Often multiple units are purchased together, so
    CPS is
  • total schedule cost ? number of spots in the
    schedule

6
Examples
  • MTV has 100 primetime spots available with a
    rating of 0.8
  • MTV needs to generate 250,000 with those spots
  • CPS 250,000 ? 100 2,500
  • TRPs 100 X 0.8 80
  • CPP 250,000 ? 80 3,125
  • If an agency wants to buy 20 TRPs, they would
    need to buy 25 (20 ? 0.8) spots.

7
Examples (cont.)
  • An agency needs to buy 250 primetime TRPs with a
    budget of 850,000
  • MTV has offers primetime CPS of 2500 with a
    rating of 0.8
  • CPPa 850,000 ? 250 3,400
  • CPPm 2,500 ? 0.8 3,125
  • Since you can spend 3,400 on each TRP, 3,125
    may be a pretty good deal
  • Of course you would still want to get quotes from
    other cable networks to see if there is an even
    better deal

8
Cable Networks
  • In addition to your inventory and sales goals,
    you will receive the names and email addresses of
    all agencies
  • It will be beneficial to you to make distribution
    lists of all agencies and your own team to
    facilitate communication
  • There are eight agencies that you are trying to
    sell to
  • There are seven other cable teams also trying to
    sell inventory
  • You are competing against each other to try to
    maximize profits
  • Soon you will receive a hello message from each
    agency please reply to each of these
  • Your reply may include information about the
    network and preliminary prices for your spots
    its never too early to start selling!
  • Remember all communications are sent as a team,
    so only one person from each team need reply, but
    every member of your team should get copied on
    every email sent

9
Cable Networks
  • When the MBS starts, you may contact the agencies
    to see if they have a response to your initial
    pricing again coordination of emails should be
    evidentyou dont want to sell the same spots
    more than once!
  • You must respond to all contacts made by the
    agencies within 15 hours (weekend excluded)
    quick communication is often a key to success in
    this game
  • Any price you offer must stand during this 15
    hour time frame, so be sure of your price before
    you send it to the agency
  • After negotiating the deal, you will receive an
    intent to buy notice (Appendix E)

10
Cable Networks
  • You must confirm the deal with a Confirmation
    (Appendix E) The sale is NOT complete until you
    have confirmation, meaning that unless you have a
    copy of the agencys reply to the confirmation,
    there is no sale
  • If all inventory is sold before the end of the
    simulation, you must send an email to all
    agencies stating that you are sold out
  • Once complete, summarize all sales using Appendix
    F and attach the printed emails of confirmation
    notices and receipt replies for each sale

11
Agency Teams
  • You will receive a budget and a buying goal for
    each of two dayparts, and a media planning
    objective in addition you will receive the names
    and email addresses of the cable networks you can
    buy from
  • Make distribution lists for all cable networks as
    well as your own team
  • There are eight cable networks to buy from
  • There are seven other agencies also trying to buy
    time from the same networks
  • You are competing against each other to make the
    best buys and stay under budget, while meeting
    TRPS and planning goals
  • Immediately send a hello message to each cable
    team to verify your distribution lists and to ask
    for initial prices for their inventory
  • While only one member of each agency team should
    send these (and all) messages, be sure to copy
    all members of your team so everyone knows what
    everyone else is saying

12
Agency Teams
  • When the MBS starts, you can consider making
    buys either accept the initial pricing and make
    an offer, decline outright, or begin negotiating
  • You must respond to all contacts and requests
    made by the cable team with 15 hours (weekend
    excluded)
  • Quick communication is key to succeeding in this
    game
  • If you make an offer to buy for a certain price,
    you may not change that offer within the 15 hour
    timeframe unless you have spent all of your
    budget or you have reached your TRPs goal
  • Once you agree to terms with a cable team, you
    must send them an intent to buy (Appendix E)
  • The cable team will reply with a Confirmation
    for the sale to be complete, you must reply to
    this confirmation
  • Once your team has made all buys needed, complete
    Appendix G to summarize the buys made, and attach
    the printed confirmation emails for every buy

13
Grading
  • The simulation is designed so that all budget and
    sales goals can be met
  • Every group who turns in all properly executed
    and documented sales/buys, and meets their
    budget/sales goals will get a passing grade
  • Extra credit may be awarded to teams who perform
    exceptionally
  • Failure to meet budget/sales goals through a lack
    of effort, or breaking any of the rules may
    result in a failing grade. This includes the
    email rule!

14
Timing
  • Beginning now, teams may begin communicating, but
    only in an introductory manner and to test
    distribution lists
  • No sales, offers, or negotiations of ANY kind may
    begin until the start of the simulation
  • The simulation will begin at noon (after class)
    on Friday 11/10
  • The simulation will end one week later, at 900am
    on Friday 11/17
  • Your reports are due to me no later than 900am
    on Friday 12/1
  • If you complete your sales/buys before 11/17 you
    are encouraged to turn in the report during class
    on 11/17
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