In my previous post I called attention to the traditional media agency contract which often includes guarantees on sex/age GRP/impressions and reach, all at the client's budget level -- and I pointed out that this contractual guarantee prevents the agency from making buys that have the greatest ROI and brand equity effects. For example, TRA proved that sex/age is typically not predictive of sales effects (see graph below) and showed that using purchaser targeting in all-rotation buying averaged a mere +4% ROI lift vs. +28% for buys mixing fixed program position buying with rotations.
Incenting Your Agencies
