Why Businesses Believe They’re Saving Money By Advertising Independently, And Why They’re Missing Out By Not Using A Professional Media Buyer

The success of a business is shaped greatly by the power of its advertising. Obviously, this is why businesses turn to various media outlets to get the word out. Wanting to save the infamous “15%”, some opt to advertise on their own, and deal with the stations directly. Saving 15% on advertising costs sounds great; however, these businesses are ill-informed of how the media-buying world truly works.

What is this 15%? Well, it’s the supposed “standard” of what advertising agencies take as a commission from the media contracts they create with businesses and the broadcaster. Business owners think that by cutting out the middle man they save money. This, however, couldn’t be farther from the truth.

Yes, agencies charge commission (whether or not it’s 15% differs from each client and agency).  No, you don’t save money by going without one.

Agencies spend more money than any independent business owner could ever possibly spend on any particular channel because they represent various different clients at once. Much like the concept of buying a product whole-sale, the agency gets a lower rate for buying in bulk. This is known as media buying power. These rates are so much lower, in fact, that even with a 15% commission added; the business still pays the same or less (and receives much better treatment from the networks).

In addition to getting a better rate, agencies also have media knowledge that allows them to schedule your creative at the right time, know which seasons aren’t as worthwhile, what times to broadcast for a particular demographic, what weeks to stay away from, when stations are low on inventory, etc. And because the stations are so dependent on these agencies for their success, they bend over backwards to ensure the agency is happy. The station is monitored closely to ensure that they are doing their job and not under-delivering. The advertising agency then massages and moves the campaign to ensure the business the greatest return of interest possible. They provide the busy business owner with a weekly post-analysis of their campaign so that the business owner can stick to what they do- run their business.