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It’s been 10 years since Erwin Ephron’s passing, and his legacy lives on, as amply evidenced by ongoing discussions of his famous “recency” theory. Ed Papazian, President of Media Dynamics, Inc., was also a firsthand witness to the development of media planning as we know it today, as well as a key figure in developing the concepts we still use today. Here, he shares his reflections on the industry and his first-hand recollections of Erwin Ephron and the development and application of the recency theory.
How Did We Get Where We Are Today?
When I was Media Research Director at BBDO back in the early-1970s, we were still strongly resisting efforts by independent media buying services to hand over our spot TV and radio billings to them—for a fee. At the time, the 15% commission system was still in force, however, our clever president, Tom Dillon, had recently negotiated a deal with a major client who shifted a large brand to BBDO from a rival shop in exchange for paying us a reduced fee of 9% on that brand's billings. Similar sentiments were stirring elsewhere but for the most part, the media department was seen as a drain on agency profits, except for the network TV agency-of-record (AOR) assignments that saw clients assigning national TV time buying duties for all of their brands to individual shops with expertise, for a 2.25% fee, which was paid by the agencies who otherwise serviced each brand. Since the real cost was far lower, such AOR fees were highly prized.
One of the independent services approached BBDO top management—as they knew that they would get no help from me—and made a pitch for our local TV and radio business, snowing our brass by showing them rows of primitive computers with "buyers" sitting at them pounding away, merrily. So, my boss came to me and asked if it wouldn't be a swell idea—and great for our clients—if we hired this media buying agency. I asked what the fee would be for this media service's duties? The answer was around 5% of the billings. Then I pointed out what our costs were for the personnel to be fired; it worked out to about 2%, plus you weren't going to be able to cancel Arbitron or Nielsen as we needed them for planning, not just buying. Then I asked my boss whether he thought our clients would continue to pay us the full 15% on our spot TV/radio buys if they knew that we were farming these out to another company. Might they decide to pay us only 10% on our local TV/radio billings? There was a pause, then a light bulb must have turned on in my boss’s head: gosh, he hadn't thought of that. That brief discussion ended this particular matter, and it took a number of years for BBDO, as it became a huge multi-agency conglomerate (Omnicom), to grasp the obvious. Why not do what the independent buying services were doing but on a massive scale, and make media a profit center? I had, of course, recommended that BBDO do exactly that—sell our media services for fees to clients and non-clients. A few years later, after I departed the agency business to strike out on my own, they did exactly what I proposed.
One of the main reasons why the agencies morphed into huge conglomerates, often including scores of full service and specialist shops along with the original iconic agencies (BBDO, Y&R, JWT, etc.) was that their clients were doing the same thing. Also, the 15% fee system had died, replaced by fees for almost every service and lots of haggling between client bean counters trying to reduce costs and the agencies trying to explain that they could do a better job but needed some slack on fees in return. Usually, the bean counters won such arguments with the backing of their CMOs.
Inevitably, as the agency mega media shops are crunched ever more aggressively on their fees, something has to go and one area where this is becoming painfully obvious is media research. In its golden age—the 1960s and early-1970s--agency media researchers were unified in working for the industry as a whole as we were still in "the age of we." It was they who insisted on adding viewer data, then demographic stats and attentiveness data, etc. to our audience surveys, as well as espousing various causes relating to excess frequency, the value of reach, cross platform comparisons, etc. But these folks are now seen as generalists and their key role has been downplayed at many of the mega media shops to save money. Which is one major reason why the sellers are now totally in control over the audience measurement area and why they can manipulate its designs to serve their time selling needs. So, the media conglomerates did indeed prove very profitable, thanks to more efficient use of person power, but at a price: the sellers now rule.
Erwin Ephron And The Reality Of The “Recency” Theory
When Erwin was developing the “recency” theory, we were partners in the consulting firm, Ephron, Papazian & Ephron, and he rented office space from me. We had many discussions about recency and he was quite flexible about its application, as was I. Neither of us felt that recency was a magical formula that applied to all situations, especially as no small brand and few of the larger ones could afford the level of spending required to implement it.
Erwin called it "recency" because he was pushing for week in, week out continuity for TV ad campaigns. When he began preaching his theory, he set the ideal goal as a 70 reach per week—every week—with a one frequency per week, or 70 GRPs. I, and I'm sure others, pointed out that this was simply unattainable, even in the 1990s and even if you went to the expense of buying "roadblock" positions in primetime on all three broadcast TV networks, this would have resulted in very poor targeting. Moreover, when I calculated how many GRPs it would have taken (in the mid-1990s) to attain a weekly reach of 70%, it worked out to about 200. So, if you did the math underlying Erwin's recommended plan, he was advocating a 70 reach per week with an average frequency of just about 3, for 52 weeks a year. Erwin didn't disagree and soon modified his presentations accordingly as it was obvious to all concerned that you couldn't buy reach without incurring a fair amount of repetition, especially over a short period of time. A lot of people misunderstand Erwin’s admonition that frequency is "crabgrass," which is taken to mean that it should be minimized as much as possible. In truth, the core idea of "recency" was exactly the opposite. Erwin was pitching a continuity concept, namely that you should advertise every week so that your ads might be seen closer to the point when individual consumers were making buying decisions, which of course might happen any week. The only way to do that was to buy a lot of frequency but spread it out evenly across a full year. Whether this idea applies to every brand is another issue.