Brace yourselves! It\u2019s time to tiptoe back into the murky waters of media buying, following my earlier post focussing on the let\u2019s just say \u2018misguided\u2019 move made by Xaxis into becoming both a buyer and a seller of digital space, a topic I\u2019ll be returning to.<\/p>\n
As an equal opportunity dispenser of criticism, this time the Cog Blog\u2019s all-seeing eye is drawn to a comment from ZenithOptimedia, whose Neil Ascher (US Managing Director and President of Diversified Services) responded to a piece by John Billett in MediaPost on agencies allegedly not passing media owner rebates back to their clients with the following:<\/p>\n
\u201c\u2026.advertisers have no one to blame but themselves. Procurement departments with little understanding of what their marketing colleagues actually require of their agency have squeezed so hard on compensation that the staff required cannot be afforded.\u201d<\/b><\/p>\n
Ahah, it\u2019s all the customer\u2019s fault. Let\u2019s explore this a little further.<\/p>\n
Agencies have for very many years undersold their (usually excellent) planning, research and analytics capabilities, whilst at the same time focussing their commercial efforts on the increasingly complicated buying end of what they do. Ask yourself this: if faced with two options, the first of which involves some hard thinking (and hard negotiating with CMO\u2019s and CFO\u2019s) in order to demonstrate the true business value of communications planning and research; and the second involves toughing it out with the media suppliers (with no client anywhere in sight) in order to secure first a cheaper cost-per-thousand (however irrelevant such a measure might be) and second a rebate for the agency based on the agency\u2019s total volume, which would you choose?<\/p>\n
Why else would agencies go into pitches promising cheaper prices and lower fees, with the planning piece relegated at best to an interesting sidebar (albeit one with great potential to add value to the client\u2019s business) and at worst as a device to justify the buy?<\/p>\n
As previous Cog Blog posts have commented, that flapping sound you hear is of a number of chickens coming home to roost. Over the last few years clients have woken up to the fact that some agencies have not been wholly transparent when it comes to returning rebates. Furthermore, some have had a look at the many vices inherent in buying online space and have decided they don\u2019t much like what they see. And they\u2019ve concluded that if the game is all about money, it\u2019s best for the procurement team to drive the money as low as possible.<\/p>\n
If on the other hand the game is about adding value, acting as a trusted advisor, behaving more like a management consultancy (it wasn\u2019t that long ago that Nick Emery of Mindshare was in the press comparing his organisation favourably to McKinsey \u2013 and he wasn\u2019t by any means the only one), then the challenge is to get out there and sell the value of the service.<\/p>\n
Whinging about procurement is just that \u2013 whinging. Some years ago now BJ&A was commissioned by the UK advertisers\u2019 association ISBA (our equivalent of the ANA or the WFA) to do some work on procurement officers\u2019 attitudes to the market research agencies (a whole other story). We found the procurement officers we interviewed to be serious, committed professionals who understood very well the difference between a cheap-as-chips commoditised service, and the service offered by a true, added value partner. Further we found them quite prepared to pay more for something that demonstrably added real value. The key word in that sentence of course being \u2018demonstrably\u2019.<\/p>\n
ZenithOptimedia positions itself as \u2018the RoI agency\u2019, a positioning much lauded by the press and supported by the usual array of planners, researchers, and analysts. Yet it would seem, if we take Neil Ascher\u2019s words at face value that his agency is beaten from pillar to post by those nasty procurement people who have his clients\u2019 marketing managements so under the cosh that ZOG is forced against its will to provide services valued by the marketing team (but not it seems by the uninformed procurement team) for next to nothing. Thus the agency cannot be blamed if it earns a crust from media rebates.<\/p>\n
Now, who would you say is to blame for that sorry state of affairs? Those doing the buying or those doing the selling?<\/p>\n
<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
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