Media agencies may be looking for new ways to make a living. Wicus Swanepoel explains why and who is to blame in a story first published by The Media magazine.
I was so disappointed by the special forum to discuss ‘media agencies under threat’ because what was supposed to be a fiery debate, turned into a nursery school year-end picnic.
The panel, consisting of some of our industry’s media stalwarts, was as exciting to listen to as a radio drama in a foreign language. Where were the guts and the balls we usually see from our industry comrades?
Were they scared to upset their clients? Their shareholders? Their international masters?
I have not heard so much tippy-toeing around an issue in a long time. Beautifully crafted statements – none saying what is so desperately needed to be said.
Let’s be real! Did we really discuss whether media should be taken back into creative agencies? That horse has bolted, my friends. Who’s going to tell OMD that they’re moving back in with Hunt Lascaris? Ridiculous.
Let me start by going back a couple of years, when media agencies started. Honestly, most of them offered the same thing (and still do), so the only way to ‘get an edge’ was to undercut each other in order to win some business. Eventually things settled on an unwritten industry benchmark of around 3% of total media spend for media planning and buying services.
Everyone was fairly happy. Until the arrival of what I call the P-people. Procurement.
It’s simple you see, advertising and marketing is a big expense, so there must be a way in which clients could get it cheaper. So they brought in some traders – experts who could get the costs down.
Yes, the day the P-people walked in, all the trouble started.
No longer was what I had to offer of any value. Overnight my skill turned into a commodity. Like an office desk, a pencil or a plastic dustbin.
“So, you don’t want to do it for less? No worries, I’ll just go to the media agency next door. They’ll do it cheaper. Oh, and did I mention that we’re not prepared to pay media invoices on 30 days anymore? We’ll pay on 60 days. Sorry, I know you have to pay media owners on 45 days, but I’m sure you can make a plan.”
Did the media agencies fight back? No, of course not. They complained, but they obliged. Let’s be honest, who is going to say no to business? More so with globally aligned accounts – one has little choice but to accept the abuse.
So with margins getting smaller and smaller, media agencies started battling. They had to make a plan.
One rather obvious solution was just to work their staff harder. Especially the senior ones. They could always take on some more, couldn’t they?
So the senior guys worked harder and spent less time training juniors. Because no one has time to show an intern how to do things when one can do it oneself in half the time. So fewer people were trained. Until eventually the senior guys had enough and started moving to Knysna and Parys to open up and run B&Bs. Disillusioned and gatvol.
And those same stingy clients – those ones who were not prepared to pay for the service in the first place – are now the ones complaining about the lack of senior talent and skill in the industry. Incredible!
Incredibly sad, actually. Am I the only one seeing the vicious cycle here?
You pay for what you get. And you know that annoying little saying: ‘If you pay peanuts…’. But somehow some clients think they will get little Einsteins on their account for the price of cheap child labour.
Surely you can’t walk into a BMW dealership and demand a 7 Series when you only have money for a CitiGolf? Not even the P-people can achieve it! So why then are media agencies expected to deliver that?
Yes, as you can see, I’m angry. Very angry. I love this industry. I love media. And I am sitting watching it falling apart. All thanks to some bean counter in procurement who doesn’t even understand what a media planner does.
But let’s be fair. While clients may have started it, some media agencies have seen an opportunity to score some points. And some business.
Offering to do a client’s media for free for a ‘trial period’ is lower than low. It’s unacceptable. Not only are you raping your colleagues who have spent their lives building this industry, you are killing your own game.
It’s stupid. It’s called suicide. Can’t you see it?
How are you ever going to claw your way back from there? And soon every client is going to expect the same. Free media. Can you hear the P-people clapping? Encore! Bravo! Hooray! And can you hear them laughing? They’re rolling on the floor, thinking ‘stupid media people’.
So how to make some money?
It’s quite easy, actually. Just get the media owners to pay media agencies. So brilliant and yet so simple! Why has it taken media agencies so long to think about that?
So let’s not pretend to be surprised with a certain media agency group’s new ‘trading division’. You’re just envious because they had the balls to put the idea on the table. Officially, formally and legitimately.
Because let’s be honest, they have no choice. Media agencies need to make money – they have salaries to pay (albeit in peanuts).
And are the media owners saying no? Bless them, of course they’re not, because once again, no one wants to say no to business. So, they give better deals and better discounts (and so on and so forth).
A vicious circle. An insane circle.
When and where is this going to stop? Surely we cannot continue like this? We need to put a stop to it or else the whole media industry will implode. And I’m not being dramatic – it will happen. We are all affected by this.
Clients will end up being the only party making any money. And that’s not right, is it? And surely it’s not fair?
So what to do? I have a few suggestions.
Let’s start with media agencies. Why don’t all of you get together and determine a minimum fee for your services? Level the playing field. Then pitches will finally be based on your offering and skill and not on the cheapest deal. You are an important part of the advertising engine! Without you, all those pretty pictures will end up in all the wrong places. Don’t devalue your contribution and underplay your importance by playing the ‘cheap game’.
Media owners, say no! Stop bailing out clients and media agencies. You have rights. Yes, you have the right to say ‘no’! ‘No’ to being raped every time that a client is not prepared to pay. Stop allowing the bullying.
Clients, as a first step, may I suggest that you stop referring to your agencies as ‘suppliers’. Your stationery guy is a ‘supplier’. Who cares what kind of pencil you write with, as long as it writes… and it’s cheap. I’d like to believe that media is something a little more valuable. I’d like to think that media agencies are valuable partners. Treat them as such. Pay them a decent fee for their services. And pay them on time – in the same way that you expect a salary on the 25th of every month and a bonus in December.
So, are media agencies under threat?
At the moment, yes. But they don’t have to be. There’s still time to fix this. Let’s do it!