After decades in the industry, Virginia Hollis highlights the plight of media agencies.
I’ve been involved in media agencies most of my working life, which is a long time. From the difficult start of trying to get the South African industry to accept media agencies, then their heyday, to the difficult times of today. I have seen lots of changes. Some are great and some are not. For me, no matter what media, this is one of the most exciting working environments in the world; but then, I don’t really know any other.
So I’ve been asked why I moved away from the cushy safety of a big corporation to go and be on my own? Simply, I’d had enough of the stress of running a big media agency. You can ask anyone in senior management in a media agency and they will tell you that it is tough out there. Your margins are squeezed on a daily basis, you have to keep your headcount down because you can’t afford to increase overheads, and you still have to deliver a superior quality product to demanding clients.
Understand: the purpose of writing this article is not to trash anyone, especially media agencies; on the contrary it is to highlight their plight.
I believe that media agencies are still in a very strong position in South Africa. There are some great and very experienced leaders. They know their stuff and I have huge respect for my contemporaries, as does the rest of the industry. But the problem is, who is coming in behind them? They cannot be there forever! Who’s going to take over? This is where the problem lies. Right now the future is not rosy.
I don’t think I have to tell anyone that a lot of the media agencies are under-resourced, and this is for a number of reasons.
1. There is a serious lack of skilled staff in the industry. All media agencies do is steal from each other. Media owners take agency staff to increase skills in the marketing services areas and they freelance.
2. The ever squeezing of agency remuneration by clients with the clear expectation that they must do more for less.
3. Inability to increase headcount because margins are tight.
So what do you do? Someone needs to do the work, and this is where the industry runs aground. Juniors move up the ranks too quickly. While this is terrifying, I understand why it’s happening and everyone is doing it. But this quagmire comes with a huge downside – inexperience all too often equals mistakes.
Think about it: the average media buyer is probably in control of anything from R20 million to R100 million worth of billings. It is an enormous responsibility, regardless of the size of the portfolio, and one mistake could cost the agency hundreds of thousands of rands and cost the buyer her job. So imagine you have a youngster who has come into the agency, has been given three to six months’ training (if they are lucky) and then they are left to handle huge portfolios. Sure there will be someone to oversee them, but they cannot watch them 24/7. So when mistakes happen (and they do) the question is, who’s really at fault? Can you really blame the inexperienced buyer, or is it the system?
I’m not going to even mention how long it takes to train a good strategist, but it is – suffice to say – a long time. There isn’t one agency in town that can tell you that they aren’t in the market for at least one, if not more, strategists. So what ends up happening? Again, they promote people too quickly and load them with work that is way beyond their competence level. Clients get substandard work.
Having worked in an internationally-aligned agency for many years, I was always gobsmacked at the number of staff the overseas agencies have available when there is a major pitch! They have whole departments whose sole purpose it is to fill in requests for proposals, do all the projected cost per rating points, and co-ordinate countries – and believe me they send you ream after ream of forms to fill in. We don’t have that in South Africa. We have to load up our good staff to help out!
Staying with pitches, it amazes me that clients want to meet the people you intend putting on their business if they award you their account. I think that there are very few agencies in South Africa that have staff that are not fully deployed on other businesses. New business comes in and you have to increase staff count. And in these tough times, good media staff know that they can command huge salaries. So you have to staff clients’ accounts with less people!
I know that it doesn’t always seem like it, but media agencies really value media owners. They are very important partners and they make agencies look good with clients. And I understand their frustrations with the agencies. All too often I’ve heard media owners complain that planners never have time to see them, and they don’t reply to emails and phone calls. I know that they are not being deliberately obstructive; they are just seriously time-strapped. There are only so many hours in the day and if you give up an hour to chat to a media owner about something that is not necessarily relevant to work you are currently doing, you have to make up that time. I think that there are very few good media people who don’t have to work many extra hours. So, media owners, please be a little more understanding. I will also add that rudeness and lying from either side is unacceptable.
But to bring this back to where I started: large media agencies are owned by internationals and they are driven by the bottom line, just like any other business. If marketers continue to demand more and more for less and less, the already tenuous situation agencies find themselves in is going to amplify. You have to start looking at the value your agencies give you and remunerate accordingly. You can’t allow procurement to run agency negotiations, they don’t get it! They look at agencies in the same way they look at buying stationery.
The system has been cracked in so many places over the last couple of years that it is going to take a lot of gluing and time to put it back together. And quite frankly, if agency financial woes were fixed today, it would still take years to normalise because there is such a skills shortage. But that doesn’t mean “leave it and hope it will sort itself out”. Absolutely not. Media agencies have to be remunerated commensurate with the demands clients place on them.
Clients have got to start accepting that the media function is equally, if not more, valuable than creative. Clients need to look at what they pay media and compare it to other disciplines.
And while you are doing that, consider how much money you invest in media and ask yourselves, are you being fair?
Where the communication industry differs from others is that the only real assets we have are our staff. And the challenge that agencies are constantly faced with is to keep costs down. So, Mr Client, when you review your media agency and one of your issues is that you are not getting quality work, before you complain, take away their bonus, reduce their fee, ask yourself if you are being fair. Are you paying your agency enough to warrant the demands you are putting on them?
The media agency resource situation is fixable; it will just take money and time.
This story was first published in the October 2012 issue of The Media magazine.