While media agencies seem to be in a complicated situation at the moment, Beth Shirley tried to find out what their clients – and others who work with them – expect from them, in a story first published in The Media magazine.
What do big companies want from media agencies? In order to make sure they have what it takes, there is rife and sometimes ruthless competition between media agencies and subsequently, some ugly practices have emerged. Price slashes, undercutting, ‘bargain’ deals and more-for-less are all indicative of what has happened to bag the big clients.
“It’s tough out there for media agencies,” says Janet Proudfoot, e.tv’s general manager of research and audience. “Their margins are small and their financial models are constantly under strain, so we are aware that bad practices arise from this.”
Proudfoot, who was head of group media at Standard Bank before recently moving to e.tv, adds that media agencies are devaluing their currency to sign on more clients. “Ironically, this could push a client away. Devaluing yourself impacts a client negatively…I would rather an agency turn work down if they feel they cannot meet a brief owing to price pressures,” she says.
Chris Hitchings, CEO of DStv Media Sales (previously known as Oracle Airtime Sales) feels the pressure on media agencies can be alleviated by the strong relationship they have with their clients. “It is about the media owner, the media agency and the client sitting down together and understanding the complexities. With free-flowing conversation, agencies don’t always need to be in a bind,” he explains.
In reality, some agencies are very much in a bind. A few multinational clients spoke on condition of anonymity, alluding to the sensitivity of the matter. Unanimously, these clients said they were hounded by so many agencies trying to pitch for their business. One of them explained that media agencies pitched “in seriously dodgy ways…trying to get an edge by undermining and undercutting each other to win business.”
“Admittedly, it’s not always the media agency’s fault,” says Proudfoot. “Clients want champagne campaigns on beer budgets and so there is limited scope for them. In the end, media planning becomes commoditised so that money is saved. Many blame the procurement department for this.”
Adds Hitchings: “The media planners bang in a brief and project ratings by plugging into Telmar. What happened to creative problem solving? What happened to media planning as an art?”
He says he believes that finding and nurturing talent is a way that agencies can add value to their clients. “Clients are often ignorant about media types and the media industry. Therefore, offering expert advice and specialist knowledge is key. Again, growing talent is essential,” explains Hitchings.
Both Proudfoot and Hitchings believe agencies should challenge clients and not be bullied by them. The agency is the expert and has to be strong enough to not undermine the industry by price cuts and discounts. “The client sees this undercutting as potentially fatal to a long-term relationship with the agency,” notes Proudfoot.
The skills issue is also a significant challenge. Explains industry doyen John Farquhar: “Media agencies have very little direct contact with consumers. Their knowledge of the target market comes from information provided by client – which is often off-target. The media agencies have very little hard information about what consumers interact with daily: billboards, activation programmes, word-of-mouth, public passenger vehicles, in-store displays, wall posters, sampling and more.”
Farquhar adds that some media agency’s knowledge of communication strategy is limited, resulting in their advice to clients being based on Telmar’s algorithmic evaluation of AMPS data. “Media agencies do not fund any research at all. All they do is massage AMPS data.”
Brenda Koornneef, group marketing and corporate strategy executive of Tiger Brands, says that the world is changing and agencies have to be acutely aware of what consumers want which is to “engage with and experience brands”.
She adds: “We want value back. This comes with the media agency having a thorough understanding of our business and brands which would enable them to be true strategic partners in developing the best media strategy.”
Koornneef echoes Hitchings’ and Proudfoot’s emphasis on skills: “We look for expertise and a strategic ability in helping us to develop a communications strategy that really works for the brands and most importantly – differentiates us in our ability to reach the most effective touch points with our consumers.”
Koornneef lists the ability to work through-the-line; negotiating preferential contracts with media owners; developing media plans that will give the best value for money and the “ability to deliver on what they promise,” as being the most important things she looks for in an agency.
There is unanimous agreement among clients that media agencies should understand a client’s target audience and challenge the client where necessary.
“It is crucial that an agency take cognisance of the nuances in a company and the different market segments they may have to target. I would suggest that Telmar be used as a tool, and creativity, care and common sense be at the forefront of strategic planning,” says Proudfoot.
Times are indeed tough and tentative, but agencies and clients both need to realise they are in this together and have a responsibility to elevate the worth of the industry.
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