Ian Manning recently returned from living and working abroad. He believes that South African media agencies could really learn a lot from their foreign colleagues’ experiences.
After 10 years in living in the United Kingdom and working in media agencies in Europe, I’m often asked what we can learn from them. I spent a good deal of time in regional roles listening to markets saying “but it’s different here”. Perhaps some of that is true, but only in some very specific areas. There is a still a huge amount to learn.
The UK media marketplace was under significant pressure a decade ago. There was a downturn (and threat of recession); procurement was putting significant pressure on agency margins; there was still a feeling from some creative agencies that media should be in-house; and there was a perceived dearth of talent. Sound familiar?
Fast forward 10 years and the UK media market is booming (by comparison). Media agencies are, more often than not, perceived as the lead agency (as opposed to the creatives). They account for a disproportionate part of agency group growth. Media agency CEOs are fully represented on international group management teams, and recruitment drives see better and more qualified talent queuing to get in.
And this, to me, highlights the key lessons to be learnt. Not once in 10 years did I hear “the model is broken”, “we should go back into creative agencies” or “procurement is really causing problems”. Nope, not once – not even over a warm ale in a local pub. The reaction to these supposedly insurmountable challenges was typically British. Stay calm, don’t panic and innovate. This was not huge game-changing stuff, it entailed simple and obvious changes to the way agencies were run.
Agencies immediately realised they needed to broaden the talent pool. They looked at clients, they looked internationally and attracted the top talent from far-flung places and different industries to bring new perspectives. One team I worked in had people with degrees like psychology, law and engineering. Not a media degree in sight! I’ve got nothing against media degrees, and my point is more the importance of diversity of thinking. An engineering degree teaches attention to detail, a law degree argument skills and a psychology degree human behaviour. Imagine how strong that team was.
Media agencies – and to be fair, the entire communication agency world – very quickly realised that to be taken seriously, they needed to be more serious, more professional. Clients are looking for business solutions to business problems and are spending vast sums of money to find them. Agencies soon realised that all the benefits provided by allowing media owners to fund staff morale, via afternoons in the pub or trips to somewhere fun but irrelevant, were outweighed by the risks.
Yes, the risks. For every trip billed as “relationship building”, there is a client saying or thinking “if you have time for that, I’m not prepared to pay you as much”. Media agencies had opened the door for procurement to push down prices by “proving” they weren’t adding enough value – or that was the perception. Quickly the UK market became more professional, more efficient and leaner.
Let’s not pretend that entertaining is not an important part of the business; it’s the scale and regularity that shifted. It was downscaled and made more relevant to business – sessions at London Business School versus afternoons in the pub. Overnight, they became business partners for clients, not booking agents. And it wasn’t long before they started to grow, the big communication groups started to invest and they became more focused on value for clients, not just discount.
An increase in professionalism and a wider talent pool allowed agencies to step outside the traditional role of media buyers and offer new, often higher value, services. Today, in most UK agencies, digital accounts for as much as 20–30% of revenues. Digital was identified very early on as a business tool that clients needed, but they especially needed someone to provide advice and solutions.
Media agencies were best placed to deliver this. We had access to the budgets, the marketing plans and naturally have an aptitude for return on investment (ROI), which is where digital really comes into its own. Digital marketing is made for media agencies, yet many South African agencies have been slow to integrate this, choosing instead to have specialist suppliers.
The second area agencies invested in was communication planning. The market had become more complex, with more options and tougher investment decisions. Again, media agencies were able to step into the breach. Only media agencies have the right blend of skills, tools and aptitude to do proper communications planning. This is ultimately about investment decisions across a wide range of marketing options, based on a blend of ROI and consumer insight. Both are areas in which media agencies have traditionally excelled.
Finally, media agencies invested in ’beyond advertising’ solutions: most of the agencies launched variations on activation, content or innovation units. By providing communication planning, traditional media planning/buying and activation solutions, media agencies stepped up to the main table and gained some revenue in the process.
That said, they also put real focus into delivering what procurement was looking for: savings. The market had become increasingly ’strategic’ and focused on non-traditional solutions – which, coupled with the growth of digital consumption and the relative decline in circulations and prime-time viewership – led to significant pressure on the role and value of traditional spots and space. Group trading was born.
Media owners realised they needed the media agency to assist them in getting their value equations right to protect their share. Agencies and media owners began to work together to develop new trading models based on mutual benefit for the client and the agency, ensuring that value was being created at every stage. No longer was the debate about straight discounts of a (fictional) rate card to deliver (fictional) savings, but rather about the cost of audiences and the cost of positive brand response.
Agencies and media owners started to work more closely together to find solutions. Sometimes this was group discounts, sometimes programme production, sometimes research and sometimes inventory trading. The point was, nothing was ruled out. If it delivered better value for the client, it was considered. The US federal Public Accounting Reform and Investor Protection Act (otherwise known as SOX) ensured transparency, so everyone was happy and the industry thrived.
So, it isn’t a question of what can we learn, but more of ’do we want to?’. We will experience many of the same challenges, and a few more. There is the opportunity for our media agencies to look and learn from what has happened overseas, and incorporate it with some of our own unique issues and our own unique entrepreneurial spirit. We can skip the parts that didn’t work, focus on what did and come up with new and more innovative options.
Let’s not focus on the past, but focus on what promises to be a bright, long and happy future for media agencies. If we get this right, I believe we will have innovative, world-class media agencies full of talented, exciting and challenging people. Moreover, we will have our pick from a queue of talented people desperate to get in and add their own innovations to make the industry their own.
The question is, are we up for the challenge?
This story was first published in The Media magazine.
