Are big media agencies serving their clients or the media owners?
In the aftermath of the revelations about media agency practices 303Lowe CEO Nick Cleaver questions whether big media agencies have forgotten what business they’re in?
The recent exposure of murky practices and less than savoury activities within media agencies has raised a lot of questions about the legitimacy and responsibility of media agency practices.
However there is a bigger question worth posing: have some big media agencies simply forgotten what business they’re really in?
If we “follow the money”, are media agencies actually hostage to media credits and concealed margins? Are their most important clients, as in the ones that remunerate them most generously, the media publishers and not their advertising clients?
Media agencies are certainly the major clients of the media publishers; after all aren’t they still, as they were always intended, “agents of the media”?
It’s a far more efficient and effective world for media publishers to be dealing with a few big media agencies rather than hundreds of individual clients. Over and above this, the media agency actually guarantees the media debt as well as potentially committing to percentage shares of consolidated future spend. You can’t blame them for offering attractive incentives to get bigger slices of the action.
And for media agencies, are the big media publishers actually better business partners than the multitude of advertising clients with whom they deal? Maybe it’s more exciting to cut multi-million dollar deals than to think hard about how to effectively take campaigns to market or haggle over the ever-smaller fees. It’s a close alignment that has drawn both partners closer together culturally. After all, there’s an incentive to build those close relationships; to entertain and socialise together. This is life at the top of the media food chain.
However things are very different at the lower end of that food chain where we find multitudes of creative agencies. If the relationship with media owners is the glamour end of media buying, then having to liaise with pesky creative agencies – with their own strategic and creative ideas and their preconceptions of where the media monies should be spent – must be the most irksome and irritating aspect of the media business.
If advertising clients are not work enough, throw into the mix the pretentious creative crowd and you really do have an incentive to work closer with your publishing chums.
Cutting content deals has also helped. These deals may be dull and pointless but throw in the potential reach and frequency, the price, repackage it as “native content” as opposed to advertorials, and “Bob’s your uncle!” The content may have little to do with the campaign strategy but it’s so much cheaper than making something with creative agencies and their production house pals!
Can we really blame media agencies for succumbing to the temptation that the very structure of our business presents? Perhaps it’s time we acknowledge that by segregating component parts of the business from one another you are just setting up disaggregated thinking and petty rivalries; and encouraging media agencies to work hand-in-hand with media owners.
Consolidating holding company media interests into mega media offerings has distanced a very important skill set (media thinking) from the creative process as well as driven media agencies into the arms of media owners.
Here’s a radical thought. If media agencies were bundled into integrated creative agencies would there be a better alignment of interests from client to agency to media owner? The result may be more smaller integrated media/creative shops and media publishers may have to deal with more agencies, but wouldn’t there be a greater focus on the work and how it engaged with people?
So, am I seriously suggesting bundled offerings are less open to shady practices?
Yes I am.
I think smaller less consolidated media budgets would remove the temptation of offering incentives for aggregated slices of the consolidated mega media shop spends. This would assure clients that their media dollars hadn’t been hoovered up into some mega television share deal and that they were operating in a more genuinely channel agnostic environment.
There are those who may feel this whole article is a case of fanciful and misguided thinking and that the status quo in ad land is all fine and dandy.
That’s fine, but there are those who are totally fed up with the whole circus, and that includes clients who will vote with their feet as they look for simpler, more efficient, integrated agency relationships.
- Nick Cleaver is CEO of full service creative and media agency 303Lowe
Well said. Although there is a touch of irony in his concern that media agencies are clouded by vested interested, and yet the solution he proposes is in his own best interests!
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It’s unlikely that many people would suggest that the status-quo is fine and dandy, including most senior media agency types. But this article has been written by someone who has just as much skin in the game as any media agency CEO, it’s just a slightly different shade.
This is the equivalent of a turkey suggesting that Xmas would be much more fun if it were a vegan festival.
At the end of the day clients and the legions of pitch consultants and procurement teams they employ are all professional adults. Most of them go into media agency relationships with their eyes wide open and choose the big agencies exactly because of the price guarantees that those mega television share deals bring. Those who don’t want that, don’t choose them.
There are undoubtedly things that need to be fixed in the media agency world, just as their are in the creative shops as well. Perhaps Mr Cleaver could write several hundred words next week on how ad agencies justify charging thousands & thousands of dollars for resizing international creative and whether the fact that clients are getting wise to practices like this is the reason he’s now so committed to bringing media back into (his) fold.
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This very thought is an indicator that the industry is coming to a full circle. It was the full service agencies who were blamed when clients moved to media agencies. The unholy alliance between media agencies and media owners is a well known secret in the industry circles. Even the so called research data is tuned to suit the deals.
However, the question is, is it going to benefit the client if advertising services are consolidated in to a single agency? I don’t think so.
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The big media agencies don’t give a hoot about their clients, other than how their billings are the enabler to how they really make their money
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When media buying was deregulated in 1997 and the “groups” were born, it was my colleagues at the time from the UK who foretold the challenges we are now experiencing. Took, nearly twenty years, but they may have been right – and Nick might be too.
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Spot on Nick.
What goes on behind the scenes in the Australian media landscape is outrageous.
I can only hope that one day soon the likes of ICAC take a good look at media practices in this country.
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@NoelMagnus – what would ICAC have to do with this?
If you have corrpution to allege, please share – I’m sure Mumbrella would be very happy to publish details of corruption
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@ client side.
If you really are a client, I recommend you read through the past few months of articles regarding unreliable reporting, kickbacks and so on – in Australia and around the world.
Don’t you think ICAC or similar (as mentioned in my initial commentary) would find much of this activity less than squeaky clean?
If not, that’s fine – I’m sure quite a few media agencies would like to talk to you about your media requirements..
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