Building relationships based solely on price will never lead to growth
Instead of concentrating on CPMs, more marketers need to focus on finding the right approach to media, says Speed’s Ian Perrin.
There has been much debate in our industry around the role of procurement in media strategy, the cut-throat nature of pitching based on price and clients obsessed with ever-lower CPMs. Some say this is the new normal and we should get used to it. But I call bullshit on that.
Not because I don’t believe that price is important, it is, but it’s only one metric. And if we focus exclusively on it, we end up undervaluing the importance of value. Creating value is a better way to drive growth than cutting costs, and let’s face it, creating value is what our industry exists to do.
How can media demonstrate the value it creates?
But the problem with media is the difficulty in tangibly demonstrating the value we create. There is no common currency that defines it from either an intra- or inter-media perspective. The impact of advertising is simply too complex to boil down to a simple formula and so, when marketers go out to pitch, inevitably, many opt to build a relationship based on price.
A nice argument, Ian. Not all CPM’s are created equal and some are definitely worth paying more for. If a client can be helped to understand all the metrics that make up success for their business, then CPM costs are most often identified as being just one of the things that add to the bottom line.
Headline says it all, nail on the head for Australian businesses.
Constant drive for top line revenue without looking at sustainable margins
It’s ok to say no to business if it’s not contributing to your bottom line