Did the Federal Government miss a trick or two in pitching the biggest media account in Australia?
The master media account has reportedly been retained by UM. But TrinityP3’s Stephen Wright argues – regardless of who may or may not have won the account – how Governments, both Federal and State, approach to the appointment of its media agency needs to change.
It’s possibly the biggest prize in media agency land. Depending on the year, worth anywhere between $130m and $240m the Federal Government’s master media buying has long been a closely fought over account.
This week we saw reports that the account was being retained by UM for another three years and while all parties are silent (presumably while final details are being sorted) you have to question whether the approach of the past is still valid today in a very different media landscape.
Master Media arrangements are a throwback to an era long passed when pricing and annual deals with media owners reigned supreme.
It was a means by which a disparate group of products (or in this case, government departments) could enjoy the benefits of centrally negotiated rates where price was core to the delivery of media value.
I’ve worked on these accounts and also within indies, and it amazes me that this is the hill you want to die on. Accounts like this would destroy an independent agency within months. The margins are small, the workload is barely manageable and the reporting/finance function alone requires a team of 20.
You’re kidding yourself if you think anyone outside of the major holding companies could ever win, nor successfully manage, a client with this many moving parts.
Steven, are you implying our federal and state governments just throw out their pre-existing and longstanding audit processes just because some indies want some cash? Do you want a federal deparment to just chuck their Meta ads spend on a corporate credit card too because you can’t facilitate a credit line? Maybe they should get rid of estimates hearings while they’re at it just in case you think that’s also an antiquated approach? There’s a reason $200M accounts are set up the way they are, and there’s a reason they work with the same few agency groups.
Great thinking anonymous.
Aren’t audits supposed to validate the delivery of value?
So you’re suggesting we stay with an inefficient arrangement to comply with an antiquated system of auditing.
Here’s a radical though…we could establish a means of delivering improved media value then work out a new way of auditing and cross checking for delivery.
Lots of smart clients very happy with the value delivered by their indie agencies.
Far more transparent than some of the multinationals.
One centralised buying and reporting agency (large) and a panel of fully integrated media planning/creative agencies to ensure that message and channel strategies are created in unison. Now that is a new way to do things and it would result in infinitely more effective, tax payer funded ad campaigns. You can all have that one for free!
Throw out …no.
ADAPT….are governments completely incapable of managing an arrangement that embraces smaller Australian owned businesses?
There isn’t a single other large advertiser so resistant to change.
A Master Media trading arrangement can still centralise negotiations to ensure value for the $200 million spend is optimised.
Where the current system is flawed is by locking in all the planning for smaller departments to the same single Master agency.
Indies know best how to work a smaller budget and are thriving picking up advertisers from the larger players.
Compliance, auditing and benchmarking might all be a little more complicated but eminently possible with an upside of using tax payers funds to greater effect….and supporting home grown agencies to boot.
Or would you prefer to just roll on another 20 years.
You seem convinced the current system works…….I’m sure it does from a compliance point of view……..but in the delivery of value question marks remain….
A consortium of indie agencies sounds effective in theory, but there’s one glaring and significant government requirement that would be a nightmare in that case – audits.