Don’t shoot the messenger and stop mindless discounting

In this guest posting Darren Woolley hits back at Seven’s James Warburton for his comments that pitch doctors are nothing more than “bottom feeders”.

It is sad and rather pathetic when an industry identity such as James Warburton is reported to be “shooting the messenger” rather than addressing the issue.  

Procurement and “pitch doctors” simply challenge the industry to prove the value, and the industry response is often heavy discounting and price-cutting, a strategy Mr. Warburton is rumored to be well known for during his time in agencies.

As Seven Media Group’s chief sales and digital officer, Mr. Warburton can well appreciate that the easiest sales strategy in the world is to discount, yet time and time again we have seen agencies mindlessly discount to win business.

He is reported as extolling the industry to promote and celebrate its “world class” work, but if you want to end the influence that procurement departments have on the market you really need to not just promote, but prove the effectiveness of their work in building real business value.

If you view advertising as a cost, then the business strategy is cost reduction. In the face of no clear value equation, it is easier for all parties to view the advertising sales process as a cost.

If the industry were to focus on value, instead of cost and demonstrate the return on investment, linked to remuneration, then the equation changes from cost reduction to maximising returns.

He is reported to lament, “Remuneration models have not moved on, in fact they have got worse”. But where are the alternatives from the industry?

Agencies are comfortable with a cost recovery model and often reject our efforts to explore value-based models. They want their cost and the icing too. If agencies and the media were willing to link their remuneration to the value it creates for advertisers then remuneration models will change. Until then it will continue to be a cost accounting process.

So Mr. Warburton, while your intentions are clearly to be helpful, childish name-calling and misdirected blame is not.

Perhaps you could actually be a little more helpful and use your clearly superior sales skills to teach the industry how to sell at a premium rather than a discount. After all, your profits are largely derived through their largess.


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