What should marketers get their procurement departments and auditors for Christmas?

Nine’s Richard Hunwick looks at the year that was and asks if a nexus, driven by both procurement and auditors, is attempting to drive media prices to a rate which will hobble marketers in 2021.

’Tis the season for giving and it’s fair to say that adland is having a merrier Christmas than many of us expected six months ago.

When you attempt to describe 2020 as a year, you can pretty much pick your cliché: “extraordinary”, “unprecedented”, “challenging” – they all apply. And they are all adjectives that in part describe a year where we discovered what would happen when marketers temporarily turned off their marketing spend, as COVID-19 shook confidence and supply suddenly dramatically outstripped demand (i.e. leading to a drop in price for much of the inventory in the market).

A lot has been written about this collapse in ad spend, but also about what the return in confidence has meant for brands and marketers who have rapidly moved to restore their marketing spend as various states come out of lockdown (with Melbourne the last to return to our “new COVID normal”). To me this has been one of the exciting lessons of COVID-19. For the first time ever, marketers have really tested what it’s like to (largely) turn off the tap of much of their day-to-day marketing spend and have clearly seen the real dollar value of their advertising investment.

Marketing is and always has been an investment, not a cost. Lost share of voice and brand awareness can quickly translate to lost real dollar sales for brand. The resurgence in brand advertising we have seen in recent months and weeks as we moved into the holiday season, particularly on television, clearly reflects an understanding that now is a time to return to fundamentals and drive not just short-term sales, but also the opportunity that COVID disruption has given shrewd marketers to capture market share for the medium and long-term.

In terms of the market, we are now seeing the inverse of what we saw six months ago. COVID saw the bottom largely drop out of adland as everyone hit pause on significant parts of their spend, but today competition has never been fiercer. New competitors (i.e. e-commerce marketers) are active in the space, together with their traditional competitors, and this leads us to the question of what’s happening to price.

In a normal market we’d expect price to hold (or dare I say, even rise) given that demand is significantly outstripping supply. However, we are seeing some significantly unrealistic price expectations coming from certain quarters.

Some of this is naturally driven by procurement departments within brands. This is nothing new. Ask anyone in marketing, agency or media owner, about their views on procurement over a beer and you’ll get a clear picture of what many in our industry think about departments that all too often focus on marketing as a cost, yet fail to look at the return or growth that the investment drives within its respective business.

But most troubling to me in recent months has been a new nexus between procurement and the marketing industry’s auditors, who seem intent on resetting the price of media at a COVID level amongst an opaque pool of clients that no one has ever seen and at levels that are completely out of the realms of reality.

Now on one level you might think, “Well, of course he’d say that”. And you’d be right to say I have always argued for a higher, not a lower price, in market. But that does not invalidate what’s occurring in market where some are seeking to capitalise on the deflation we saw earlier in the year (particularly between April and June).

Marketing auditors will tell you quite rightly that they measure history – but increasingly they are moving into a forward-looking, consultancy role. In that role you have a responsibility to the client to look ahead, and taking a price from six months ago, or even a year ago, fails to reflect many of the fundamentals at play in adland today.

Stuck in the middle are marketers looking to drive business growth and brand value, but who, of course, want to ensure they are getting value for money, and agencies who increasingly are being held to account and remunerated against dubious and often unachievable media metrics set by an external party, rather than for doing good work and driving client business outcomes.

In some ways, it feels like what some procurement departments and advertisers are asking for this Christmas is a time machine that would allow them to go back and capitalise on what was a black swan event in our industry – one we hopefully won’t see again in our lifetime.

So what should marketers get their colleagues in procurement or their marketing auditors this holiday season? Well I think they should invite them lunch either in December or even in January when everyone returns refreshed and renewed.

Why not bring your agency along too? Now is truly the time for agencies to challenge some of the assumptions that procurement and auditors might bring to the table, presumptions which ultimately risk stifling both day-to-day creativity and innovation, and also those brilliant “outside the box” ideas that drive growth and can truly transform a brand and its market position.

So, use the lunch to have a real conversation around the marketing department’s budget and why it isn’t just a cost to the business, it’s actually an investment – and a powerful one at that.

The brands and marketers that succeed in 2021 will be the ones who recognise two things: that price is invariably a reflection of the quality of the inventory they are getting, and that those who invest will be the ones to capitalise on the opportunity that exists in an economy still recovering from the impact of COVID. We need to focus on the opportunity and break down long-term and negative preconceptions that risk hamstringing what should be the growth engines of all our businesses.

Richard Hunwick Nine’s Director of Sales – Television and Radio


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