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Searching for real value

The true value of media was heavily questioned in 2009 due to the dominating role that procurement played. A client, agency and the consultant all reveal what they believe gives media its true value.

When Diageo’s global media procurement director, Kester Fielding, took to the stage at the Festival of Media and declared that he was not a bogey man and in fact a human being there were chuckles from the audience. Whether the laughter was from delegates disagreeing or agreeing is unknown, but one thing that is for sure is the dominance that procurement has had in the past year.

While 2009 has been branded many things from the ‘year of digital’ to the ‘year of the discount’, it was definitely the ‘year of the pitch’. Be it local, pan-regional or global, everything appeared to be up for pitch last year and the true value of media was put under a microscope as almost all pitches came with the description of looking for either consolidation or more value, or in some cases both.

According to Fielding the pitching process can be arduous to clients and doing it may sometimes be simply a result of peer pressure and what is going on in the wider industry: “There were some special circumstances post 2008 and there were pressures. It was a time for us to revaluate our costs and media.”

“The [media agencies] we are dealing with are the people that we are going to have to deal with years later. We have gone for as much added value as we can get, while recognising that we have to build long-term relationships.”

Fielding said that he would never be ashamed of looking for the best deal, and that it’s not always about being the cheapest.

“Procurement professionals do tend to have the good habit of questioning things. It is not just cost focused, it is about value - it is an intelligent way to look at it. Inflation is not a good thing for our business, and where we can get a better deal we will,” explained Fielding.

However, Jerry Buhlmann, Aegis Media chief executive, warns of the hazards of putting business out to pitch too often: “Clients benefit from open, long-term partnerships with agencies and a constant repeating external review process ultimately devalues the contribution any agency can make.”

You can’t hide from the fact that media pricing dominated discussions last year and other key marketing elements, such as strategy, creativity and ideas, were left to the side. Along with price guarantees, 2009 saw online live auctions become the tools of choice for some cost conscious marketers.

“[Online auctions] create a situation that is as close to reality as a PlayStation game is to a real battlefield,” said Buhlmann. “Whatever is entered into these online templates the only certainty is that no schedule or plan will ever in reality be the same.”

Undoubtedly reckless price guarantees made by media agencies last year will be putting them in a difficult place in 2010 as they try to make good on the promises that they made to win business on rock bottom prices. However, Fielding stopped short of sympathising with agencies and instead blamed them for the situation that they find themselves in. He criticises media agenices for not being good enough at proving their worth to clients.

According to Fielding, cost is a reflection of value. “If a client will pay for it, it is valuable.” Expert advice is not a commodity, he explained, but part of what media agencies offer is. But he also emphasised that agencies had work to do to improve their role.

“The key thing is understanding, and do clients understand the value they get from media agencies?” he questioned. “Design agencies and advertising agencies do a better sales job and they are more convincing that they are working in the client’s best interest.”

Just as Fielding is unapologetic about searching for a better deal, Nick Manning, chief operating officer, at Billetts believes that agencies are to blame for fostering this culture; even though they may complain about it.

“While the media agencies are quick to complain about the commoditisation of media, they respond with enthusiasm at the opportunities to win new busines, at the drop of a procurement director’s hat.

“Clients can be said to be at fault for looking through the wrong end of the telescope when it comes to media, but they can hardly be blamed when they have effectively been encouraged to do so by the agencies,” argues Manning.

If agency, client and procurement people holding the purse strings are ever going to agree on the value of media there needs to be a ‘back to the basics’ approach.

“In recent times the advertising industry seems to have lost sight of its core purpose, and has become obsessed by the novelty of the newer forms of media on the one hand and massive media price discounting in the traditional media on the other, with effectiveness relegated to an after-thought,” says Manning.

While Buhlmann welcomes procurement due to the fact that it forces agencies to be more efficient in how the operate, he warns agencies that the onus needs to be on them to take the current opportunities of better engagement and insight to redefine value to clients.

“In the new ecosystem of communication where everything is connected we understand and are able to track the fingerprints of the consumer down the purchase funnel,” explains Buhlmann. “Better insight, understanding and product gives agencies the opportunity to differentiate and add value.

“The best value creation I have seen in media is when new insights give clients the confidence to approve radically different media plans which change the entire mix of channels and apertures, improving effect but reducing spend by up to 50%,” he says.

Clients are looking for insight to be used more strategically by agencies; a possible first step to agreeing on what media’s value is.

Martina Lacey, London