Media: All about ... Agency/client relationships

campaignlive.co.uk, Friday, 19 November 2010 12:00AM

Andy Pearch analyses the sources of tension at both sides of the industry.

There were spiky observations and erudite debates at the Which Way Now? event, hosted by MediaSense last week. Which Way Now? invited leading influencers from the media industry to share new thinking on the measurement of media performance, the management of agency relationships and strategies for managing change.

The centrepiece of the event was industry research, undertaken in conjunction with Ipsos, which exposed the tensions within the industry and revealed what its stakeholders really think of their peers. Among those tensions were: media buying makes a relatively small contribution to client performance, yet is the most widely and successfully measured agency function; while agencies believe they are becoming more important for clients, media owners believe their influence is on the wane; and while clients say strategic thinking is a pitch winner, agencies believe buying guarantees are the clincher.

The research, which covered 250 industry stakeholders, also showed that while a majority of clients believe agencies act as long-term business partners, fewer think their agency understands their business and that while most clients think media auditing improves performance, few agencies and media owners agree. There was, however, a lot of common ground among attendees. The industry as a whole is preparing to say farewell to old metrics such as reach and frequency and costs per thousand, and is looking forward to replacing them with outcome-based metrics.

The "best practice" model of agency remuneration was called into question with the argument that agency incentive targets lack relevance and can be counter-productive: if media agencies continue to be paid by the media "yard", they will never become strategic partners. For clients, the big issue remains integration - with calls for more collaboration between agencies and media owners in developing joined-up communications.

1. While 58 per cent of media agency folk believe their role is becoming more important, only 25 per cent of media owners agree. Media agencies will do much better work if they take down the barriers between clients and media owners. Clients want agencies to push them into taking more risks. Chris Maples, the sales director at Microsoft Advertising, said media owners need agencies to provide better and less prescriptive briefs.

2. While 70 per cent of the industry see engagement and outcome-based metrics growing in importance, only 8 per cent see media cost and quality metrics growing in importance for their businesses. A new breed of client is comfortable with growing volumes of data, value-based metrics and is keen to test and learn more often. Media-centric metrics are losing currency, as digital media in particular are enabling greater visibility and accountability in media activity.

3. While 61 per cent of the industry agree that media auditing has lowered client media costs, only 10 per cent agree that auditors measure the right things. There is frustration about the contribution from, and messages coming out of, the auditing community. Media trading is set on a downward cost spiral, and differentiation is eroded by over-measurement. Small differences in performance are magnified into bigger issues, yet the real opportunities for step-change value across multimedia channels are being overlooked.

4. While 81 per cent of clients believe their agency acts like a long-term business partner, only 56 per cent of them believe their agency understands their business, and only 11 per cent believe their agency can help them navigate the digital landscape. There was a distinct feeling that client/agency relationships have weakened, in no small part due to cost-based remuneration models.

5. The industry ranks the development of integrated media strategies as its biggest performance driver, while holding a pitch ranked the weakest performance driver. According to Phil Georgiadis, the chairman of Walker Media, the key to integration is coherency - integration doesn't mean using ten media channels to deliver a number of messages. Planners are encouraged by IPA TouchPoints research to rank media but, in reality, all media are primary. There is nothing wrong with doing less, or sacrificing reach, to deliver a clearer message. Results are what count.

Andy Pearch is a founder of MediaSense.

WHAT IT MEANS FOR ...

ADVERTISERS

- The MediaSense/Ipsos survey suggests that clients will be more comfortable with a model based less around cost if agencies can supply a more data-centric model.

- Also, it showed a demand for greater levels of integrated thinking between clients and agencies.

- Research also seemed to show that there is little relationship between holding a media pitch and delivering better performance and that better integrated media strategies are more likely to deliver this.

MEDIA AGENCIES

- Clients indicated that they want their agencies to push them harder to take risks.

- Also, advertisers seem to want their agencies to invest more in data insight if they are to become more trusted partners.

- There seems to be a clear perception problem in that while a majority of media agencies believe that their role is becoming more important to clients, only a minority of clients (25 per cent) believe the same.

- However, there was universal acceptance that media agencies are the logical guardian for the media communications process, so long as they make the necessary investments in time and skills.

MEDIA OWNERS

- Media owners expressed a desire for less prescriptive briefs.

This article was first published on campaignlive.co.uk

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