Jeremy Lee: Agencies don't have to play the closed online auction game

By Jeremy Lee,, Thursday, 27 October 2011 12:00AM

Online auction sites and internet gambling - the last refuges of insomniacs, lonely drunks and those trying to offload hooky goods. And, of course, the hopelessly optimistic, always chasing a good deal.

Jeremy Lee

Jeremy Lee

I'm not a gambling man - it's a mug's game - so my brief flutter with online betting ended as soon as I realised money that only appeared in a small box on a website burned a hole far quicker than the real thing in my pocket. But if I did fancy a wager, then I think the odds on Carat retaining the Santander account are pretty high.

After all, here is an account that has, through its various iterations, been at the agency since November 2005. When the business was last put up for pitch three years ago following the creation of the bank from the embers of Alliance & Leicester and Bradford & Bingley merged into Abbey, the only other incumbent wasn't even invited to pitch. Among those other agencies that did, OMD was one that pulled out of the process.

The reason for this lack of interest is that agencies were asked to participate in a closed online auction, where they were further invited to submit their best media prices with accompanying price guarantees and penalties. It looked like being a dangerous precedent.

It's almost understandable, then, that Santander's decision to put its £27 million media account up for pitch once again has failed to get new-business hearts pounding. Despite offering the opportunity for agencies to get their hands on a healthy slug of business, it just doesn't look that appealing.

It's safe to say that Santander's pitch announcement has been met with a sigh, a shrug and a brief discussion of whether entering the process is a worthwhile or profitable use of agency resources for a client that has a reputation for being high-maintenance.

In fairness, the use of online auctions is the logical conclusion to an agency process where media is largely bought cheaply, warehoused and then distributed like alms to those clients that have the cheapest prices (mainly new business wins). By bringing an element of competition into the process, Santander hopes that it will be getting the lowest price on offer in the market. Whether this approach allows creative or interesting strategies - or, indeed, gives Santander an opportunity to see the best that agencies have to offer - doesn't seem to matter.

But given that many agencies don't seem willing to play along this time round, it's possible that Santander might find its prices won't be driven down any further and that it may have to lump the limited choices on offer. While this doesn't look too much like a particularly good deal, I think it does the agencies that resisted the process proud.

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