FORUM: Is there a future for medium-sized media shops? - Is the media market polarising into ’one man and his dog’ operations at one end and megalithic corporations at the other? That’s the tempting conclusion to draw from Carat&

You can make a case for saying that small is beautiful and there are those who will tell you that bigger is better. But fair to middling?

You can make a case for saying that small is beautiful and there

are those who will tell you that bigger is better. But fair to

middling?



Who wants to be average? As creative agencies have been aware for some

time, the ’somewhere in the middle, really’ branding just doesn’t

work.



This was certainly a major factor behind the recent merger between TBWA

and Simons Palmer (Campaign, 24 January).



And last week, when the Carat Group decided to scrap its YMG brand and

fold it into TMD Carat, we had a timely reminder that this may well

apply to the media market too.



TMD takes on YMG’s claimed pounds 60 million in planning and buying

billings - the only immediate casualty is the Evening Standard account,

which clashes with TMD’s News International business - and YMG’s

consultancy business will be handed to Carat Research, relaunched as

Carat Insight.



Ray Kelly, the chairman and chief executive of Carat UK, confirms that

the move has much to do with YMG’s size. ’It’s increasingly hard for

those on middle ground to thrive. There will be smaller,

tender-loving-care operations that can offer clients access to senior

management. But only people like us can offer significant resource

levels in the research, planning, and information technology systems. We

have extremely high-quality research - both on client-specific basis and

across a bigger base to understand better the communications process. We

have the resource to keep moving ahead. Smaller companies can’t do that

- it’s a question of economies of scale.



’There is always room for entrepreneurs but I do think that the market

will continue to polarise, especially as client conflict issues become

increasingly manageable.’



He would say that, wouldn’t he? But one thing is true - there aren’t

many media operations left in the middle ground. The darlings of the

’it’s better to be clever than big’ centre ground, Pattison Horswell

Durden, have evolved into the major-league outfit, New PHD. And,

perversely perhaps, some smaller creative agencies have been opting to

turn themselves into full-service agencies with their own media

departments. Perhaps even Kelly has a misplaced faith in entrepreneurs.

Perhaps the 90s generation of media middle management have suffered from

the recession - stripped of the nerve to launch a new wave of

start-ups.



Is the game up or is there a future for specialists with billings in the

pounds 25 million to pounds 100 million range? John Ayling, the managing

director of John Ayling and Associates, obviously thinks so. And he

cautions against reading too much into the demise of YMG. ’The merger of

YMG with its parent company is probably more a result of perceived loss

of personality or identity since Mike Yershon’s departure as YMG’s

chief. There is also the issue of saving in overheads. These are

probably more important factors than the size of YMG as a company.

Recently expressed concerns over Zenith Media’s development in the

post-Christine Walker era surely underline the fact that personalities

can be considered as important as size,’ he states.



Ayling argues that these days talent and experience are just as

important as the ownership of bells-and-whistles systems and research

tools. In any case, billings size is not a discriminator on these or any

other media buying criteria. He adds: ’Recent trading practice issues

have highlighted the problems of poorly controlled buying volume and the

potential - allegedly - for inexperienced clients to get a raw deal

within big buying points. Growth is important to all agencies but

advertisers want a media planning and buying operation that has a point

of difference, has integrity and is a company with which they can

develop a business partnership. Those are the crucial factors.’



Glenn Burton, the chairman of MBS Media, insists that the debate about

size is unimportant: ’The implication that medium equals average -

average talent, average prices, average resources - is nonsense. We are

talking about a relative term. Your cut-off point of pounds 100 million

will come as a surprise to those with billings around that level. And

medium-sized is a transitory term. Most large companies have been medium

on their way up, and it hasn’t stopped them from gaining in size.’



But isn’t that growth harder to achieve these days, especially when the

bigger clients are centralised and locked into the big buying points?

’At MBS we are mining a rich seam of business from clients who do not

wish to use the services of a big buying group,’ Burton counters. ’From

the client’s point of view, being a bigger fish in a smaller pool is

important. So is the fact that their business is really handled by more

senior and more talented people. In our experience, the belief that

volume delivers the best price is rarely borne out in reality. Time

after time, when we win new business from larger buying points, we are

able to improve the planning and media value.’



Steve Booth, the managing partner of Booth Lockett Makin, says that the

systemised commodity approach offered by big specialists may be

appropriate for many clients. But he can’t see why this should be

imposed on those who want a different approach. He says: ’An

increasingly competitive media marketplace is emerging. This natural

competition allows for value to be negotiated by means other than blunt,

bulk negotiation. Quality players will thrive irrespective of their

size. Those agencies that can demonstrably add value to an advertiser’s

business, and stay ahead of market developments, have a prosperous

future.’



Booth agrees that IT systems and research do represent a hurdle that all

serious players in the market must negotiate - but it’s hardly the

insurmountable obstacle that the big players say it is. ’I believe that

many agencies over-invest in research to compensate for an otherwise

lack-lustre offering. Research becomes a poor surrogate for original

thinking and innovation. Size isn’t the issue - agencies will thrive if

they offer differentiation in a market where many of the players look

very similar.’



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