FORUM: Why did CIA decide to dump its smaller clients? - We all know that media companies are the sorts of tarts who just can’t bring themselves to turn a client down. So just what is CIA Medianetwork up to? Last week it decided to drop 30 of its

We’ve known for many years that railways are occasional martyrs to a strange-but-true phenomenon known as ’the wrong sort of snow’. Last week, we discovered that advertising suffers a similar problem - the wrong sort of clients. At least CIA Medianetwork does. Or did.

We’ve known for many years that railways are occasional martyrs to

a strange-but-true phenomenon known as ’the wrong sort of snow’. Last

week, we discovered that advertising suffers a similar problem - the

wrong sort of clients. At least CIA Medianetwork does. Or did.



Last week the media specialist announced it was ditching 30 clients,

accounting for a total of pounds 6 million in billings. This

’streamlining’ process, it claims, will ensure that it will be able to

provide a high-quality service for its remaining client base. And this

is nothing - allegedly - to do with size, though the clients are, almost

by definition, small.



Obviously, the average billing of this group of clients is pounds

200,000. But, according to CIA, this is not the point. The reasoning

behind this move is that CIA Medianetwork is keen to concentrate on

delivering value-added services.



The wrong sort of clients? They should be so lucky. Is CIA being

precious?



Is it really being hampered in its pursuit of communications strategy

excellence by clients that want plodding, bog-standard commodity

trading?



Some will see this as the ultimate proof that CIA has fully evolved out

of the ’buy it cheap, pile it high’ bucket-shop ethos it espoused for

many years. And if you were being ultra cynical you’d say that if this

is a part of a rebranding exercise, pounds 6 million is extremely good

value for money.



Mike Elms, the chief executive of CIA Medianetwork, explains: ’We’re

simply applying the sort of marketing discipline we encourage our

clients to adopt. You can’t be all things to all people.We buy spot and

space very well, but our product now goes way beyond that to encompass a

broad spectrum of media communications skills driven by a coherent

strategy.



Not all clients are in the market for that and we have to focus our

resources on those that are.’



You could argue that this is a bit extreme. After all, big agencies

these days pride themselves on being able to juggle a wide range of

discrete operating units under one umbrella organisation. In the

multi-disciplined marketing services world, there is surely room for a

big company like CIA to run a ’wrong sort of client services’

division.



On the other hand, perhaps it’s good for the industry as a whole that

someone is prepared to take a stand against the rough-trade end of the

market. Isn’t this inevitable? Especially if the top operators are

serious about supplying value-added services and acting more as business

consultants than middle men on a cut. Shouldn’t we applaud? And perhaps

it proves that there will always be a place for smaller media

operations. Presumably the CIA refugees will have to apply for asylum

somewhere.



’We’ve always sought to provide added value for every client,

irrespective of their billings size,’ says John Ayling, the managing

director of John Ayling and Associates. ’The issue is really about

profitability - every advertiser’s business situation can generate media

and communication opportunities for media specialists. Investing in the

people, the research and the resources you need to put behind the brand

will only be a problem if the fees or commission haven’t been negotiated

sensibly in the first place. We have a small client who pays us 30 per

cent agency commission. He’s certainly not complaining about the service

value and the ideas we come up with, and the return justifies our

investment. Business partnerships of any size should incorporate mutual

trust and respect. They should also respect professionalism and a

sensible bottom line.’



Mike Sell, the managing director of Total Media, says that what CIA is

recognising - and this should surprise no-one - is that successful

relationships between media agencies and their clients will always

depend more on ’fit’ than on agency size. ’When an agency becomes a big

volume player, as CIA has become, it becomes less well geared to the

needs of the medium or smaller advertisers - after a while, the horses

cease to run on the right courses. Given its staff-to-billing ratio, the

agency that grows big can no longer make the profit that it feels it

needs from smaller clients.



As a result, the clients begin to feel neglected because they are not

getting the level of service they want and deserve.



’So from the agency’s point of view, the CIA move looks entirely logical

and it should be applauded for recognising that some of its clients

might feel more at home elsewhere.’



Some buyers would take issue with some of that. It’s a pretty well-known

fact that the top five buying points actually make their highest margins

from clients spending less than pounds 1 million - largely because they

charge full commission. On the other hand, the margin might not matter

all that much when the absolute sums involved are so small.



’I think what we’re seeing highlights the problem of being a low-cost

supplier in a complex market,’ Paul Taylor, the managing director of BMP

Optimum, comments. ’I’m sure that some companies have found themselves

locked into awkward arrangements. There is still a lot of commodity

business around and the reaction of some companies might be to drop

smaller clients in favour of the bigger ones.



’Billings size is an irrelevance. It is all about whether the client is

willing to pay for the levels of resource, the quality of service and

the calibre of staff. Without those, you will not have the ability to

get more out of the client’s media money.’



And Mark Craze, the managing director of TMD Carat, says that the CIA

move isn’t exceptional: ’In principle what it is doing is absolutely

right.



In reality, agencies do it all the time - it’s what we would call good

housekeeping. But why do it in public? This is a thing between agencies

and clients.



’Every company has commercial decisions to make and has its own criteria

as to how it is prepared to work. In media, as in most businesses, 80

per cent of income comes from 20 per cent of clients and you will look

at every client and assess what they contribute to your business. With

us, as with other agencies, there will be a number of factors involved.

I certainly don’t think that this has any implications for the industry

as a whole.’



Perspective, p22.



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1 Job description: Digital marketing executive

Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).