INTERNATIONAL: Media independents come of age as they branch out beyond Europe

Richard Cook takes a look at how media unbundling has caught on worldwide

Richard Cook takes a look at how media unbundling has caught on

worldwide



Back in 1969, when Media Buying Services became the UK’s first media

independent, it was only the brasher end of the market - brands such as

Ronco, K-Tel and Brut by Faberge - that felt able to take a chance on

the ‘gorillas with calculators’, as the first of these media

independents were known.



Now, nearly 30 years later, around 60 per cent of media is placed by

independents in the UK, and signs are growing that the practice is

taking hold outside its European home base.



In the fast-growing economies of Asia, for example, media unbundling is

still in its very earliest stages, but a recent joint venture between

CIA Medianetwork International and Singapore’s Batey group shows there

is considerable interest (Campaign, 8 December 1995).



In the US, the process is being advanced by the increasing use of the

‘agency of record’ or AOR system, although independent media placement

is still only a fraction of European levels.



Under AOR, clients appoint a ‘lead’ agency for each type of media buying

- daytime TV, regional press, etc - right across all brands, even ones

the shop itself does not handle.



The practice was designed initially to cut down on administration, but

is now also used increasingly as a weapon to improve buying efficiency.

These days a client will insist on seeing proof of ‘good’ buying

performance from each of its media-placing agencies before renewing

contracts.



Zenith Worldwide is one media specialist to take the gamble that

unbundling will take off in the US. Its chairman and chief executive,

John Perriss, who opened seven different locations in the US last year,

views the growth of AOR as a very encouraging trend.



‘The US has already taken a huge step towards unbundling by creating the

agency of record,’ Perriss says. ‘Clients whose work was split between,

say, five agencies, became fed up with getting five sets of invoices for

prime-time, and five sets for news and sport and so on. So [they] just

divided the billing work equally between the five.



‘What is increasingly happening now is that the AOR process is becoming

competitive, and not just an administrative help,’ he adds. ‘For the

first time there is competition on cost per thousands and benchmarking,

which of course is the whole rationale for unbundling in the first

place.’



Western International Media, the country’s biggest media specialist, is

also finding the going easier. Two years ago, Disney apart, around 80

per cent of its billings were spot TV purchases for smaller clients,

typically for companies such as automotive dealers, regional fast-food

chains and exhaust centres. But this figure is now falling, and the

agency - which is now owned by Interpublic - is now beginning to add

more blue-chip clients to its roster.



Nobody pretends that change will come overnight, with both the sheer

scale of operations and the plethora of well-established vested

interests acting as a brake. There are 214 television markets in the US.

Yet a regional client that has business in just 50 of these might bill

as much as dollars 40 million. There are also well-established vested

interests against media independents. But now the market is moving

towards more unbundling, and the smart money is in place to watch it

happen.



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