MEDIA: FORUM; Is the end in sight for smaller media operations?

Leagas Delaney is to ‘outsource’ its TV buying. Because it retains control of planning, it says that the media service it offers clients is largely unaffected. Brave rhetoric? Or a fundamental truth? And is the agency right that even medium-sized media operations will soon be edged out of the TV market?

Leagas Delaney is to ‘outsource’ its TV buying. Because it retains

control of planning, it says that the media service it offers clients is

largely unaffected. Brave rhetoric? Or a fundamental truth? And is the

agency right that even medium-sized media operations will soon be edged

out of the TV market?



Another full-service agency bites the dust. Leagas Delaney may beg to

differ, but when an agency is no longer able to buy its own TV airtime,

then it’s not really a full-service operation by any conventional

understanding of the term.



Last week, it decided to hand over TV buying responsibilities to Abbott

Mead Vickers BBDO, its parent agency. Leagas Delaney obviously believes

that TV buying is a business that only the very biggest operations can

afford to be in. It predicts that by the end of the decade there could

be only six buying points in the UK TV market. That in itself is an

alarming prospect. When the buying circle becomes that exclusive, then

the buyers will start acting more like sales points - after all, that’s

how advertising agencies came into being in the first place.



Leagas Delaney argues that combining its billings with Abbott Mead’s

will give the clients of both agencies more clout in the TV market. More

clout leads to cheaper airtime as negotiations become ever more

dominated by volume discounts.



Strangely, though, Leagas Delaney maintains that the move - it refers to

it as an ‘outsourcing’ of TV buying - will not materially affect its

media service. It still wants to be regarded as a full-service agency,

insisting that full service is about the control that the creative

source has over the media placement. This, the agency argues, will not

be affected.



Television planning and buying is the most complex, and arguably the

most important, function undertaken by a media operation. Can agencies

that ‘outsource’ the buying function still maintain that they’re in

control?



Jerry Fielder, the chairman and media director of Leagas Delaney, thinks

so. ‘I think it’s clear that the TV market will become entirely

commodity driven, which means that scale will become the key

discriminator,’ he says. ‘It became clear to me that we had to protect

our clients from those market forces. We could have continued as we were

for at least the next couple of years, but we decided to be proactive

and reap the benefits as early as we could.



‘It is no secret that I have always been an advocate of full service and

of bespoke solutions to advertising problems. But that doesn’t

necessarily mean that the creative and media people actually have to sit

in close proximity to each other. The key issue is that there is

genuinely some form of synergy between creative and media minds. Abbott

Mead is the best fit I can possibly find. We can gain access to its

scale and we can use it as an extension of our media department.



‘And I’m not sure that clients are all that concerned with structural

details - what they will be asking is whether we are delivering more

value.’



Steve Platt, the sales director of Carlton UK Sales, agrees that it can

be done, as long as the planning people have a suitable level of contact

with the client and a good relationship with the buyer. ‘I can’t see any

reason why the agency with the planning can’t keep control of the total

media plan,’ he asserts. ‘In fact, there may be advantages - you now

have two sets of people who can come up with ideas and spot

opportunities.’



But Platt disagrees with the proposition that there will be no future

role for smaller buying operations. ‘Size does have its advantages,’ he

admits, ‘but I’ve always maintained that good buying was all about the

proposition that you put forward. An agency with smaller billings can

always get as good an end result as the big guns by being clever.’



George Michaelides, the managing partner of Michaelides and Bednash,

specialises in strategic media planning, working alongside Howell Henry

Chaldecott Lury’s creative work and the Media Business’s media buying.

Michaelides says it works well: ‘This will increasingly happen as people

specialise on the buying side and buying becomes even more commoditised.

Strategy is where the real control lies,’ he states.



And he doesn’t believe that splitting the process causes any problems.

‘All our clients are audited by independent auditors and that ensures

that the buying company delivers what we asked for and that it is bought

competitively,’ he says. ‘And it is not as if we are totally removed

from the marketplace - we have our own nous too and are aware of

opportunities in the market.



‘These days, some independents say they need the planning to be able to

handle the buying, but few people ask them if they are any good at it.

Most independents were originally set up as buying shops and they don’t

really have a track record in planning, no matter what they try to

maintain now.’



Nick Manning, the managing partner of Manning Gottlieb Media, is less

sure. MGM benefits from Carat Group ‘umbrella’ negotiations on discounts

but retains full in-house control of day-to-day planning and buying.

‘Jerry Fielder is one of the shrewdest men in the business, so his

decision commands respect. However, this path is fraught with

difficulties,’ Manning maintains.



‘It’s untrue to say that buying has become a commodity business. To an

extent, the negotiation process has become commodity-orientated because

deals are more likely to be done on an agency rather than a client

basis. But this is precisely why buying - as opposed to negotiation -

cannot be allowed to go the same way.’



Manning points out that, these days, a deal with a sales point is only a

framework guarantee of price and airtime quality. Within that framework,

buyers still have to use their skills to deliver the right programming

needed by individual brands.



‘The further away from the brand that buyers sit, the less likely they

are to understand the brand’s needs,’ he adds. ‘A good buyer who is

immersed in the brand and accountable to the client can make the

difference between success and failure, almost irrespective of the deal.

These days, you have to be part of a bigger negotiation game, but

ultimate control over the buying process is just as important.’



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