Reuters has plans to drag the press buying market into the 20th century
- it is trying to convince the industry to adopt an electronic booking
system that will make the market more efficient and trading more
transparent. Are buyers likely to welcome the new system? Or are they
right to be suspicious? Alasdair Reid reports
There really isn’t that much difference between planning a TV campaign
and planning a press campaign. There’s a lot of research available in
both media, the planning process will involve just as much science as
art and you are not going to get very far in either medium without a
great deal of computing back-up.
But when it comes to buying, booking and scheduling, the two media are
like chalk and cheese. Time buying departments tend to be like City
dealing rooms, while press buyers are still using a system that’s hardly
changed since the days when Fleet Street titles were sold by slightly
raffish ex-Guards officers.
The buyer makes an agreement with the sales person on the phone, the
buyer then raises an order from the finance department, the order is
posted to the media owners, the media owner then sends an invoice, which
the buyer has to check when it arrives. Computers are involved - a low-
level application of Donovan Data Systems, the media management system
that is the workhorse of the airtime market - but the whole process
tends to be very time-consuming and labour-intensive, especially when a
schedule has to be tweaked here and there.
That may be about to change - Reuters is currently trying to sell a
fully-automated electronic booking system to the industry (Campaign,
last week). The benefits are fairly obvious. According to Reuters, the
system should be seen first and foremost as a communications platform.
It allows buyer and seller to stay in touch more effectively. But it
will also streamline much of the booking process and remove the need for
so much paperwork. The raising and paying of invoices, for instance,
could be done automatically. It will also confirm more accurately
whether or not buyers get exactly what they have paid for. If a buyer
wants to make small changes to a schedule, a request can be made on-
screen - and the information is there for both buyer and seller to see.
It removes any excuse for mistakes in the insertion of ads.
So surely this is something that will be welcomed unreservedly, right
across the industry? Well, not exactly. Some agencies are said to be
concerned that it will interfere with a nice little earner that they’ve
worked for years. Buying points have traditionally ensured that client
money comes into the agency well before it has to go out to the media
owner. While it’s in the buyer’s control, it can be earning interest.
During lean times, when commission levels are low, this has often been
the main source of profit for buyers.
The Reuters system will offer more transparency in the press market and
give buyers less opportunity to work the money-management tricks. So,
won’t buyers do everything they can to kill it off?
Colin Gottlieb, the managing partner of Manning Gottlieb Media, doesn’t
think so. ‘Of course, it’s true that making money from money management
is a part of the media-buying business,’ he admits. ‘But it really isn’t
as important as it was. Interest rates are low and buying points have
restructured so that they make an operating profit these days.
‘This new system is about efficiency and the management of media plans.
The current system is archaic - newspapers still supply great swathes of
paper with every insertion listed. There are a lot of man hours tied up
in that and we would clearly be interested in making efficiencies there.
The only downside I can see is that it might take a lot of resources to
put it into practice.’
Some buying points - large ones at that - refused to make any comment on
the Reuters system and it is clear that they are being cautious, if not
exactly openly hostile. But will it gain the approval of the Institute
of Practitioners in Advertising?
John Raad, the deputy director general of the IPA, has one or two
concerns about the new proposals. ‘Individual agencies will, of course,
make their own decisions,’ he states. ‘But our main concern is about how
much it will cost. A few forward-thinking media owners may adopt this
new system but agencies will still have to deal with the massive rump of
media owners that have not. So the agency will have made a huge
investment - and for what? The benefit will only come if the system is
‘As far as we are concerned, transparency isn’t really an issue. Of
course, the IPA embraces transparency, but clients will always have
individual ways of dealing with agencies when it comes to questions of
cash flow and I don’t think it is our job to try to legislate on that
Cost isn’t the only problem envisaged by agencies.
Mike Tunnicliffe, the managing director of CIA Medianetwork, says that
the introduction of competing systems could cause problems. ‘My
immediate reaction is that I wouldn’t be all that keen to see different
systems being used on different media. At the moment, people have
Donovan Data Systems and it manages a wide range of tasks across all
media,’ he points out. ‘Donovan basically runs the whole operation. I
don’t think anybody will be very keen to see three or four different
data systems being used in media operations.’
Mandy Pooler, the managing director of the Network, believes that the
big issue may well be about staffing. ‘Media owners and buyers alike
realise that the way we trade currently is time-consuming and
inefficient. This new system could be the start of a change like the Big
Bang in the City. It could remove some of the humdrum and repetitive
tasks from the buying process. We will be able to offer people far more
interesting careers, but the bad news is that we may not need so many of
them in the future.’
Pooler believes that transparency will be an issue for some buyers. She
implies that there is still a lot of routine abuse of the current system
- and clients are none too happy about it. ‘I’m absolutely for the new
system,’ she states. ‘I hope it is brought in soon and we would consider
helping to test it. I can’t understand why agencies would be against it,
unless they have something to hide.’