OPINION: Launching a media shop is all hard work and turnover. It’s a jungle out there, says Sarah du Heaume. Without a record in buying, you’re up against the big league while media owners want to see the colour of your money

Christine Walker is about to found a media shop. It’s a bold move and, as she acknowledged in her recent Campaign interview, it will be hard.

Christine Walker is about to found a media shop. It’s a bold move

and, as she acknowledged in her recent Campaign interview, it will be

hard.



Media buying is not for the faint-hearted. Turnover is high, margins

small and cashflow, therefore, absolutely critical.



When you lack an established trading history you can find yourself

spending more time on the phone negotiating payment terms and so forth

than actually negotiating rates for clients. To set up in this sector

you need balls, you need money - and preferably both.



You also need to work damn hard. What was already a labour-intensive

industry is becoming more so. As available data becomes richer and more

complex, so clients get more demanding.



Maybe they get better planning than in the old days and maybe they are

prepared to pay for it. But still there are only so many hours in the

day and other things need taking care of - recruiting, setting up

systems and so on.



What can seem like a golden opportunity to get everything right can turn

into a veritable nightmare. The old rule applies - if anything can go

wrong it will. And probably all at once.



Another problem is the NPA/PPA conundrum. It really is Catch 22. To book

media you need to be a recognised agency. To be a recognised agency you

need to book media.



This is a tough one. I haven’t heard of anyone who started up on their

own with NPA or PPA recognition. Indeed, for both of these you need to

have been trading for a year (and have the accounts to prove it) before

you can even think about applying.



Media owners, understandably, have a real ’show me the money’ attitude

to new media agencies. So, as a start-up, how can you get around

this?



Booking through another agency is one option, but this kind of menage a

trois is not ideal. Money talks. Upfront payment is another

possibility.



Friends on the media owner side are often prepared to help. In practice,

a mixture of these approaches gets over most hurdles.



When moving from a larger agency to a smaller one (which I have done

twice) you find out who your real friends are. There are those who turn

their back on you once you no longer have large accounts; there are

those who help you out even when you have no business.



I set up Just Media in April 1995 with just pounds 500 of capital, an

Access card, a good reputation in the technology field and the goodwill

of clients and media owners. Just Media today has a turnover of pounds

10 million, 13 employees, an office in San Francisco and plans for

further expansion. Instrumental in this success were relentless

attention to cashflow, making technology work for the company and solid

founder clients.



I am sure an industry figure such as Walker will have no difficulty in

attracting clients, especially since she is to be joined by Phil

Georgiadis.



People buy people. The problem is, as the company grows, you can’t give

a personal service to all clients. Starting a company is not the hardest

part. Growing one is.



Which begs the question; do you need to be big to survive? There has

been a tendency, led from this side of the Atlantic, for media owners to

consolidate, becoming bigger and bigger. One has the impression that a

media shop needs to be billing tens if not hundreds of millions of

pounds just to stay in the race.



Muscle is certainly an issue. But it needn’t be a case of the bigger the

better. Walker talked about not wanting to be a corner shop. I don’t

think that is even an option. There’s simply no room. A delicatessen in

the right area maybe.



In the end there may be only three choices: get big, get niche or get

out.



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