There was a time when any media agency worth its commission would
build its credentials on formidable media buying. Saving clients' money
by negotiating tougher deals with media owners was a key plank of your
average media agency pitch.
Today, though, media buying and implementational planning are often one
of the last things media agencies shout about. From strategic planning
to econometric modelling or database management, media agencies, it
seems, are no longer happy being simply media agencies. Could this be
the beginning of the end for the media agency as we know it?
Most of the large media agencies can no longer rely on their core
disciplines of media buying and planning. As media buying becomes more
commoditised and more globalised, there is less to choose between
agencies on either price or service. The need for a tangible point of
difference is more vital than ever and media specialists are adding new
services to provide this difference.
Consider, too, that media planning and buying - business traditionally
won or lost on the cut-throat commissions agencies are prepared to
accept - is not exactly a money spinner. Agencies have long needed to
find new routes to tap client budgets.
But also agencies have sensed that clients' needs have changed. They
want more research and quantifiable proof that their media activity and
advertising works. Yet they are also open to ideas as new media channels
open up and the role of traditional advertising in the media mix at once
becomes more complex and diminished. All of which adds up to a clear
opportunity for media agencies to grow from media specialists into
broader communications specialists. And it's an opportunity many are
already attempting to embrace.
Speaking to leading clients and agency chiefs, three forces emerge as
driving this diversification. The first is the launch of big joint
buying, or at least TV negotiation points. Interpublic Group's Magna
Global, which pools TV negotiations for Universal McCann and Initiative
Media, is a prime example. As Mick Perry, who will head the operation in
the UK, points out: "Both Universal and Initiative will continue to
exist in the way that they do now, with separate offices and as
competing agencies, but they will no longer compete on price."
By stripping out what was once a key function of any media agency into
these new buying silos, the real question is what's left behind? Magna
will use its muscle to sort out the buying, leaving Initiative and
Universal free to evolve other services. So Initiative has already laid
roots in interactive (Fastbridge) and has its own research division.
A second trend comes from networks such as PHD Group that are trying to
build a more upstream business, getting closer to the heart of clients'
branding and marketing issues. The idea is to continue to offer some
level of buying and traditional media planning while refocusing to
locate brand planning at the heart of its offer.
Similar thinking, if not the same fundamental approach, lies behind
Tempus' creation of Tempus Partners, which allies CIA's traditional
media strength with the brand consultancy of Added Value and the digital
focus of Outrider.
Then there are agencies such as Naked Communications and Unity, which
seem to believe that the traditional media agency model is fundamentally
flawed. They would claim to go beyond a PHD or Tempus Partners. The
argument is that even the more enlightened media agencies are still tied
to a buying model and, therefore, are unable to offer impartial brand or
creative strategy insights.
Many clients, it seems, remain to be convinced, though. And that's the
key. It's all very well for media agencies to recreate themselves as
sophisticated communications companies with a raft of high-end services.
But what do the clients themselves want from the media agency of the
Many clients are pretty savvy about why agencies want to grow beyond
their traditional base. Keith Moor, the head of marketing communications
at Abbey National, says: "There are fewer media independents. Most are
now part of groups and have a requirement to get more profit out of
To do this they need deeper relationships. So I do think this trend is
at least partly driven by corporate pressure." James Kydd, the brand
director of Virgin Mobile, urges caution, though. It's all very well
trying to maximise revenue from exisiting clients, but he's wary of the
hard sell. "If agencies expand into loads of new services and then push
them all the time, it is desperately unhelpful because clients then get
suspicious. We should be putting our business with the best people and
not just doing it because it is the latest thing from WPP, for
However, Moor is receptive if a new service from his agency will help
him. "If they help me understand how well my advertising works, then I
will invest in that service. That is something I would definitely pay
for," he says.
So accountability and effectiveness is a key area of interest to Moor.
Mike Moran, the commercial director at Toyota, is similarly interested
in services that can bring greater effectiveness in judging the impact
of Toyota's advertising. However, Toyota's approach is to stick
rigorously with specialists in all fields. Moran explains: "Media
agencies moving into areas where we are already using someone else who
is more specialist is probably not welcome. I think that sticking to the
knitting is good."
Toyota has used Zenith Interactive ("which we found good and filled a
modest need") and Moran sees a time when media agencies' understanding
of data may be valuable. However, he concludes: "Through my involvement
with ISBA, I talk to other clients about this and the majority don't
seem to think that integration of services has worked. The world is more
complex than when you had full-service agencies around."
Amanda MacKenzie, BT's director of marketing services, is interested in
the factors that drive agencies to launch specific services. "It is
interesting to look at why media agencies have chosen what to launch,"
MacKenzie explains. "Some head in to strategy, some in to interactive
and some go in to direct marketing. However, it would be good to see
more people looking at what I call real media futures - at where are the
There are fewer people inventing and incubating than there could be. It
would be good to see more ideas related to how we can make media more
relevant in the emerging digital age, for example." Perhaps MacKenzie
has a point, but many media agencies would argue that they understand
how consumers interact with brands both through traditional and emerging
But then that could be part of the problem. Won't the traditional model
of a media agency, no matter how many new divisions are layered on top,
still have a vested interest in traditional media routes? Naked's view
is that agencies are bolting on services because there is money to be
made, but clients want media-neutral advice. And being tied to a
planning and buying model makes it difficult to provide this.
Unsurprisingly, most of the large media agencies don't buy this
Take Tempus Partners' relationship with Coca-Cola, for instance. Coke is
still spending considerable amounts on traditional advertising but it is
confident that it can get good brand and media channel advice from
Tempus Partners. The thinking is that Tempus Partners has genuine
expertise in each area and yet is divorced from the implementational
media process because it is not Coke's buying agency.
However, some clients do buy in to the spirit of independence and
impartiality that agencies such Naked and Unity can offer. Peter
Buchanan, the director of marketing communications at COI
Communications, says: "I think a few of the new kids on the block, the
Nakeds and Unitys of this world, come with the right mindset because
they are led by people who have come from big traditional media planning
departments and have become frustrated with that. These agencies want
direct relations with clients where they are equal partners with the
creative agency. They find communications planning much wider and more
exciting than traditional agencies."
And that hunger for "excitement" is hardly surprising. All too often
media ends up being more of a commodity job than a stimulating
intellectual challenge - exacerbated on the buying side by the move
towards electronic trading and the launch of the buying silos.
Therefore, the development of new businesses is encouraged by those
youngsters joining the media industry who are looking for a more
fulfiling role at their media agency.
And media agencies have themselves recognised the benefits of bringing
in new blood from creative, interactive, direct response and branding
backgrounds and those people are also spearheading the move into new
However, despite all the posturing and thought that goes into launching
new services, some agency bosses admit that the real reason is very
As one agency chief puts it: "It makes your agency slightly more
difficult to fire" (this in light of media buying being reduced to a
"hygiene" service that all agencies are expected to provide).
In general, it seems clients need some convincing about the merits of
media agencies diversifying. Moor concludes: "I'm a hung jury. There are
many more intelligent people in media agencies than there were ten years
ago. Our media agency (Carat) drives our communications strategy more
than it has in the past. It understands our customer segmentation and
makes it relevant to planning. But it is important for agencies to
remember what they are good at. As well as diversifying they need to
remind clients of their core competencies."
And Moor is clear that clients will not want every service now being
offered by media agencies. He says: "Unless it makes advertising more
effective, gives me better value, I'm not interested."
On the other hand, Buchanan argues that in some cases media agencies are
not ambitious enough in the way that they are thinking about the
He says: "Agencies tend to be conservative. A number of things have not
developed in recent years in the way in which they should - for
instance, the way in which media planners work with account planners
hasn't really altered. If agencies do decide to broaden their offer they
have quite a lot to do that is closer to home first."
As for media agency developments going full circle to recreate the old
full-service offer - well, most clients and media agencies can't see it
happening. Most emphasise that the way forward is to work more closely
with creative agencies rather than in competition with them, although
there are clearly sensitivities on how this trend will develop. Creative
agencies may be right to be nervous of losing business to media agencies
- recent examples include Michaelides & Bednash winning the
Workthing.com creative brief and Naked picking up Tate Museum work. But,
despite their thirst for exploring new horizons, most media agencies are
showing no inclination to launch full-scale creative departments.
Whatever happens, it is clear that the battleground of competition for
media agencies has shifted way beyond simply process and
And while the old-style media agency may be breathing its last, it is
only to make way for a more thoughtful and sophisticated offering that,
while still perhaps founded on media planning and buying, will mature to
offer clients a whole lot more.