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