Do advertisers care more about media value than price? The rhetoric
certainly suggests so. Everyone’s talking about the value of good
planning and strategic thinking. But many agencies say the reality has
been very different in 1995, especially in recent pitches. Has no-one
learned anything over the past few years?
Cut-price media has raised its ugly head again. After months of public
posturing about investment in media planning and creativity, all it
takes is a big media pitch or two for price to reassert itself as the
major consideration for a client when choosing an agency.
In one recent media pitch, involving a major client advised by a top
media auditing company, 70 per cent of the markers put down by the
client concerned cost. The business, according to insiders, eventually
went to the agency which not only reckoned it could deliver on price,
but would also do it for a bargain-basement fee.
Speculation and hearsay? Perhaps. But media specialists have been
grumbling about this sort of thing all year. Maybe it’s time to take
them seriously.
Theoretically, good buying can be done by just about anyone. The art is
in the planning - and media companies have been falling over themselves
to prove they can offer this at its very best.
So who’s kidding whom? Is the reality really failing to match the good
intentions? And if so, why?
Edward Lloyd Barnes, a director of IDK Media, admits he is increasingly
unimpressed by the rhetoric: ‘People keep telling me that a client’s key
priority is the intelligent use of media, and not the bottom-line price.
Unfortunately, in the pitch scenario, clients are all too often seduced
by a cheaper cost per thousand and a lower agency fee.
‘A client that pushes for these two goals will, ultimately, end up with
the media it deserves. We all know that the cheapest solution is not
always the best. And, because of increasing fragmentation in the media
market, agencies need to spend more on research and quality staff. So
clients may actually need to pay agencies more - not less - to get the
best media results.’
Ambrose McGinn, the marketing director of Abbey National, believes cost
cannot be examined in isolation to value for money. ‘It may be true that
some media companies use their undoubted buying skills to imply that
that makes them the best but, in my experience, value always comes first
for advertisers,’ he says. ‘Most pitches should be conducted within
reasonable cost parameters - and price is obviously a factor in the
value equation - but absolute cost is a secondary consideration to
quality.
‘The creative use of media will overcome cost considerations. Anyone can
go for cheap media these days, but quality of thinking will deliver a
lot more value - and now we are almost able to quantify exactly how much
more. From my point of view, I can’t see any basis for agency anxiety.
But that may just be because we are more enlightened than most when it
comes to media.’
Phil Georgiadis, the chief executive of Initiative Media, agrees that
advertisers are more sophisticated than they are given credit for. ‘They
have recognised the importance of looking for value beyond the numbers
and, consequently, more media pitches are about upstream communications
issues,’ he states. ‘Most media companies are also placing more emphasis
on research, strategy and resource.
‘Logically, the price of the service should rise. But the market is
still immature and some media companies are fighting to preserve, or
increase, market share by making price concessions. You can’t blame
advertisers for taking advantage, particularly if they have already been
given guarantees on quality.’
Georgiadis questions the long-term ability of agencies to meet these
quality guarantees, given the low margins they will be operating on.
However, Mike Tunnicliffe, the managing director of CIA Medianetwork,
says the picture is not as bleak as it might appear. ‘It’s true that
there has been at least one pitch lately where cost was the only issue,’
he reveals. ‘But you always get one-offs like that. And all clients are
different - it’s horses for courses. One pitch doesn’t necessarily make
a trend.
‘But, having said that, our view is that the cost side of things is a
given - it’s the basic hygiene in the marketplace. Clients tend to
select the operators that can deliver on price - there isn’t a great
deal of difference between the top ten buyers and what they can deliver
where price is concerned - and then at the pitch they look for added-
value solutions and better planning.
‘It’s only the companies which can’t deliver on price that tend to
whinge. And then they use the fact that they offer planning as an excuse
for trying to bump the price up even further. We believe in being able
to deliver both sides of the equation,’ Tunnicliffe says.
Michael Cluff, the managing director of international development at
Media Audits, admits agencies sometimes feel aggrieved, but that perhaps
it’s because they don’t always see the full picture. ‘Clients put down
quality bench-marks and only the media operations that are able to
achieve these are asked to talk about price. And then you can put
schemes in place to incentivise the buying side of things.
‘Some buyers may feel frustrated because they are not party to the
debate about the quality aspects of things. The client may have its own
planning resource or it may well be handled by the creative agencies -
that’s especially the case when we’re talking about centralisation
pitches. So it is often true that sometimes there is a concentration on
buying efficiency when it comes to the pitch stage.’
Cluff believes we’re merely seeing another aspect of the debate about
where the strategic planning function should sit. Media specialists tend
to get frustrated when their planning expertise isn’t used.
‘Once clients have decided on the structure they want to adopt, it’s not
an issue they want to debate,’ Cluff points out. ‘But whatever structure
they choose, one thing is certain - the clients we deal with are not
about to sacrifice quality for the sake of price.’
