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.
