Time for media's squeezed middle to take action
A view from Omar Oakes

Time for media's squeezed middle to take action

Smaller advertisers, that are most at risk from being disadvantaged by the agency-led buying system, should wise up.

Ex-Labour leader Ed Miliband talked a lot about “the squeezed middle” as part of his 2015 election campaign. Perhaps, now that he is shadow business secretary, Miliband could reflect on how a similar squeeze is being inflicted on many advertisers by our media industry.

Contentious issues, such as agencies reselling inventory and the need for TV trading practices to be reformed, are rising back up the agenda.

The pandemic, and the attendant digital acceleration, has disrupted our industry and forced difficult questions to be revisited. I say "revisited", because the problems are not new. 

The bigger network agencies, due to their buying power, have been able to negotiate discounts with media owners (TV broadcasters, in particular) and pass these savings on to clients. But, in practice, the biggest clients tend to benefit more from these discounts.

Nick Manning, who has seen both sides, as a founder of Manning Gottlieb Media and a former chief strategy officer at Ebiquity, says: “Mid-size advertisers, especially local ones, may be vulnerable to being underserved in the bigger media agencies due to pressure from the larger clients, often as a result of international agreements.”

Hence the squeeze: some of the UK’s medium-sized advertisers, with annual media spend in the single-digit millions, are effectively paying a premium for not being big enough to throw their weight around, but also being too big to do everything themselves on a self-serve basis on Google and Facebook. 

Phillippe Dominois, co-founder of global media consultancy, Abintus Consulting, encourages his clients to hire a “media manager”, who can ensure media management best practices are being applied, helping marketers measure the performance of their media campaigns.

“Agencies can do great work”, but there are also instances where they give “below-par service and deliverables” – “if they feel the client is not media savvy”, he says. “We see the basics of the media planning and buying process, such as post-campaign reporting, being far from best practice or even forgotten.”

ISBA and the IPA have moved a long way since 2016, when the two sides were at loggerheads over the Media Services Framework – a tough contract template drawn up by ISBA for members to use with their media agencies. Since then, all the big agency groups have made changes to their trading practices, in some cases, significant ones, such as stopping cash rebates.

Yet progress on media transparency is slow. The digital market is evolving rapidly and regulators, such as the Competition & Markets Authority, are watching.

I asked ISBA how many advertisers, including medium-sized ones, have made use of its Media Services Framework (which was updated in 2018). It couldn’t give a number but “Version 3” is likely to launch later this year, which will hopefully help. Manning says advertisers should also use the ISBA contract template “to its fullest extent”, as well as getting specialist help from legal experts. 

The advertisers most at risk from being disadvantaged by this system should wise up and demand more transparency. Because, if anything, the continued digitisation of media could create further opportunities for more opacity as TV, outdoor, and radio are traded on programmatic platforms.

Medium-sized companies spending more on advertising as they compete to build their brands is a sign of a healthy competition. They should not face disincentives to invest.

When the middle is squeezed, it’s a warning sign.

Omar Oakes is media and technology editor at Campaign