Arif Durrani, head of media at Campaign, editor of Media Week
Arif Durrani, head of media at Campaign, editor of Media Week
A view from Arif Durrani

Trust is first casualty of the Channel 5/Omnicom saga

There's something rotten in the symbiotic relationships of media agencies, media owners and clients - and it demands our attention.

Omnicom’s ongoing decision to withhold all its media spend from Channel 5 has drawn attention to one of the biggest problems dogging media trading today: trust.

Omnicom agencies have so far redirected at least £30 million worth of adspend away from the broadcaster during the past six months compared with the same period a year earlier. Of course, there’s no law that says C5 must be included on media schedules. Indeed, the broadcaster is as niche as the former terrestrial channels get. But its case is bolstered by market trends.

During the first two months of the year, the cost of advertising on ITV and Channel 4 has increased while that of C5 has fallen, representing great value for money. Yet the standoff continues. It has led the broadcaster to resort to desperate measures.

Last week, C5 fired off an emotive letter to Omnicom’s biggest clients, asking them to seek "independent advice" about their media activity. The wording cuts deep. Surely independent advice is the most essential function underpinning any agency today? Clients have to trust that their agency is acting in their best interests. And yet the broadcaster appears to have broad support for its actions.

Tom Denford at ID Comms believes the issue starts with the lack of transparency in the way agencies are now trading and the gains made from such aggregate trading. And, if there are issues of trust around traditional TV buying, they turn to paranoid, frenzied proportions when it comes to programmatic trading.

'Agencies' margins have been cut so much that the only way to operate is to leverage group trading deals'

Interestingly, Denford challenges C5’s idea that traditional auditors are best-placed to offer advice. Their obsession with lowering the price paid for media over the years has made them complicit in the creation of the very share deals that now exist, he argues. Behind closed doors, many agency leaders support this view.

One agency chief told me this week that at least 80 per cent of his time with clients boils down to trust issues. Agencies’ own margins have been cut so much by procurement teams in recent austere times that the only way they can continue to operate and make the necessary investments is to leverage such group trading deals. Typical margins of 1-3 per cent on media deals hardly suggests the rarefied air of a key trusted advisor.

It all serves to undermine the value of great media expertise, which still drives the largest single part of most advertiser’s investment in communications. The solution has to start with clients taking a proactive interest in their media buying.