When I launched my media and marketing consultancy Aperto One in autumn 2016, I wrote an article for Campaign entitled "Media agencies must face up to trust issue".
I asked if the agency commercial model was broken and what needed to happen to move it on.
I had spent 15 years in agencies and knew that there was an opportunity – and an imperative – for advertisers to create positive change, by introducing smarter ways of working and to correct legacy behaviours.
My view is that all parties need to take responsibility: the advertiser, the agencies, the consultants and indeed the media owners.
Have we made progress?
Much has been discussed, a lot has been debated and in pockets we are seeing change, but we still have so much to do.
Aperto One’s first year of business has been surprising but fascinating. We have been fortunate to have worked with truly progressive marketers and we quickly learned that to enable genuine change, we had to do doing things quite differently and that required significant energy, persuasion and selling to everyone.
Building trust has been essential. Our primary advantage was described by one client simply as "we had not let anyone down yet".
By this they meant that we had not described the new type of partnership but then delivered the old. Too many are guilty of talking about next-generation solutions but then quickly regressing to legacy ways, because it is easier.
Still a blockage
There is still a blockage to change at scale. Agency holding groups are not solely responsible for holding things up. Most are now able to radically change course and remove many of the well-documented behaviours. Some already have.
However, this change can only take place if, in return, advertisers who want to see progress are committed to taking more responsibility, seeking knowledge and really understanding what they are trying to build.
Better frameworks to value media and the work partners do must be developed.
Media is not a commodity and agencies as service providers are not just another supplier.
Put simply, marketers must spend more time understanding the role of media in their business and secondly look again at the commercial model it has in place with its agency of choice.
Here are some of the blockages to progress that advertisers and their partners need to address:
Blockage 1: Advertiser – do you have the commercial model wrong?
What does the wrong media agency commercial model look like?
An advertiser should revaluate their agency commercial model if:
· The agency remuneration model is based primarily on commission – a dynamic fee model is the only one that works.
· The performance-related fee (PRF) element is built largely on a media benchmarking result – if you ask you agency to overly chase price you will fail
· There is no shared accountability built into the relationship – an agency’s primary task should be to help growth. This should therefore be a core measure.
· The contract has not been refreshed in more than 12 months. It is now out of date. Media agency contracts are unique in nature. Get expert advice and constantly refresh. A good contract is the basis of a successful media agency partnership.
Just for clarity, I am not suggesting you move to a pitch, but simply engage with your partner and build for the future. In most circumstances this will require very structured dialogue.
Blockage 2: Trusted advisers – beware the consultants
Advertisers should seek advice where needed. However, another blockage sits with the "trusted advisers". There are too many consultants providing poor advice.
This tends to result from either a lack of knowledge or the fact they are riddled with have their own conflicts of interest.
Advertisers must ensure they take the right advice and not assume that just by being an independent consultancy with great marketing that these advisers are qualified to provide the insight required.
Getting this right is quite complex and a broad range of skill sets is essential. (The biggest gaps are often commercial acumen, a detailed understanding of how media is traded and indeed how media agencies really work.)
It has been a huge frustration this last year to learn that despite great rhetoric and marketing, many consultancies lack the knowledge or desire to produce the guidance they are often tasked with delivering and this is really holding back the industry.
They deserve criticism and review as much as any other component part of the system. They remain protected by the fact that the only people able to challenge their work are the media agencies who must work with them to win business
Blockage 3: Measure what is right, not just what is easy and possible
Many of today’s challenges are a direct result of lazy measurement. Many advertisers have sophisticated ways of measuring the performance of marketing and media, but struggle to value the contribution of their partners as robustly.
Why does this happen? There are lots of reasons but an obsession with pricing and a desire for savings is the biggest issue.
Some advertisers are so desperate to create a media savings number that false savings are manufactured as a result. This is clearly not going to help anyone hit marketing or business objectives.
We must spend more time understanding when a saving really is a saving.
To be clear, if you give any weight to a media pricing grid, you have it wrong.
This method of benchmarking is incredibly flawed and will not deliver you real and sustained savings.
This legacy methodology neither reflects the true value of media or a media agency. It should never be taken as anything close to science, nor should it ever be called auditing.
I will go further and point to benchmarking as a key factor in contributing to the slow destruction of premium media.
Of course, good media-buying is essential, but understanding media value is more complex than trying to find two like-for-like numbers to compare.
Trust me, no significant agency or agency group buys media any "cheaper" than any other. Some, however, may well be better at creating a number you wish to see. Scale does not equal discount in today’s UK media landscape.
Media pricing discount delivery measured in this way is 60% real and 40% a manipulation of numbers.
This manipulation happens at every level of the valuation chain – advertiser, agency, consultancy and media owner.
Blockage 4: The pitch process needs regulation
It has become far clearer that pitches are too inconsistent and unfair on all parties.
I am not suggesting a uniform approach but certainly that certain bad practices are eliminated, and core principles put in place.
I would like to see :
· Structured and controlled Requests For Information (RFI) processes
· Purposeful and focused Requests For Proposals (RFPs), limiting the number of strategic questions
· The removal of pricing grids in their current form as a mechanism for decision making. Test value not price.
Advertisers should take time to revalue the contribution a media agency and other related partners make.
If agency partners are engaged in a progressive manner, they will support an advertiser’s business and aid growth.
Scott Moorhead is founder and chief executive of Aperto One