Clients don’t know enough about media. And with media becoming more fragmented, they understand it even less. As a consequence they are relying more heavily on their media advisors.
Unfortunately, these same clients are under increasing pressure to find cost efficiencies, which has led to a reduction in agency remuneration. This combination of financial pressure and the growing complexity of the market is stretching agencies to the limit.
Ultimately clients are not getting a good service. That is the fear of John Hooper, director-general of the Incorporated Society of British Advertisers (ISBA), who first aired his concerns about the low level of media literacy among clients at the TV Barcelona conference.
“There is a lack of knowledge and indeed one might say a lack of interest,” says Hooper. “Many companies are downsizing. They don’t have the resources for an in-house specialist. Marketers must rely increasingly on their advisors – their advertising agencies, their media agencies and auditors.
“Most of the good marketing directors have got a good media specialist behind them. My concern is for those second-stage companies which are totally reliant for advice on their agencies.”
But as John Billett, chief executive of the Billett Consultancy, says: “If you don’t ask you don’t get. If you are not taking an active interest there is a real possibility that certain agencies and media shops just take their foot off the accelerator.”
There is also a possibility that an ill-informed client will have to use the auditors and consultants as a hand-holding service, or even as a crutch.
Jargon is blamed for adding to the confusion. Nick Shepherd, general manager, coffee and foods for Kraft Jacobs Suchard, says: “Media has always been a bit of a black box. Historically agencies have used this to their best advantage. Media is right up there with the IT community in terms of jargon.”
Hooper asks: “Is all this jargon put in to make the agency look smart and to justify its fee?”
Andrew Marsden, marketing director at Britvic, blames the low level of media debate in client companies on the decline of the traditional role of the media manager, which only the very big companies such as the brewers or Procter & Gamble and Unilever can afford.
These “premier league” advertisers drive the policy decisions and negotiate face-to-face with the contractors. Yet away from the top end of the advertiser league, it is a different situation.
“Many marketers understand media strategy, but the ‘hairy-arsed end’, the nitty-gritty of buying, is less well understood. Many advertisers are surprisingly relaxed about this whole issue,” says Marsden.
The media industry would seem to have done little to demystify what it does. But then, perhaps not enough clients have asked for explanations.
Chris Locke, joint managing director of MediaVest, says: “A lot of companies have this blasé attitude about media agencies. They think you can all buy at this price, that you can all buy this plan. When you present to them, their eyes glaze over.”
Perhaps that is what the hard-pressed client is paying for – someone to advise them on an increasingly fast-moving industry who does this grading routine ten hours a day, five days a week.
Locke argues that in some ways the relationship between agency and client has changed for the better because of changing agency structures: “Media companies used to be suppliers. Now they are much more an extension of the client’s business. It’s more of a business relationship.
“When you are a department of an agency, account men keep you away from the client. When you are a media agency, all you do is talk to the client.”
If the agency is expected to soak up the extra workload for the same amount of money, these relationships deteriorate. Graham Duff, chief executive of Zenith Media, says: “The trend in remuneration is going down, yet the complexity and need for expertise is increasing. We have got to persuade the client to let us handle more of the budget, above and below the line.”
Increasingly, agencies are deliberately splitting up different functions and services into different units, so they can charge accordingly, rather than doing more and more for the same commission.
Mike Anderson, marketing director of New PHD, says: “Clients will get more interested when they see they don’t get value from their agency by screwing them in terms of commission.”
Paul Donovan, commercial director of One-2-One, who works with Motive and Bartle Bogle Hegarty, says: “Why does the general marketer need to have an understanding of buying? You don’t want the client and agency double-guessing each other, they should be working as a team.”
This is clearly a debate without hard and fast answers – and obviously no client would ever publicly admit to ignorance. But there are some points that everyone agrees on. Shepherd says: “Not even the best clients can be as close to what’s happening in the media industry as the agency. You have to have confidence and trust in your media partner but you can always have more trust if you understand more.”
Hooper admits that his concerns are based on conversations with ISBA members rather than concrete research. But those conversations are becoming more regular. Inevitably, the specifics will depend on the relationship between agency and client. But Hooper is highlighting an issue that will make some clients, and agencies, anxious.