Zenith Media faces a tough battle with newspaper publishers to deliver savings on the 70m Kingfisher media-buying account, which it has retained.
Agencies which failed to prise the business from Zenith estimate that it has promised to make savings of about 4m on Kingfisher’s media bill.
However, buyers insist Zenith can only deliver such savings by following a “casualty planning strategy” – dropping a newspaper group and spreading its money bet ween the remaining publishers.
“Kingfisher’s prices are already competitive for a retailer,” says one of the losing agencies. “Whichever agency won was going to have a battle on its hands to bring prices down.”
Of the five agencies which pitched for the business, CIA Media- network, Mediastar, MediaCom, TMD Carat and Zenith, four are believed to have suggested casualty planning. However, Kingfisher appointed Zenith because it did not want to try such a strategy and start a relationship with a new agency at the same time.
Zenith will have difficulty taking a tough stance with Mirror Group’s titles as it handles the group’s media buying and needs its Scottish newspapers. Buyers believe the Express Group’s titles are the most vulnerable, but excluding them would not free enough of the budget to tempt other titles into offering 4m discounts.
A further concern is impending ratecard increases from newspaper groups. The Mail on Sunday and The Sunday Times have raised rates in the past month and other titles are expected to follow suit.
Four of the five agencies are believed to have offered similar low remuneration terms. Zenith now has a direct contract with Kingfisher. The previous media contract was held through Bates Dorland.