At a simplified level there are three parties involved in the media buying process:
The client > The agency > The media owner
The client benefits from the agencies expertise, creativity, insight and buying power. The agency benefit from billing the client. The media owner benefits from billing the agency. Simples! This works well when agencies are investing their expertise thoroughly and translating it to an unbiased media plan. But that is not what happens in today’s world.
It goes more like this – Client briefs agency > Agency buys media from preferred partners > Media owner receives booking.
Agencies now have large group deals with media owners that guarantee them significant savings for significant volumes of advertising. This means the agencies are beholden to meeting revenue targets with specific media owners. This in turn stifles creativity and limits media choice.
So what does this mean for the client? Less creativity > Potential for poor media choice > Bad campaign = Less sales = Smaller marketing budget next year.
So what does this mean for the media owner? They are now a commodity > They get less money from advertising = Less product investment = Lower audience = Less advertising.
So what does this mean for the agency? Happy days until it is disrupted and this system is ripe for disruption!
What are the solutions? There are many but here are two:
- Media owners move 90% of their sales teams to be directed at clients. This would enable them to sell creative ideas direct to the client and that would apply pressure direct to the agency – making it more likely good ideas would prosper. The other 10% could simply monitor the group deals while the Directors negotiated them.
- Create a unified online buying platform for each media that allows full transparency. Clients could then go direct or at least see what was happening. If it is commoditised anyway then why not go the whole hog and place prices in full view of everyone. = No more shenanigans.
These solutions are poor I know but agency deals are bad for two thrids of the parties involved and they need to change.