There’s no such thing as a free media lunch

Hannah McCready reflects on the media agency pitching process after attending Mediatel’s Future of Brands

When I got my job at The Specialist Works, I did what any self-respecting twenty something would do. I bought an eyewatering amount of new ‘work’ clothes.

One of these purchases was a backpack (in the sale for less than a tenner, natch). It was perfect. To the untrained eye, it might have even been mistaken for the more expensive one I couldn’t justify buying.

Less than two months later, one of the straps broke.

Apart from walking lopsided into a meeting, it wasn’t the end of the world. After twenty minutes of hold music I was sent another one.

Then last week, the zip broke.

As I was leaving Mediatel’s Future of Brands conference, packing up my sturdier and pricier replacement, I couldn’t help but wonder why we compromise on long-term quality to save cash up front. Even when we know it’s more draining – both money and time – in the long run.

Is it this same behaviour that is, as Newsworks’ executive chair Tracy de Groose put it, killing brands?

I’m not seriously comparing agencies to bags – though if I were, I’d like to think that The Specialist Works would be a Mulberry Hampstead (understated and hard-working). I just don’t understand why some (not all) brands still believe that being cost effective is only about saving money, when it should be about spending it more wisely.
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The pitching, pricing and procurement panel talked at length about how healthy our focus on price is when pitching. Procurement consultant Tina Fegent said media and marketing are traditionally higher areas of spend, so they get ‘heightened interrogation’.

This, in itself, is no bad thing. Any agency worth its salt should be capable of responding to questioning. The problem I’ve seen first-hand is that it’s often focused solely on media metrics (and not business ones).

Agencies of all shapes and sizes can find ways to leverage cheaper rates. But great value does not always mean the cheapest rates or fees – a sentiment echoed on the panel by Martin Vinter, managing director, UK and International Media at Ebiquity PLC.

I’ll give you an example. A client came to us having previously focused on delivering year on year media cost savings. Sound familiar? Their previous agency had been pushed towards a cheap CPT with limited flexibility.

By working together and learning about their business goals we reframed the media objective and crafted a new strategy. The end result was that the client paid a higher cost per thousand, achieved a much lower cost per acquisition and reached its highest ROMI on record.

Now, if these CPTs were put in a price grid, we probably wouldn’t have won the business. This is the problem. These templates don’t demonstrate how business goals will be delivered. Price should be one part of an ongoing dialogue to ensure your agency is delivering the best media for your business.

Agencies that focus exclusively on being the cheapest will often go to great lengths to deliver a bottom-line rate that hides the true story of over-saturating, small and ineffective channels in order to make a spreadsheet look good. Surely, the answer is to work with every client to understand what business KPIs matter to them.

I agree with Tina that we should stop ‘wasting energy berating procurement’. It isn’t their fault. As Jan Gooding candidly put it, ‘you’re a mug if you don’t shop around’. We have built an industry on undercutting each other (in price grids, fees, retainers and commissions, to name a few).

Clients want the best media for business growth. Media agencies want to deliver the best media for business growth. While cost clearly matters, it shouldn’t come at the expense of value.

But still, we all complete the grids, sacrifice the percentages and undersell our talent. Because we understand it’s a benchmarking exercise.

And for that, we all pay the price.

Hannah McCready is communications manager at The Specialist Works