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We really need to talk...

29 Jun 2016  |  Bob Wootton 
We really need to talk...

It's time advertisers, agencies and media owners locked horns under the neutral canopy of the Advertising Association to talk about a cleaner way for the industry to run, writes Bob Wootton

So we have a vote for a Brexit that surprised most inside the bubble and few outside in the 'real' world where I now spend a bit more of my time.

Not the result I'd hoped for, but as I'd tweeted, the slenderness of the margin was.

As I write, we're amidst the carping, recriminations and even party breakdowns but things will have to settle down in a few days as our and the EU's leaders will - hopefully - recognise their various responsibilities to move forwards to a better outcome.

I believe the best way of doing this will be to leverage the close margin to resuscitate the substantive renegotiation that Prime Minster Cameron half-heartedly attempted and that the EU's big players rebuffed last autumn.

Which leads me to the fallout of another significant - if not quite as seismic - event: the ANA report into agency rebates. Because here, too, leadership, diplomacy and negotiation are necessary.

The report fired a much-needed starter pistol by surfacing practices that everyone who's anyone in the industry has known about for yonks.

Like the Brexit, it has also stimulated a flurry of challenges, most of which - as ANA leader Bob Liodice points out in AdAge - have not been to the point, but rather feints and obfuscation.

That's not to say there aren't some really good bits. Group M's one-man rebuttal machine Rob Norman's second blog was excellent and constructive and sets out a viable way ahead.

...Ok, I had to park my scepticism, born of many, many conversations over two decades with advertisers who can't seem to get their agencies to finalise their contracts even many months or years into, and sometimes even towards the end of, their appointments...

Other industry reactions and rebuttals aside there is actually a great deal for everybody to get their teeth into for a greater good.

- The report implies the less than entirely benign influence of some purchasing/procurement officers and outs the lack of commercial engagement amongst many marketers today.

- It reminds agencies that their cut-throat pitch pricing practices are instrumental.

- It confirms what everybody knows; that is there is legion bad practice abroad.

Over the years, I've met with a steady stream of media owners from the very biggest down, seeking my advice about how to disentangle themselves from the thrall of the big buying groups.

Just when media and media owners' offerings are becoming more varied, diverse, interesting and complex, so the client community has downsized, deskilled and devolved to the media agencies.

The media owners find themselves with few direct relationships with the very clients they need to engage (though they have also had a hand in their own predicament as they pursued the administrative convenience and efficiencies of servicing fewer, consolidated buying points).

Now this throng of the intermediated is being joined by tech companies who have willingly white-labelled their stuff to the big trading desks in the short-term pursuit of growth only to see it subsumed and any deeper direct client relationships that might offer better margins wither and perish.

Agencies having forfeited their trusted advisor status by taking kickbacks form their suppliers, the ANA report plays into hands of the media consultants as they have become the compasses the advertisers turn to as they try to make sense of things.

(Not so much the legacy auditors, whose price pools undoubtedly appeal to procurement's beloved benchmarking processes but which are challenged by the absolute accountability of digital / programmatic media. If ITV adopts Sky's Adsmart - which I gather could be on the cards once an ongoing sales system change is complete - pool analysis will become meaningless).

No surprise, then, that each has been quick to offer its own welcome vision of what advertisers should now do, and as one would expect, there is considerable alignment.

So back to where I started, the tectonic plates of media are shifting. Yet however large, individual industry players are unlikely, unwilling or incapable of engaging. They're also rightly leery of competition law.

But we should be talking this through, not spitting at each other from our silos, and that's where our industry leaders come in. The leadership, diplomacy and negotiation I mentioned earlier is what they're there - and well-paid - for.

Surely the leaders and leading members of the advertisers (ISBA), agencies (IPA), major media owners - and yes, perhaps even the leading consultants - should lock horns under the neutral canopy of the Advertising Association and enter constructive talks about a better, cleaner way for the industry to run.

It might be wise to alert the Competition and Markets Authority, seek its guidance and give it the opportunity to chaperone or observe such talks.

Like iron filings on a piece of paper placed above a magnet, business arranges itself according to lines of force. The strong and universal force here is money as the ANA has reminded us. (To continue the analogy for those with a bent for physics, there is also arguably a weak force; that being recognition which the individual can convert into career advancement - and thus the strong force of financial reward).

The role of the advertisers who fund the whole shooting match is therefore critical. Progress will pivot on recognition that the business model has been allowed to drift into a bad place and must be pulled out of said weeds.

Which will mean increased investment in visible remuneration in return for complete outlawing of the invisible. At all levels, whether agency, holding group, whatever.

Probably a formal charter that all parties sign up to building on the inputs from K2, ebiquity, Media Sense and ID Comms too. ISBA's new Model Media Contract is also relevant.

This is a UK view and some will doubtless say it's untenable in other markets. I don't think we should be deflected and would go as far as to say that I don't care 'how it works' elsewhere. We and the US have been and remain world leaders in the export of capability and talent. Best we get our house in order and others can follow the new lines of force we create.

Yes, it might take some courage and there's some leadership change in prospect that doesn't help. The AA's brilliant leader Tim Lefroy has declared and - how to put it? - some others aren't getting any younger either and will declare soon too.

Would I throw my hat into the ring to facilitate such discussions? Fuck yeah.

Will they go anywhere? Let's be optimistic. I recall when ISBA acted as the 'big tent' for all the disparate food and drinks manufacturers, supermarkets and fast food operators when HFSS constraints were in prospect. They didn't want to talk either but ultimately saw the need and wisdom of doing so under the chairmanship of the extremely capable and persuasive Martin Glenn.

Change could be slow, but I nevertheless also take heart from how pitching has changed. Once, clients used to pitch numerous agencies and it was a costly crap-shoot for both sides. Over time, most have come to acknowledge that no more than four, including or excluding the incumbent should be pitched against each other. It's not a law, not even a rule, but a working consensus amongst the biggest, best, most responsible players.

Like, I say, we really need to talk.


Bob Wootton is principal of Deconstruction, and is an advisor to Media Sense and Blackwood Seven.

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