Nick Binns

GroupM

Deputy Head of Trading APAC

A traditional article or blog from an agency trader on media commoditization would typically be a fantastic opportunity to showcase the industries general frustration with our clients laser focus on media price and savings.  We moan and grumble about the situation collectively internally as an industry, but very little is conveyed outside of the industry or explained to our partners and suppliers about this change.   The reality is this is now old news; this focus has been in the APAC region for up to five years and won’t naturally disappear for the foreseeable future.   The art for the industry is embracing and managing the change, or as the Chinese say 危机 or wēijī…where there is danger there is also opportunity, we just need to see it.

Let’s take a step back, whilst outside of the industry we read about how exciting media and change is now and what superb time it is to work in media, the hard unspoken taboo is this is the hardest and demanding time to work in a media agency.   All main media platforms have been commoditized down into laborious pricing excel templates, most key decisions on agencies are based on their ability to offer price improvements whereas new innovative media is deprioritized over traditional media dollar savings year on year.    On average most agencies have to complete over 1,000+ cells or pricing data to enter an advertiser’s pitch process across a limited timeframe.   Whilst fragmentation of media has creating excitement around choice, the rise of advertising budgets in Asia has also raised the importance of ROI and accountability of media to deliver tangible value or globally reported savings.  Sadly this value is largely determined as media rate improvements by our customers, in a region where inflation is prevalent across all traditional procured commodity types.

Whether media savings and commoditization is right or not is not for us to say unilaterally, what is more important to debate is whether this is a sustainable focus for the long term.   The hard reality is purchasing low cost Television spots (or any media) for advertisers can be achieved (thanks to GroupM), but more importantly how this ‘economy or budget media’ buy option contributing to a client’s business performance success is a vital bigger question to ask.    A dynamic contemporary agency should by default offer a plethora of services, and cheap budget media is one of those, but how important this is for the client needs to be relooked at on a yearly basis.

As an industry, working with platforms and publishers, what do we need to do differently?  Putting it simply, we need to sell more effectively (dirty word for some, insert ‘promote’)  We need to sell with a balanced focus on pricing and performance, equally selling various value types to advertisers beyond just ‘budget media’ options.   Selling bespoke research, selling content opportunities sell new media metrics and measures of success and also sell harder the true impact of internet and data fuelled media – i.e. selling performance with the right data, not just the of absolute cost media.  Whilst we think we have the trusted advisor relationship with clients, the hard reality is there is no perfect solution to an advertiser’s media brief; there are multiple solutions – some with classical and contemporary media routes, some with just classical media.   We need to sell in these contemporary media opportunities and their contribution to an advertiser’s business performance success, not just the unit cost of this contribution.    Increasingly, advertiser agents will have to start working collaboratively with media partners and suppliers in delivering and determining this measured success for advertisers, accessing and evaluating relevant new and existing data and not agriculturally just horse trading with media vendors on media unit costs and rates.

In terms of commoditization of media, we have to accept this change has happened and is here to stay in some form.   Agents and suppliers need to work together in demonstrating there is value in everything we plan and buy, not just around cost savings and pricing.    As an industry we need to change what we promote and how we effectively sell it to our customers and advertisers, if we don’t the existing ‘show me the savings’ dichotomy will remain a constant.   The elephant is there, it’s time to work with it and not try and hide.

In a nutshell, time to change the measures of success and performance within media investment.  There is a clear need for a focus on new reporting currencies and working even closer with partners and suppliers for more proven effectiveness research, appraising relevant data points and nurturing ‘lightning strike’ implementation strategies and tactics.

Actually, sounds like an exciting time to work in media after all…

Views expressed on CASBAA 20 | 20 are those of the authors and not those of the organizations they represent, CASBAA itself or any of CASBAA’s members.