Magazine article Marketing

Andrew Walmsley on Digital: Best Digital Media Deals Are Off-Menu

Magazine article Marketing

Andrew Walmsley on Digital: Best Digital Media Deals Are Off-Menu

Article excerpt

Media folk have been hitting the slopes or heading South for the sun - the year's work is done, and it's time to hand over the reins to the enforcers, those beleaguered media buyers who will spend the rest of the year chasing media owners and winkling the delivery out of the deals their masters struck in December and January.

The agency deal has been a feature of media trading right back to the mid-80s, when media independents wrested control of the budget from full-service agencies. The theory is that an agency's advertisers all gain by lumping their budgets together and trading as one. The underpinning argument is that this allows greater leverage to be exercised over media owners and translates into better value.

But balancing the books becomes a constant challenge for the agency - particularly as the year-end approaches. If trading has been mismanaged, the agency may have to play catch-up - and it could be the client that ends up funding that shortfall, finding its ads in less appropriate environments.

It's a fixed-price menu for media. You know you don't get the best dishes and the portions are going to be smaller, but you also know exactly what it's going to cost.

Except, of course, you don't. Once a deal has been struck over an agency's entire trading book, it becomes difficult to tell who's getting what, and the agency will often take a rake off the top in undeclared 'volume' discounts.

But all of this relates only to traditional media, right? Wrong. The two staples of the agency deal, the volume discount and the limited menu, are alive and well in digital advertising, too.

You might ask why, in a world of super-diverse media options, with thousands of websites to choose from and tools that allow management of advertising across hundreds of sites, do agencies use this model?

Surely it would be best applied to media in which supply is limited, and share is one of the few levers you've got to play with? When a media market is changing constantly, is it not disadvantageous to tie yourself into year-long deals?

Well, not from the agency's point of view. Aside from the extra income it can generate, an agency deal is cheap to run. A month or two's running around, and you can tie up the whole agency's trading for the year, fixing prices, quality and delivery parameters for the enforcers to work to until next Christmas. Buyers don't need to buy, and planners don't need to plan - the menu is there for them, and the decisions have already been made. …

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