How Calibr8or calibrates the strengths and capabilities of media agencies

This post is by Darren Woolley, Founder of TrinityP3With his background as analytical scientist and creative problem solver, Darren brings unique insights and learnings to the marketing process. He is considered a global thought leader on agency remuneration, search and selection and relationship optimisation.

The article this week about the anonymous disquiet in some sectors of the media industry about the launch of the Calibr8or system is amusing to say the least, because it is exactly this sector that the system has primarily been developed to help.

So I want to take you beyond the sensationalist 800 odd words that makes a Mumbrella story (perhaps they believe their readers are incapable of sustaining concentration on a story longer than five or six paragraphs?) and explain what Calibr8or is and what it is designed to do.

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First, to directly address some of the fallacies put to us by Mumbrella regarding Calibr8or:

  • You have to pay for inclusion – FALSE. There will be at least 30 Agencies assessed initially. Any Media Agency not included that wishes to be included can register for future inclusion.
  • When using the Calibr8or system in the early stages of the pitch process only those Agencies that subscribe to Calibr8or would be put forward by TrinityP3. FALSE. Every Agency will be assessed based on it’s Calibr8or profile and suitability to the needs of the prospective client.
  • Agencies that subscribe to Calibr8or will be scored more favourably. FALSE. However Agencies that subscribe to Calibr8or will be significantly better informed on how they compare to their competitors and as a function of this will be in a stronger position to improve the quality of their offering across time.

It’s an idea right out of the industry itself

When Stephen Wright returned to TrinityP3 after spending two and a half years as New Business Director at Starcom MediaVest, he was full of stories about the frustrations on being on the other side of the pitch fence. He had participated in consultant-managed pitches, client-managed pitches and procurement-managed pitches. Some the agency was successful in and some not. But there were some essential themes that emerged and some trends that were already developing.

He said one of the biggest challenges for a media agency was to be able to differentiate themselves from their competitors as part of the pitch process. With every Agency professing competitive advantage (in word at least) it was very hard for clients to determine meaningful differentiation and the selection process often defaulted to trading and ‘a race to zero on price’.

After all, if every agency had the tools, the people, the systems, the trading position, the expertise, the skills, then all you are left with is how cheap can you buy and how little you will charge. It becomes the ultimate commoditisation of the category.

Even if you do have a competitive advantage in perhaps your trading desk or your optimisation systems, how easy is it for a competitor to completely negate it by saying all those tools are pretty much the same?

The difference between media agencies and all other agencies in a pitch

We manage all types of pitches. Creative, digital, mobile, event, promotional, experiential, social, PR, and of course media. The difference between all of these and media is there is usually an output of the work all of these agencies do for other clients.

However, the work a media agency does for a client is largely hidden or can only really be demonstrated through the strategic, planning and trading process, which is often dry and difficult to follow.

Meanwhile other agencies have tangible pictures and videos to show and tell that are interesting, entertaining and elicit an emotional response, both positive or potentially negative, from a potential client. (Perhaps this is why creative agencies appear to win so many media awards?)

This is why in media, many advertisers and procurement default to having the agency prepare plans to mythical briefs (or real ones) and require them to cost these, with the agency knowing they will be compared and assessed by the cost per thousand and CPM and total cost and not the quality of the thinking underpinning the strategy.

Ultimately it is cost that will end up determining the winner as so much of the quality the media agency offers is difficult to demonstrate in a tangible way or is easily dismissed through lack of clear differentiation.

Compounded by the increased complexity of the media landscape

This is all made more difficult by the impact technology and digital media is having on media agencies and the media themselves. The increased use of programmatic buying, especially for digital and the use of trading desks and demand side platforms means that the media planning and buying process has become more technical, more complex and more opaque for the advertiser looking to select a new agency.

How do they compare one trading desk to another without a masters’ degree in computer science from MIT? And when agencies are asked about their capabilities in this area, all of them maintain they have the best practice capabilities.

The same applies for the growing area of data and analytics. How many agencies will today talk about their capabilities to provide and manage a DMP and provide the analysis, insights and even a user friendly dashboard to provide the results in a real-time user friendly manner? It has become a full-time job just keeping up with the technology, let alone how it is being applied on an agency-by-agency or holding company-by-holding company basis.

The role of the pitch consultant

To keep up with what is happening in the market place across all agencies, TrinityP3 has provided an Agency Register for all agencies to provide their basic details such as key staff, range of capabilities, clients, size, billings and even examples of their work. This is online on our website and completely free and secure so that the individual agencies can update this information themselves and we use this information as a starting point to select agencies.

We have also made it a habit to meet with agencies on request and through the pitch process (some of our competitors refuse to meet with agencies which seems short-sighted to me). I personally spend half a day most weeks meeting with agencies for no other reason than to keep a finger on the pulse of what is happening. This is what our clients engage us for, to provide industry insights of what is happening in the market place.

But how can we get an even deeper understanding of the true capabilities of the agency beyond the performance of the media agency in a pitch and beyond what they say they can do? Some agencies are just not particularly good at pitching, but are brilliant at media planning, buying and management. So how can we deepen this knowledge in a category that is increasingly technical, complex and oblique?

Media agencies also want to know where they stand

The other problem we discovered is that while media agency people all talk with each other, they are naturally not completely disclosing their competitive differences for fear of being eclipsed. This is often compounded by the mixed or misleading messages provided as feedback by many advertisers and especially procurement professionals when giving a debrief (if one is given at all) to the unsuccessful agency.

We have fielded many questions from various media agency CEOs on how we think they stack up across a whole range of skill sets and capabilities compared to their competitors over the years. Why? Because we find that often they are told by a client that the successful agency was better at strategy, or trading, or customer analytics, or the like than they were.

This is difficult for us to comment on because if we were not managing the pitch we do not know how they performed or presented.

But my experience tells me that often advertiser and procurement will provide this ‘tangible’ critique to an agency to cover up the fact that the successful agency was likely a better cultural fit (that is they liked them) or was more aligned (that is they worked with them previously) or a more cost effective option (that is they were willing to drop their prices further or made huge undeliverable promises on media rates).

Calibr8or is a way to solve these issues for advertisers, consultants and media agencies

When Stephen outlined the concept and we started working on the idea, we initially thought about it as a TrinityP3 service. But it became clear that to do this justice we needed to engage media agencies beyond the current level of interaction so that they would be open to providing us with a critical look under the hood of their agency at the engine that drives their services.

It was clear that this needed to be a separate business with a more independent structure and accountable to itself, its clients and the industry.

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Here is how it works. While IBISWorld suggests there 3,429 businesses in Australia classed as media buying agencies, or have media buying capability, Calibr8or focuses on the top 30 media buying agencies that makes up more than the 80% of media trades covered by the SMI data pool. Even covering less than 1% of the potential media buying pool as defined by IBISWorld, we are deeper into the market than all of our competitors.

And the Calibr8or assessment goes deeper too. Each of these agencies (and more will be added over time based on market requests and advertiser requirements) are assessed against eight categories of capability being:

  1. Trading
  2. Strategy
  3. Stability
  4. Market profile
  5. Success
  6. Consumer Research/ Insights
  7. Data and Analytics
  8. Performance Measurement

But it does not stop there. In each category there are 4 scoring criteria. Agencies are scored for each criteria based on what they do, how well they do it and how tangibly this can be demonstrated. Detailed scoring metrics are clearly defined and methodically applied.

The system doesn’t pander to superficial market image, vacuous Agency promises or over-claim (one of the hallmarks of many of the media agency Award processes). True capability prevails. And it doesn’t just reflect the quality of the Agency offering the different specialist skills and areas of expertise which will be reflected in the profiles.

All of the agencies will be represented in Calibr8or and in fact the top 30 are already.

And at no cost to the agencies involved and all are therefore open and available for agency selection by TrinityP3 (who use the Calibr8or system along with their Agency Register), or in fact any consultant, advertiser or procurement specialist who wants to access the Calibr8or system to prepare a short list of best fit media agencies.

What is in it for advertiser and procurement?

Any advertiser or their procurement team can, for a fee, access the Calibr8or database through the agency capability matching process. In this the system provides the user with the range of capabilities and skills in a dashboard where the user inputs the weighting of the level of importance or desirability for each.

It is a balanced system that means that as some skills and capabilities increase in importance others decrease proportionally to ensure not everything becomes important. This means that the marketers need to provide an indication of what they are looking for from an agency.

Calibr8or_AdvertiserWhen the requirements are finalised the system then matches the advertisers requirements with the profiles of the various agencies and provides a ranked list of agencies with the best fit at the top and descending to the least compatible. The advertiser can then look at the individual agency profiles and even revise the weighting on the capabilities and skills to see how this impacts the recommendations.

In this way they are able to obtain a best fit selection of short listed agencies to review, rather then going through the longer and more protracted long list. It also means that rather then selecting from what are often out-dated or misinformed perceptions they have a selection based on their specific requirements.

What is in it for media agencies?

For those media agencies that see the benefit to engage Calibr8or on a consulting basis, the benefit is that they will have an agnostic, balanced analysis of what they do well relative to their competitors and where they are falling short.

It provides the Agency CEO with invaluable advice on how to take their business forward.

But more than this, the system allows them to actually collect the input of their staff perceptions of their own agency and also more importantly, some or all of their clients’ perceptions of the agency’s strengths and capabilities.

In this way the media agency management are able to obtain feedback from their market being it their clients, staff, consultants and media sales staff too.

It allows them to track and manage the perceptions of their media agency brand in the market place that often lag reality and ultimately differentiate them from competitors. Calibr8or provides them with a tool to see how their brand is perceived against the market average. It also allows holding companies to review how their various media agency brands compare to each other and to the market average.

It does not however, allow them to compare themselves directly to a competitive brand.

Imagine you are a media agency that has invested heavily in staff and technology around customer analytics. The investment is made and from an internal perspective it is a growing strength and a possible competitive differentiator. But what if the way you have been communicating this skill set is missing the target or ineffectively communicating the unique discriminators.

With so much technology driven change happening in media and agencies and their holding companies investing millions of dollars in building the platforms and applications required, the value will only be realised when this investment leads to increased business, either from organic growth from existing clients or winning new clients through a successful pitch process.

What is in it for consultants?

TrinityP3 already has an extensive database of agency information that we have used for more than a decade in selecting agencies.

This database is regularly updated by the TrinityP3 consultants with their insights from observing agencies participating in pitches, through agency visits and from industry announcements. But we are aware of the increased complexity of the media category.

TrinityP3 will use our free Agency Register, but for those advertisers that want to get a deeper insight into agency capabilities, there is the option to use the Calibr8or system.

Likewise other consultants can licence access to the Calibr8or system. This is one of the things we have always done, which is to make the systems we develop available to all of our competitors (for a fee).

Consultants use the Evalu8ing relationship and collaboration system across the globe (including Navigare in Australia) and soon we will be offering our Global Agency Register system to other pitch consultants and our Ad Cost Checker rate benchmarking system is online and available to all.

It is not our only source of information to inform the selection process, but it is a deeper source of information, updated on a very regular basis with deep hands-on dives into the media agencies’ capabilities and strengths, with a business model to make the service sustainable.

After all, agencies are already paying for services like this such as their subscriptions to RECMA, SMI Media Data, not to mention the many and varied proprietary research tools they are required to invest in costing millions of dollars per annum just to get started.

What are the implications?

Contrary to some of the misinformed commentary on Mumbrella (but what can we expect from the anonymous raving of their readership)

  1. This is not mandatory for agencies to pay to participate. All of the major agencies and many of the smaller options are already included in the Calib8or system and more will be added over time.
  2. Those agencies that have already chosen to subscribe to access the data in the system and use it to manage and track the perceptions of their capabilities and strengths do so because they see the value in this service.
  3. Agencies that do not subscribe to Calibr8or will of course be considered, as it is important TrinityP3 offers a full range of options in our considerations. Our Global Agency Register is free and we continue to recommend all agency (media and others) to avail themselves of this service.
  4. TrinityP3 is not replacing our search capabilities with Calibr8or. We are simply enhancing the depth and currency of the information on media agencies by accessing Calibr8or as an additional service should our clients require it.
  5. Advertisers, procurement and other consultants are able to access Calibr8or directly if they wish to select a short list of media agencies against their detailed specific needs and not simply based on somebody’s gut instinct.

Ultimately the success of this innovation will be decided, like all innovations, on the perception of the value it offers those using it.

I hope that those that read the Mumbrella article, which was apparently triggered by industry disquiet and misinformation is not the end of the topic but the beginning as we invite media agencies, advertisers, procurement, consultants and media sales people to contact Calibr8or to check out the system for yourself.

 

To find our how TrinityP3 Marketing Management Consultants can help you further with this, click here.

About Darren Woolley

Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 – Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren’s Bio Here Email: darren@trinityp3.com

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