Selecting the right media agency is one of the most important decisions a marketer makes. The relative size of the media budget and the importance of relationship, skill and fit in delivering maximum media value cannot be underestimated.
In this P3 e-news, Mark Chesterfield of P3Media discusses the critical issues marketers should take into consideration when selecting a media agency.
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things to consider when selecting a media agency
Size (buying ‘clout’)
The majority of national advertisers buy through ‘independent’ media agencies, and the size of their billings can significantly influence the level of discount an advertiser will enjoy. Membership of one of the top four buying groups is also a key aspect [Equmedia, MIMO, OMD, Zenith] and these four dictate the majority of rate discounts, terms and conditions that will apply to the advertisers’ business. Look for: demonstrable billings base; a range of client advertisers of varying size; a long term client base; membership of a major buying group. Strategic Resources
A number of ‘specialities’ have emerged within the media function including Media Strategist, Consumer Insights Specialist, Sponsorship Specialist, Econometric Modelling Specialist, Research and Technology Specialist, etc.
Look for: a good range of specialist functions; demonstrable strategic performance, probably as case studies; ‘proper’ specialist resources, clear demonstrations of consumer insights that led to strategic insights. Technological Expertise‘Smart’ software to analyse the data such specialisations interrogate is now on the market. Optimising software was the first, rapidly followed by Modelling software (awareness, sales, response), true Econometric Modelling software, Portfolio Management software, etc.
Look for: a range of both syndicated and proprietary software tools; explanation and demonstration of their function and use; case studies of application; and a demonstration that they can and will be applied on a day-to-day basis.
People ResourcesSpecialist resources require specialist personnel and some of the new areas need people with skill sets from outside the industry. It is not unusual to see a dedicated Market Researcher in the Consumer Insights role, or an Economic Statistician in the Econometric Modelling area.
Look for: a loyal, long term staffing base (low churn); dedicated resources or guarantees of time and effort by individual name or specific level of seniority/expertise; depth of resource as well as breadth. Experience/Expertise
Some media agencies have developed internal ‘cells’ that specialise in a particular category or industry.
Look for: expertise in your category or industry across a range of individuals; experience in the basics as well as the ‘new age’ specialists; a cohesive team that provides both youthful creativity and mature experience. Management Skills
Media agencies have become business units in themselves and their revenue and profit centres require skilled and seasoned management. Most are run by experienced media specialists/generalists and the skills these people bring to the table are critical to their success.
Look for: key personnel who know the media buying business and have experience across many industries and categories; managers who have ‘skin in the game’ (hands-on with clients, the media and industry experts); demonstrably good management skills (strong and consistent agency performance). Remuneration Structure
Remuneration is most often based on a ‘cost plus’ formula that sees the media agency remuneration comprised of a salary + overhead + profit calculation based on the advertiser’s needs and expectations. In some cases, advertisers also enjoy a Performance Based Remuneration (PBR) aspect that rewards or penalises the agency on performance.
Look for: a flexible remuneration arrangement based on reasonable salary structures, overhead multiples and base profit margin; the willingness to participate in PBR arrangements; demonstration of putting their profit on the line (case studies); a workable review facility that recognises the ebb and flow of budgets and workloads. Chemistry
One of the most important parts of the relationship is ‘chemistry’ or ‘fit’. Most relationships that go long-term are based on mutual respect, understanding and consideration.
Look for: a willingness to listen as well as talk; something more than the camaraderie of the new business pitch; a genuine interest in or passion for your business; an open and honest approach that will engender trust and respect.P3Media has a comprehensive database of the media agencies and consultancies in Australia, both big and small. For more information call Mark Chesterfield at P3Media on 02 9279 4997 or email email@example.com
P3TV production workshops for advertisers are coming
Three P3TV Production Workshops for Advertisers are to be held at the Nine Network Studios.Sydney – 9 am – 1 pm Thursday Sept 29
Melbourne – 1 pm – 5 pm Tuesday Oct 4
Sydney – 9 am – 1 pm Thursday Oct 6
Cost is $450 per person and $395 for AMI and AANA members.10% discount for 10 or more participants from one company.For a booking form email firstname.lastname@example.org
marketing and advertising summit – sydney 2005
The Australian Marketing & Advertising Summit is on again on September 21 and 22 at the Sydney Convention Exhibition Centre.Themed Partnership for Success, P3 is again involved, sponsoring this valuable industry event and chairing the session on the Use of Music in Advertising.To find out more or to register go to www.acevents.com.au/ad2005/
benchmark your tv costs online
P3TV provides an online service that allows advertisers to see how their agency tv production estimates compare to the industry benchmarks instantly.To find out how you can get ultimate transparency and accountability into your television production costs go to www.p3tv.com.au or contact Clive Duncan at email@example.com