Opinion

Is it possible for a media agency to win a pitch without dropping its pants on price?

Darren WoolleyIn this guest post, Darren Woolley wonders whether media agencies are able to win a pitch without slashing their rates.

In a market place obsessed with prices and rates, it appears that unless you can win the race to zero as a media agency, you have no chance of winning.

But in actual fact, if a marketer is willing to give up this one dimensional obsession with media rates and start focusing on the performance of their media and the value of their media investment, then media agencies have a huge opportunity of winning business without playing the media rates game.

The reason I say it is because of the Golden Rule.

That is the person with the money makes the rules, and in this situation the marketer has the budget, and so they get to set the rules by which a media agency is selected. If the final selection criteria is, “How cheap the agency can deliver media?” then there is no way a media agency can succeed unless they play by those rules set by the marketer (or their procurement team).

But let’s say that one day a marketer wakes up to the fact that they will only ever get what they pay for and decides that media value is more important than simply the lowest media rate, what then?

It will then depend on what the marketer and the brand define as value.

There are so many ways media agencies can deliver value to a marketer and their brand. In the pitch process, it would be simply a matter of finding the agency that delivers the right type of media value.

So what type of media value can media agencies offer?

Content. Media agencies have access to a huge amount of existing content, through their media owner relationships. For those marketers perusing a content marketing strategy, the right media agency is in a prime position to access high quality and desirable content. They can also assist in bringing the brand and the right media owner together to create new content specific to the brands needs.

Owned, earned and bought. The right media agency is able to provide a marketer and their brands with specific, data based strategic advice on how to measure, manage and maximise the media mix across all three, rather than the often conflicted advice of separate agencies.

Data and analytics. Media agencies not only have access to huge amounts of customer data through their media partners, especially online media and publishing partners, they also have the capabilities to integrate this data with the brand and company data the marketer holds, into a data management platform (DMP) to extract customer insights and inform creative and channel strategy to deliver greater effectiveness.

Customer insights. Media agencies are using the rich sources of customer behaviour data to identify customer behavioural trends and extract specific category and brand insights based on the data available to them from an extensive range of sources.

Performance media. All of this leads to the ultimate bottom line in media, which is the focus on the performance of the media investment in driving changes in consumer behaviour leading to either leads or sales. The increased focus of media owners and media agencies on the consumer path to purchase and the availability of technology to be able to track and measure the effectiveness of the media channel and the creative is making media a performance investment.

In a pitch, media agencies are often confined to simply delivering their expertise in a narrow cast of media planning and buying. Yet media agencies are well positioned in the roster to provide a much broader range of media value beyond simply selecting and negotiating media at the lowest possible cost.

If marketers are open to exploring the value in their media process, the media agency can be measured on how well they are able to deliver across all of these areas of value, rather then just cost of media.

The ultimate expression of this is when the media agency is able to link their own remuneration with the delivery of this media value (not cost) for the marketer and the brand. Instead of simply recovering the cost of providing the media services, where the media agency is willing and able to enter into a fee arrangement linking the delivery of the agreed value to their own remuneration, then this is proof of their commitment to delivering value, rather then just cost recovery.

Unfortunately too few marketers are in a position to be able to remunerate their agencies on the basis of performance, because they are managing a marketing budget, rather than contributing to the P&L of the organisation. Instead, the marketer may opt for paying the agency a bonus on top of their fee instead.

Whether the payment by results is accepted or not, simply the offer to be remunerated this way is a tangible expression of the agency’s focus on delivering value. But ultimately this will only be successful if the marketer themselves is in a position to not just identify the value offered, but even values it in the first place.

Which sadly, many are not.

Until then, agencies will continue to compete on rates for marketers who know the cost of everything and the value of nothing – including, dare it be said, the value of their own brand.

Darren Woolley is global CEO of TrinityP3 Marketing Management Consultants.

ADVERTISEMENT

Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella Asia newsletter now.

 

SUBSCRIBE

Sign up to our free daily update to get the latest in media and marketing