The ongoing Channel 4/GroupM stand-off is rather worrying for advertisers for number of reasons.
Campaign reports that GroupM’s refusal to accept a renewal of the same terms it was offered in its last two year deal -hardly an unreasonable offer – is because of ‘pressure from new business wins,’ presumably meaning it’s promised new clients deals which, in this case, can’t be delivered.
Which might lead the clients in question to question why they moved the business in the first place.
Our sources tell us that one of the points at issue is the positioning of ads; GroupM wants the best positions without paying the usual premium.
Either way it’s a mess. Clearly it’s hardly good news for Channel 4, whose ratings have been under pressure ever since it ditched Big Brother and now stands to lose £300m of ads, but it’s a PR problem at the very least for WPP-owned GroupM too.
GroupM is the world’s biggest media negotiating unit and, while packing such clout may be attractive to clients, it also behoves it to get their ads on air. Over-promising in media pitches is common enough but a sensible agency (or agencies) would leave itself some wriggle room.
And clients may be be reminded that sometimes such deals between the giants of the media buying world and the media seem to have their own mysterious agenda.
Clients of Aegis-owned Carat in the UK are sometimes, surprised to discover that the agency seems to favour the Daily Express over the Daily Mail when it comes to targeting mid-market newspaper readers. On the face of it this seems strange as the Mail sells about twice as many copies.
Smaller media agencies often claim that they can actually buy cheaper than the big boys because they don’t have to worry about such mega-deals. A media owner can give them the odd good deal because it won’t mean a massive discount over a huge swathe of business.
GroupM clients Unilever and BT apparently have their own deals with Channel 4 so they’re still on air over the next few weeks. Other clients might look enviously at this and wonder if they’re wise to put all their eggs into GroupM’s basket.