Over the past year there have been some pretty big media pitches and media consolidations announced – Vodafone, Heinz, Microsoft and numerous other large local market clients have all taken the decision to review their media agency arrangements.
It seems that yet more are to come with Telefonica rumoured to be looking to pitch their media accounts this spring, and perhaps another round of car company pitches to come. So what prompts clients to call a pitch? When should you consider reviewing your media agency relationship? And is there such a thing as the best time to call a review?
Firstly, there are the commonly recognised catalysts, the executive team / marketing team has changed and the newly appointed CMO wants to surround themselves by agencies that they have selected.
Second, there are situations where pure financial benefits of consolidation of media into one ‘group’ or agency network drive the pitch agenda. Or, a re-pitch of a consolidated account is deemed to drive more value than working with the incumbent to improve value.
Third, is when something is broken in the product or relationship. This could be the media agency performance, client performance or in most cases both sides just are not working well together. In all these situations there is often a very clear and obvious reason why the account is being pitched.
The fourth and rarest (but probably best) reason for a media pitch is to redefine what media is, or could be; how it links to other disciplines like social and digital, and how new integrated resources can be applied to build value for clients. Below are some of the reasons we have come across recently that have prompted a brands to do a bit of ‘media shopping around.’
1/ The client organisation’s footprint has changed and the priority markets have too – emerging markets are now not so emerging, and more emerged!
2/ The original media deal did not include any of these now important territories and the agencies used in these areas have never really been assessed or been brought into line with the major developed countries. The potential upside of pitching media could be significant as the media spend in these markets is only going one way – up
3/ The audience has moved, the channels used have altered and the media deal has not. With digital, social and mobile media becoming increasingly important, the expectation of personalised relevant media becoming more prevalent and the growing need to drive consumers to rich content experiences, the current scope of work and agency deal seems light years away from the reality of media planning and buying in 2014.
4/ The agency ecosystem has changed, the scope of work has altered and there are multiple agencies that all say they handle the new digital disciplines. In this situation it may just need a clarification of all parties’ responsibilities but it may be that if these changes are significant there is a need to re-assess media agencies’ capabilities to ensure that the right agency is delivering the best quality work possible and that you are getting the best value possible.
5/ Your competitors appear to be more innovative and creative than you and you are fed up with the CEO barging into your office telling you about another competitor media initiative. Alongside this, you have to agree that the day to day media solutions being presented seem a little formulaic and routine. The internal and agency teams know what works and so there appears to be little hunger to try anything new or different. Reviewing capabilities and delivery for media innovation as part of a pitch seems eminently sensible when you consider the speed of change of the media world.
6/ You are not certain that you are getting the best media deal and that the media agency is ‘the one’ for you. It is not that they are doing anything wrong, but with them having won a couple of new (and possibly nearly competitive) accounts, will their new clients be getting better prices and stronger teams (at your expense)?
In a lot of the cases mentioned, a media pitch is one of many courses of action and will not in all or many cases, be the best solution.
Perhaps re-negotiating the media deal, re-clarifying the scope of work, getting a new contract, setting up new systems of evaluating, re-energising your working relationship or extending your regional coverage will achieve the result that you want.
If you have followed best practice and have structured your media agreement so that it is regularly reviewed by all parties with the performance of both client and agency evaluated, if you monitor not just pricing but value, and if you invest time in longer-term planning and collaborative working, then sustaining a long term relationship with your incumbent is likely to be the more appropriate route.
Or perhaps it is, indeed, just time for a change.
Ultimately when considering all these things clients need to believe that the benefits of a review will be worth the cost to the business of pitching; not only any media pitch consultant / auditor fees but the cost of executive time, and day to day disruption, and the time to be spent on an effective transition. For those CMOs with multi-million media budgets a very small percentage saving or even a more innovative media strategy will usually deliver way beyond the costs incurred.
Simon Francis (left) is CEO of integrated marketing consultancy Flock Associates.