Scottish Government Media Tender
Is the Scottish Government media account a Golden Goose or a poisoned chalice? As up to 199 public bodies consider putting their accounts into Mediacom, The Drum wonders if the agency might regret getting what it wished for?It's been a topic of discussion before, and has reared its ugly head once more with the announcement that 199 publicly funded clients now qualify to use the contract, should they choose to do so.That such a large piece of business – worth up to £60m – all goes through one company, MediaCom, which retained the contract last year, is a matter that frustrates the other media agencies in Scotland. The advertisement that ran to highlight the tender last year listed the Scottish Government and associated departments and agencies, non departmental public bodies, Health Scotland, NHS24, Blood Transfusion Service, Scottish Parliamentary Corporate Body, Quality Meat Scotland and ‘Other UK Government Departments’ as clients that the winning agency would service – in effect, all Scottish public bodies.Feather Brooksbank recently lost its £4m account with Scottish Enterprise, while smaller public body accounts are also capable of switching their accounts within the framework should they wish. The move is apparently reaction to the McLelland report from 2006 which reviewed the procurement practices by the Government, and came back with many recommendations of cost saving. But Euan Jarvie, managing director of MediaCom Edinburgh, is quick to point out that with the number of public sector clients the agency already works with, the account has yet to increase the agency’s workload. “When you work in this industry in Scotland, a large proportion of your business is probably public sector anyway. For instance, before we won the Scottish Executive framework contract in 2004, we were already working with partners inside the contract, so when we came to tender, Quality Meat Scotland became part of that tendering exercise. “It’s very complicated, with a large brief, with different types of clients in different sectors, but because of previous and existing work we do, we are used to working within these sectors,” says Jarvie. However, rivals claim that the media framework only takes into consideration the buying implications of the contract, placing most of its emphasis on cost. And while cost is, no doubt, a major driver of the agreement, critics claim that planning and strategy might be one area that could suffer as a result. Financial reasonsGary Wise, head of communications planning at Feather Brooksbank, says: “It is strange that the Government uses one media buying agency and then a whole raft of agencies in other disciplines. It suggests that media buying is purely about putting it all in one place for financial reasons, to get the best value from that one company and it suggests that it isn’t the case in the other disciplines. “It would be more effective if divided up, as any agency with a part of it would take pride in servicing that part. As a media buying contract it’s huge, with so much to it that it becomes a massive co-ordination job. If it was split between agencies, it would take away a great deal of the administration for the one agency and each part would gain a different approach. Different agencies work in different ways and an account as big as this should utilise that and use different agencies as a result.” This is something that the Government admits that it considered and, in fact, operated until it appointed Mediacom to its enlarged account in 2004.“We did consider it this time,” says Roger Williams, head of marketing at the Scottish Government, “but decided to appoint one media buying agency because we believe we would leverage the most cost effective and uniform rates on behalf of the consortium through one buyer. We have had, in the past, two media buying agencies and consider the current arrangement more effective.” Yet Caroline McGrath, managing director of Media Shop Scotland, is another who believes that the contract should be separated out to more than one service provider in a manner similar to that of the COI. “I do not view the collective public sector media spend in Scotland as one account but as lots of clients with varied requirements, priorities, targets and audiences. The most important thing for all clients is choice and I believe that individual organisations should be able to choose a media agency that delivers best value for them,” says McGrath. Experience“What other people in Scottish media agencies are pointing out is that the Government is basically neglecting to consider if there are any other ways of thinking about things,” said another media buyer, who believes that such a set-up is a waste of the experience and ability that is available within other Scottish media buyers. “Through the current set-up, what the Government is inferring is that Feather Brooksbank, Media Shop or Media Vision can no longer contribute to the process – or anyone else, for that matter – despite their experience. “Of course, the qualitative aspects of what media agencies do is one of the difficult areas to measure, but it’s an area of media, a little like creative, which is hard to value. In media terms there is the strategic thinking and the planning side of things which is critical to the process,” continued the media insider. But Jarvie makes a valid argument for the ability of one agency to service large accounts in highlighting the number of international organisations which work with several creative agencies but only use one media buyer, including its own work with Royal Bank of Scotland. Continues Jarvie, “If you look at Ford Motor Company, it retains Mindshare worldwide. Abbey retains Carat worldwide, but it will use a raft of creative agencies. “Media is one of the few places where economies of scale really can help with the leverage of collective or single media trading, which is very important. It’s not anti-competitive, it’s actually more competitive for clients if they combine their resources and leverage a single purchase. It’s no different to the top 15 advertisers in the UK, and the top media spenders in Scotland, the vast majority of them will have single buying operations.” As to how much the cost of buying was a factor in the choice of agency, Williams says that it was clearly a critical aspect in the decision of which agency could service the account, but says other factors came into play. “Price is an important factor because we are accounting for spending tax payers’ money, but it is not the sole factor. Quality of service both front and back office, advice, market intelligence, personnel, and range of services offered are all taken into account.” Indeed, Williams is simply following finance secretary John Swinney’s orders in ensuring that money is best spent. According to The Scottish Procurement Directorate’s Policy Manual, published in May 2006; “The prime objective of Government procurement is to achieve value for money. Best value for money is the optimum combination of whole life costs and quality to meet the customer’s requirement.” The point has also been made that the possibility of moving all public body media buying contracts into the one agency would make it ‘very difficult’ for the account to ever move due to any other agency in Scotland not having the resource to absorb the business. This would mean that the only real competition, outside of Feather Brooksbank, for MediaCom would most likely emanate from London. This would be a move that surely no one in Scotland would find popular. Another industry source continues to make the point that this may create a lack of competition and that through opening up the contract to so many clients, “they will have created a monster” and that while agencies may yet still pitch for the business, the disruption of any future move would most likely dissuade them from doing so due to the account’s size. Certainly, it is understood that the Government is nervous that other media buyers might already be deterred from pitching in the future when the contract next comes up for review. Such a monopoly is usually against the policy of the Government procurement system, simply because it prevents future competition when it comes to renegotiating price, but the Government can also stand by the need to provide the clearest value of public money spend. In the Competitive Supplier Base section of the McLelland Report, it is stated; “The existence of a base of high quality and cost-competitive suppliers is a vital ingredient of an optimum environment in which to achieve Best Value in procurement expenditure. The availability of that grade of supplier locally in Scotland can provide good service to the Public Sector, benefit the Scottish economy, and at the same time, conform to all EU and other purchasing legislation and guidelines.” The report also states that; “There is a high level of general dissatisfaction amongst suppliers with the procedures and practices operated by Public Sector organisations in Scotland. These concerns are particularly strong amongst small and medium-sized enterprises,” which indicates that businesses outside media share similar concerns at procurement practices. Williams says that the creation of a monopoly is not yet apparent and believes that it is still a contract that can be serviced by others outside of Mediacom. “Our primary concern is value for money. Obviously it is healthy to have competition when tendering public sector accounts and Mediacom is not the only media agency capable of securing this contract in the future,” says Williams. Jarvie also believes that there is still a level of competition able to bid for the account, not just within Scotland, but the UK and in Europe, to which it is by law advertised; “When we went to retain the contract in 2007, there were still a number of agencies in Scotland who could still handle it, and its not any different now. “I don’t know if it will be any different in the future, but clearly what they want to ensure is that there is still competition in the future, but that cannot just be restricted to Scotland. When you consider the way that business has moved, clients will move if they want to get better insight, better return and better strategy and thinking. Now that’s dependent on the agencies to ensure that they have that strength in depth. And any agency can look to get onto the roster from anywhere in the UK or anywhere in Europe.” According to the Scottish Procurement Directorate’s Policy Manual, “procurement should be undertaken through open competition. Purchasers, in consultation with customers, are responsible for identifying suppliers most likely to offer best value for money and for encouraging them to tender.” Jarvie does admit that he believes that it is very difficult for other agencies to compete with MediaCom having serviced the account for so long now. “We’ve proven for the last two Executive tenders that we can deliver extensively on service and price. We’re the single-base media operation in the UK and our trading arm group has reached £2.1billion (in the UK). The reason why we won the business in 2007 was because we were extremely competitive on price but also because we can demonstrate to the collective framework contract that we were able to deliver the staffing resources which were required by every single element of that contract.”Another query made about the use of one agency by several buyers is the ability to fully service an account that spans such a wide brief as domestic abuse, drink driving, child abuse, health and so on. However, Jarvie explains that within MediaCom, the team working on the account is given specialist areas to work across the Government brands, ensuring that no one is forced to become a ‘Jack of all trades.’ While at present it would seem as though MediaCom is comfortable servicing the account under this policy, offering it the best value for money, many are concerned that if the framework of the account is not altered, then the account may not be able move anywhere else within Scotland. Says one media buyer; “It would be tragic if the account had to move south because of its size. But it’s also completely unrealistic in terms of the service levels that it now requires. It couldn’t happen.” Could it?