Do brands need a chief media officer to readjust the equilibrium of the client/agency relationship?
Guidelines published by the Association of National Advertisers (ANA) in the States last month sent heads spinning across the industry in their recommendation that brands hire a chief media officer to police transparency and ensure media accountability. But isn’t this what the media agency is supposed to do? Do brands really need this role, and why?
Rarely in this industry do we witness unanimous opinion across the top holding company groups on any one particular issue. Yet the reaction of the world’s largest advertising powerhouses to a report published on media practices was possibly one of the closest things to inter-agency harmony ever seen.
Provoking a strong reaction among agencies – who subsequently described its contents ‘inflammatory’ and ‘sensational’ – a report published by the Association of National Advertisers (ANA) in the States claimed to have unearthed evidence of ‘non-transparent business practices’ pervading media buying, threatening to disturb the balance of the client/agency relationship.
Following on from the June research, the ANA issued further guidance that clients should internally appoint a named individual responsible for the accountability and transparency of media investments.
This ‘chief media officer’, in name or in function, as well as being responsible for internal governance processes, would oversee the brand’s media investments, building a close relationship with media agencies, and work with third-party suppliers to maximise ROI.
The rallying cry may have left agencies cold, but nevertheless points to the growing underlying trust issue that, if left to fester, could undermine the client and agency relationship.
At the same time, the recommendation comes at a point when more brands are taking control of their own destiny; why wouldn’t they want someone at a senior level ensuring full commitment to what has become a huge investment that no longer simply buys airtime, but builds intrinsic value for the core business?
Brands relinquishing control to their agencies, either through choice or inertia, has led to the relationship between clients and agencies becoming “toxic”, believes David Indo, chief executive at ID Comms.
“Lack of foresight, lack of internal desire to control media and leaving all of the responsibility to their agency partners because they didn’t have the skillsets internally has been a massive influence in the challenges the industry is facing today,” he says.
“It’s not necessarily the agencies’ fault; in some cases they have been encouraged – and, in some cases, forced – to take complete responsibility of the media delivery and governance of these brands that in some cases are spending billions.”
However, it’s as a result of this climate of diminished trust, says Indo, that media has risen up the corporate agenda. “Chief executives are taking an interest in media now, whereas before, they didn’t.
“People realise this is a critical component of any communications mix and someone has to be accountable for it – and it’s better to have that accountability internally rather than outsourcing to your agency partner, who will perhaps be making decisions based on the interests of their organisation rather than yours.”
David Wheldon, chief marketing officer at RBS, tells The Drum that all parties involved in the management of media must work together.
"I don’t see clients beginning to take things [media responsibilities] away from agencies because when it comes to the planning, buying and digital expertise needed, this needs to rest in agencies. But clients shouldn’t have to abrogate their responsibilities to manage them properly. Some of what’s happened is the abrogation of responsibility.
"Client/agency relationships have to be built on a strong foundation of trust. What I don’t like about some of the recent events is that there are the beginnings of an unhealthy mistrust which shouldn’t be there."
Alessandra di Lorenzo, who runs the media buying for travel brand Lastminute.com and heads up the company’s media business, The Travel People, says full transparency over where spend is going is one of the most important aspects of her role.
“The Lastminute.com group brands are essentially online travel agents, and therefore transparency and the ability to optimise in a transparent way to drive traffic to our pages and get customers buying our products is fundamental. There’s a requirement that’s tied to the P&L because marketing has such an important effect on conversion and a direct impact on our core business.”
She adds: “I think the black box approach – where the agency is not giving the client transparency – is only going to work for a limited time, and probably only works for marketers who are not digitally savvy.”
Moving beyond transparency
It may have dominated the ANA report and be a continual concern for clients, but transparency shouldn’t be the sole consideration for brands hiring an internal media steward – a point made by two executive search firms The Drum spoke with.
Steve Hyde, chief executive of 360xec, believes the role should be less about monitoring transparency and more focused on driving value through a more “collegiate use of data and market information” to increase value.
“If senior heads of media client-side were primarily hired to police media transactional transparency it would be a waste of a good opportunity to engage clients and agencies around defined outcomes (and rewards) rather than influencing the size of stick they might use to encourage agencies to change their practices.”
Amanda Pitt, partner at Grace Blue, says hiring a senior role for media in-house could improve the agency relationship.
“If you look at some big organisations now, whether you’re a Unilever or a Sainsbury’s, and you appoint a head of media role, that person is very different from someone who is going to cover the transparency issue. They all obviously have to work collaboratively and they’ve got to have a huge amount of trust, but they’ll have scaled dimensions. They’re very different skills to say a chief marketing officer role.”
An individual hired into this position would ideally spend time working within the brand’s media agency to foster a more collaborative approach, adds Pitt.
And while smaller brands may not be able to afford to appoint someone to this position, they can still take advantage of the opportunity raised by the publication of the ANA findings to reappraise their relationship with agencies, renegotiate contracts and – in some cases – admit their mutual failings.
From cost to value
Paul Frampton, chief executive at Havas Media Group, is of the opinion it’s critical for brands to have senior leadership and expertise in both media and digital.
He says: “The plethora of opportunities that paid media offers, let alone owned, shared and earned, demand expertise brand-side to navigate optimal solutions. Couple that with the increased need for expertise in data and automation client-side to unlock the full opportunity and investments that media agencies have made to up-skill in this area and there is a win-win for both parties.”
The fact that it’s an exception for media to be evaluated on value, rather than price, is partly due to advertisers not having had this senior media leader in place, he says.
“I would argue that the inability of media agencies to shift these shackles is, at least in part, down to the absence of senior media expertise client-side.
“A senior, well versed media leader client-side can only be a positive for both media agency and advertiser. He/she would help accelerate the pursuit of integrated media solutions across paid, owned and earned, creating deeper engagement with consumers. This would undoubtedly provide more meaningful long-term value than today’s obsessive pursuit of short-term pricing alone.”
The role of internal steward of media, which is still absent from most C-suites, has undergone a shift as, historically, that media stakeholder was firmly rooted in financial or procurement, rather than having a strategic role in the business. But as marketing has become more central to companies’ growth plans rather than being viewed as a cost, so the reliance on traditional procurement has changed (PepsiCo, for instance, scrapped its procurement department late last year, citing the need to make decisions quickly in order to be effective).
Bonin Bough, formerly chief media and e-commerce officer at Mondelez International, says the role of media has “often been sidelined” and left to procurement. With the proliferation of media channels today, it has shifted towards a more strategic consideration within the client’s business.
“If you go back and look at what the media role first looked like, it was commodity buying. It wasn’t really a strategic position. And that worked for a time and place and it was born of the fact that there were five channels at one point in time. It worked for a reason.”
Under Bough’s stewardship, the company overhauled the operation of its media investments around the world, by reducing the number of agencies it worked with, placing greater emphasis on deals with Facebook and Google than on traditional media owners, and by shifting marketing from a cost to a profit-driver in the business as it looked to monetise its media.
“Step back and think about yourself as a global buyer and not just as ‘OK, I’m buying some television spots’, or ‘I have a little bit of a relationship with Facebook’. Begin to think about ‘how am I deploying capital to partners that I can also help symbiotically grow their viewership as well as grow my business?’,” he says. “That’s a whole different perspective, and I think that mindset hasn’t existed in media. It’s literally been ‘Let’s have a glass of Scotch and smoke a cigar and do a deal,’ versus thinking critically about the capital you’re about to deploy to.”
It’s a point made by Lastminute.com’s Di Lorenzo; discussing the contentious issue of media rebates, she believes technology will level the playing field to democratise media investment.
“While there are reports of agency media groups deciding how much they’re spending with publishers based on these deals, I think the new technologies will help shape a new future based more on performance and less on agreement.”
Bough, too, believes digital will hold more sway as brands look to account for their investments. He predicts digital leadership will move into the internal media role because they are without bias.
“Right now most organisations have a digital buyer and a traditional buyer. And they battle over an 80/20 split, 80 per cent traditional, 20 per cent digital. And they’re constantly fighting. In a world where data matters more, if you’re spending 80 per cent of your money on a channel that’s not delivering data or with no strategies to really deliver data, then you’re failing on what the next growth engines at organisations will be.”
Whether advertisers take up the advice to recruit a chief media officer or not, one thing remains clear: media is once again at the top of the food chain for brands, and those investing not just to buy but to build will reap true rewards.