How media agencies are ripping off clients and media owners
Are we ripping everyone off? Sam Garrity, managing director at digital marketing agency RocketMill, explains what’s happening in our media industry.
The media industry is not what it used to be. We have created one where agencies are allowed to receive large undisclosed revenues. This is revenue that clients do not know about and that doesn’t make its way to media owners. The behaviour required to maximise these revenues results in client briefs being executed without an objective mindset and one that squeezes media owners.
That means clients – the businesses that fund our industry – and media owners – the businesses that build us audiences to talk to – are being ripped off by agencies, the businesses that need them both to thrive.
Sam Garrity on the state of our media industry
This short video shines a spotlight on how agencies generate this revenue, what it then does to their mindset and how we’ve collectively created a media landscape that’s not working well for anyone.
This is a story that has origins in the time of media agency fragmentation, when the industry moved away from full-service shops. This move was partly driven by a desire to maximise profit in the both the creative and media planning/buying areas; however, over time this move resulted in the commoditisation of media planning and buying.
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The commoditisation of media planning and buying allowed clients to become very savvy in how they procured media agencies. In some cases, global brands reduced the tender process to asking agencies to enter the prices they can buy certain media for on simple documents. No creative thought, no chemistry.
This in turn put vast pressure on agency pricing, with a dramatic race to the bottom – and in many cases – beyond the bottom. This meant many agencies found themselves with non-sustainable business models and loss making client contracts.
So the touch paper was lit by clients, but what has followed from agencies has gone beyond any acceptable redress.
Agencies have become experts at crafting undisclosed revenues, ranging from the obvious rebates through to opaque technology stacks.
RocketMill is a digital marketing agency based in Brighton. RocketMill works with clients such as Hitachi, Espa and Jaguar Land Rover.
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