Pulling back the curtain on the “benefit” of employing big media agencies.

What is the rationale for employing a large media agency?

That your brand will get more bang for its budget, making your advertising more effective?

What is the truth of this proposition?

None.

The only parties that benefit from large network media agencies are global clients, and shareholders of those network agencies.

Big agency networks dominate the advertising billings table.

The 2015 billings table reveals the top 10 agencies listed represented 50% of all recorded advertising expenditure.

If you break this down further by agency network, WPP agencies represented 23% of expenditure, OMD agencies 10%, Carat Dentsu agencies 10% and Publicis network agencies 9%.

Multi-national clients and the largest spending advertisers dominate the billings of these agency groups.

There is a myth that to get the best deals, advertisers need to ally themselves with these big agencies because they get the best deals in the market by default of their scale.

The reality is, if you are not a big budget client, you gain no advantage from your agency’s big billing inventory, and should not be using a large agency

Only the biggest spending clients benefit from utilising big agencies and their network connections. They wield the power to ensure the benefits of scale go their way.

The smaller spending clients end up subsidising the big clients in three ways

They not recovering rebates from agency share deals relative to committed budgets

They do not benefiting from quality attention from the best staff

They allow the agencies to allocate media funds to inappropriate media for brand plans.

Large agencies negotiate share deals from media owners to supplement their incomes. Big clients wield their power to ensure they also benefit from these share deals. This can take two forms. First, direct cash remittance, or second, incremental media value against committed budgets. All client expenditure contributes to the share deal figures. Not all clients benefit.

Bigger spending clients demand and get the lion’s share of best thinking and attention from within the large agency talent pool. Implementing a big budget is a very simple way to dominate the market and maintain above average share of eyeballs. By definition lower budget clients need better attention to allow their budgets to compete beyond the sledgehammer approach. Stretched staff within agencies, dominated by junior overworked employees, are tied up processing budgets for large clients, and do not have the time to dedicate to smaller budgets to ensure quality of thought.

With no objective reference to validate agency thinking, unless you resort the additional expense of external audits, your campaigns may be planned against agency deal imperatives, not brand imperatives. Brands therefore lose out via the double whammy of not benefiting from the very deals their expenditure is contributing to, and reduced value through inefficient media allocation.

Ask yourself the following three questions;

Are your budgets supplementing other clients’ deals?

Are other clients enjoying better media value as a consequence of your media budgets?

Are your brand’s budget allocations being dictated by your agency’s deals?

If you cannot answer all of the above questions with a clear and precise no, then your precious advertising budget could be mere “deal fodder” for your agency’s bigger spending clients.

The importance of defining target audiences, a necessity for ultra-competitive market sectors.

The health and beauty market represents a very competitive arena, the perfect storm of large volumes of advertising dollars chasing, at face value, very similar audiences with very similar messages.

There are two good rationales for defining target audiences when competing in noisy markets, such as health and beauty.

The first relates to getting value from any given budget, determining media channel selection and the price to be paid for implementation against respective channels. If you can point the pound notes at the audience most likely to be your consumers, long and short term, this represents efficient use of resource. How you define your market can lead to even greater budget efficiencies. Always move beyond demographics, but be aware of diminishing returns from definitions that are too granular and prevent the benefit of brand awareness across a broader audience.

Options for going beyond demographics include lifestyle and attitudinal data, and of course metrics derived from advanced digital traffic attribution, which should be in place for audience profiling and further segmentation opportunity. The media repertoire of the contemporary consumer requires an omni-channel approach. See our EllaOne case history to see how target definition leads to a channel selection designed to deliver effective brand messaging and pull consumers through the consideration phase towards conversion.

The second reason for defining audiences relates to message resonance. How you say something is just as important as where you say, and what you say. This influences media format selection, and allows good media planning skill to enhance creative work. Here, collaboration between the creative and media is essential. The media has to work harder to ensure optimum message performance. Good media planners understand the relationship between media formats and audiences in terms of reception and ability to deliver brand objectives. They can apply due diligence through familiarity with messaging and relevant channel and format options. Do your media and creative teams collaborate? See our UltraDEX case history which demonstrates how audience knowledge delivered a brand narrative for oral care away from the usual, and increased market share with low budget availability.

If, in 1967, the medium was the message, what is it now?

"The personal and social consequences of any medium result from the new scale that is introduced into our affairs by each extension of ourselves, or by any new technology"

An observation from Marshall McLuhan’s The Medium is the Message first published in 1967.

Then was a much simpler time for media. A monochrome dominated world.
The idea that the power of a message could be influenced by the context of its presentation made sense, and was accepted.

Television was the new medium of the day. Society was changing, established world order shifting as the baby boomers challenged the attitudes of the old, post war hierarchy. Television made a significant contribution in challenging the cultural status quo in a time of dramatic social upheaval.

Since then, an alternative media dimension has developed, driven by affordable new technology and the digitisation of content through the internet, providing a massive catalyst for personal and social consequences, at a global and local level.

The old definitions of media are now too loose to be meaningful.
For example, television referred to a channel or device or a medium.
Now "television" can be consumed via big screen or small screen, mobile and computers, watched live, paused or catch up and on demand. The same goes for film, radio and print.
New genres have been introduced with social and search.
Posters have changed, no longer disembodied copy, digitised they provide opportunity for location and time relevant messaging.

It's time for a redefinition of what we mean by the term media.

Media is the content interface supplied via film, video, audio-visual, audio or the written word.
It contains the message and can be distributed multi-channel, and consumed multi-format via a multiplicity of devices.

Channels are means of content delivery.
Devices are means of content consumption.
Formats are means of content presentation.

We are concerned with how media presents a conduit for advertising.
Advertising contributes to culture through content (along with editorial, opinion, views, news and announcements) with commercial intent. Blurred lines between editorial and advertising, of a varied quality, introduce complementary commercial formats of native, sponsored and advertiser produced content across channels in addition to advertisements.

Advertising is strictly one way messaging (not pure communication) creating its own truths via brand narrative as a series of signs, sources of information from which consumers create their own versions of reality, relative to selected identity. This applies to both pre and post digital media

However, pre-digital channels message differently to post digital.
For example, through core readership, linear viewing and listening, or the occasion of the cinema visit, pre-digital audiences absorb the context of the mode of delivery, the medium as the message, as a receptive audience. Pre-digital media consumption provides a unique messaging ability to
establish differentials, a necessity for brand propositions. Pre-digital media provides for symbolic exchange value, intellectual stimulation through ideas, opinion and identity reference points.

Post digital channels, through sheer proliferation, deliver a diluted form of communication.

“It is information, in the sense of data processing, that will put an end to, that is already putting an end to the reign of advertising. That is what inspires fear, and what is thrilling. The “thrill” of advertising has been displaced onto computers and onto the miniaturization of everyday life by computer science.” J. Baudrillard. 1981.

Post-digital media offers no fixed reference points through standardised formats or discourse, only multiple access opportunities, where consumers become integrated feedback, generating a contemporary horoscope for brand marketers, working on the false assumption that past actions dictate future actions. As digital expands, it loses value and the language of advertising, once powerful pre-digital, is now diminished and displaced by data processing. Dilution of the message becomes inevitable, in turn feeding a vicious circle of increased volumes of meaningless messaging trying to recapture lost power of narrative.

Opportunities for brand influence now become data collection moments, offering reduced leverage for creating brand propositions through difference. As the market progressively investigates the application of programmatic trading for all media, audiences become data feeds for a simulation model of commercial imperative. Sound familiar? Basically a working example of humans as a knowledge/power source, albeit for machine learning, instead of the dystopian reality behind The Matrix. Audiences transformed into aggregation fodder via valueless content.

Now, the medium is bait. The message vanishes, replaced by process of past actions, anticipating future action by proxy.

Science is not relevant to the development of brand advertising

Assessing creativity is subjective and human subjectivity can never be measured by scientific reason. Therefore, science has no role in the creation of advertising.

Can we ever know what we think we know, or do we just happen to get some things right, sometimes, about the way things are?

Understanding something is not the same as believing, and believing something does not reveal truth, or intrinsic knowledge.

Despite this, some practitioners within the advertising fraternity seem obsessed with reducing advertising, or the power of persuasion, to a single universal truth via the false application of science, on the basis that, if they can make the label stick, because it’s science, it must be true!

The increasing demand for tangible return on investment has opened the door to the introduction of scientific reasoning to establish credibility for non-proven theories and sales pitches, based on a simple expectation that the future should resemble the past.

This is misleading, and should only serve to remind one and all that, behind every proposition, lies a very large element of self-interest.

For example, we do not understand why consumers behave the way they do. Do we not all agree, the consumer is irrational, and the subconscious controls most actions in respect to brand choice and purchase?

So whilst it may be credible to draw on past experience when making inference about cause and effect, what grounds do we have for relying upon extrapolation from the past into the future?

Where is the insight into the nature of human behaviour to allow us to do so?

Knowledge of the unobservable world is not possible.

The unobservable in this instance being the process in the consumers’ mind that eventually leads to a specific brand purchase.

Aggregating large numbers of actions through big data?

That’s not science, that’s simple best practice based on mechanical analysis of past outcomes.

In other words induction, and induction is not a rational method of inference, it is informed judgement.

Some are better at informed judgement than others, sometimes, which makes for the difference between good and not so good creativity.

Current thinking in advertising resembles the intellectual world of the 18th century, the early modern period when the mediaeval mindset was being exposed by the Enlightenment, reflecting the shift from the occult and subjective opinion, to mechanics.

This cannot be conflated with a shift towards advertising as science.

Two considered concepts discredit the relevance of scientific theory from the creation of effective brand advertising. 

There are always many alternative theories to explain events

(Under-determination of theory by evidence) and reaching a conclusion via scientific approach means the end of thinking at a certain point when creativity demands ongoing enquiry.

And

All past scientific theories turn out to be false, if not completely, then always to a certain extent

(Pessimistic meta-induction from past falsity).

For example the Flat Earth theory, Newtonian Law, the Geocentric universe, The Theory of Relativity to name but a few.

All past theories prove to be false or incomplete, so why should new scientific theories be accepted?

Advertising influences at the cultural level to build brands, as a source of information in the great sea of culture that we all float around in.

Whoever the cultural intermediaries responsible for the quality of brand communications (advertising agencies, clients, media owners), creativity has to be recognised as the key ingredient. It has no need of a universal truth, it just is (good or not good) and as such needs no rational justification.

The quality of ideas is reflected by ads that work, or don’t, as proven via considered implementation.

Creativity is subjective and transcends pseudo-scientific rigour.

Most can agree on what makes for a good campaign, you know it when you see it, and so does the consumer as demonstrated by advertising with the pay back to back up the common consent of creative excellence.

Creativity is what makes or breaks brands and makes science irrelevant.