Paying for Planning

By The Cog Blog Archives
Cover image for  article: Paying for Planning

Who should pay for communications planning?  Why are advertisers apparently so set against the idea of paying network agencies for a service most know full well is an essential part of any campaign?  Any network agency executive knows the speech.  "Advertisers won't pay for planning. Yes, they should but they won't. So there it is, we have to accept it and make our money elsewhere."

The obvious objective of this script is to place the focus for non-transparent behaviors on the client. Clients won't pay, we have shareholders, why blame us for advertisers' short-sightedness?  This is crazy logic. Surely it would make more sense to do a better job making the case as to why the networks' planning is so good it's worth paying for.  Nobody buys any service unless they are convinced of the benefits it brings them.

The large network agencies have over time not done a great job promoting their excellence in planning to a non-specialist audience. Of course, they enter and win awards judged by their peers; but ask most CEOs or CFOs and, if they ever refer to these organizations at all, it's as "media buying agencies."  This perception is only fueled by the focus on the size of the deals these agencies make across their client spectrum.

Internally, network agencies do little to promote planning objectivity. Rather, the common practice of having traders sign off on plans in order to ensure that agency-wide or group-wide commitments are met does the exact opposite.  Why would anyone pay for a service provided by organizations that consider it to be so inconsequential (beyond window-dressing) that someone with next-to-zero knowledge of the client's requirements can simply change certain component parts?

What happens within such a system to these agencies' sudden public enthusiasm for the importance of context? The classic trader's response to his planners: "You may win the pitch but I make the money that pays your wages so do as I say and convince your client" comes to mind.

There are though some signs of progress away from the era of the trader. First, it may be my imagination but the number of headlines boasting of huge volume deals seems to have reduced.  We are now hearing more from the agencies' innovation specialists and planners than even a few months ago. Second, and more significantly, whilst the Cog Blog has been on holiday, the U.K. independent agency Goodstuff, whose strength is unquestionably in its planning, has bought itself out from Omnicom.  This is interesting as it always used to be assumed that smaller agencies needed some sort of relationship or affiliation with one of the big boys to ensure "the best prices" (my quotes).

Yet the Goodstuff guys, like the most successful of the U.K. independent agencies the7stars, are clearly comfortable with their freedom from the worst excesses of the networks.  Clients are also it seems increasingly prepared to move away from the big boys. Nielsen data quoted by Goodstuff shows that U.K. independent media agencies grew their billings over the period 2012-16 by 27% as against 12% for the networks.

These independent agencies have discovered that clients will indeed pay for objective and independent planning advice. I don't have the data but it seems likely that their fees from clients are higher and their income from media trades is approximately zero.

A different, more transparent model in other words.

The irony is that the networks, in handing certain planning decisions over to the whim of their traders, have over-ridden the core principle of objectivity, and in so doing have helped the case for why they shouldn't be paid for the service.

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