Triathlons, Media Agencies and Self-Discipline - Steve Grubbs - MediaBizBloggers

The start of a triathlon race is renowned for the chaos and thrashing of its scores of swimmers. This melee of bodies is so distracting and disorienting for the competitors that the less experienced ones often forget to raise their head every dozen or so strokes and check their direction. Some will invariably wander well off course… wasting precious time, effort and energy. (And, yes, I speak from personal experience). Media agencies and clients are themselves in chaotic and turbulent waters these days, and they, too, need to lift their heads above the fray, check their bearings, and re-evaluate the direction in which their relationship is moving.

When media departments were spun out from creative agencies to form independent media services companies, their "prime directive" was simple enough: 1) Provide improved media services for clients, and 2) Grow revenues and profits. These two goals operated in concertwith each other. Whichever agencies could demonstrate superior capabilities would capture new business and enjoy greater financial reward. There was strong incentive for agencies to upgrade the quality of their service offerings in this ecosystem, and all aspects of media agency performance steadily improved… the strategic thinking of the planners, the metrics and analytics of research units, and the creativity of the buying units. Revenues and profits also improved… at least for a while.

Then the bottom fell out of the financial markets, agencies became distracted, and some started swimming furiously in the wrong direction. Worse yet for the media and agency business, their prime directives began operatingin conflict rather than harmony, and this created great turbulence in the client/agency relationship.

The seeds for this were first sown with the commoditization of the media agency business. Several years ago some agencies that were not so successful in their new business efforts began undercutting their competitors with lower fees and commissions. Those competitor agencies reacted quickly by lowering their rates. Soon, the entire marketing community was either re-negotiating their media agency contracts or conducting full-fledged media reviews. Then, the procurementists, licking their chops, descended on the media agencies, further attacking the agency fee structure AND demanding media pricing rollbacks and media deal re-negotiation. And all this has happened in the midst of a digital media revolution which requires more agency strategic thinking than ever before… and more agency man-power.

Here's the point. Marketers hire media agencies (fees aside) because they want the advice and counsel of the senior most agency leaders. They want the agency's best and brightest committed to helping them achieve their media, marketing and business objectives.

Here's the dilemma. The agencies best and brightest are spending virtually all their time a) pitching new business, b) defending existing business, and c) placating the procurementists.More recently, agency leaders have been focused on another endeavor…d) developing new revenue streams through DSP's, trading desks and other means to grow their depleted top-lines. I applaud them for this and clients should, too, provided everything happens with full disclosure.

But now we're a long way from the original "prime directives". If I'm a marketer, I don't want my agency distracted and spending their time on various endeavors that don't help drive my business.

Clients and Agencies need to make some course corrections with their relationship. Agencies need to re-affirm their dedication to client service and re-double their efforts to provide tools that build value for their clients and differentiate themselves from their competitors. Simultaneously, they need to demonstrate more discipline and begin doing what they should have done a while ago… and just say, "No". Say, "No" when your client wants a full-blown media review, because you're not going to win it anyway. Re-negotiate the fee (if that is the purpose of the review) or fire them. Say, "No" to participating in every major media pitch, unless you put your odds of winning at 50/50 or better. If six agencies are invited to a pitch, four of them are being used. Either negotiate with or say, "No" to the procurementists,but DO NOT commit hundreds of man-hours to educate and support them to the detriment of servicing that client.

And clients need to determine what kind of services they require from an agency and the nature of the relationship with that agency. Given the growing complexity and importance of the media business, clients need their agencies focused on delivering superior services, expertise and results. Eliminate the distractions for them. Pay them a fair price for their services. Given the impracticality of increasing fees, support their efforts to generate revenue through other means.

Back to the triathlon analogy… it's time to lift your heads out of the fray and check your course. If we all spend too much time, effort and energy swimming in the wrong direction, we'll never finish the race.

Steve Grubbs is President and founder of Second Act Media consultancy. Second Act Media is an advisor to companies working in the media, marketing, entertainment and sports industries. Steve can be reached at steve.grubbs@secondactmedia.com.

Read all Steve’s MediaBizBloggers commentaries at My Second Act.

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