Nokia, Reckitt Benckiser, Unilever, Hyundai Kia and Vodafone are just a few of the big media pitches that have kept regional offices busy.
The pitches are mounting up and the pressure growing. There’s no doubt that these reviews are becoming increasingly attractive to many of the biggest media spenders.
The pitches are mounting up and the pressure growing. There’s no doubt that these reviews are becoming increasingly attractive to many of the biggest media spenders.
But, for all the gruelling work that goes into preparing and managing these pitches (at the client and agency), are these global reviews really good for business? Does consolidating multi-market accounts under one roof produce the best results? Clearly, not every client can pull it off; few have the brand portfolio, appropriate internal resources and structures to derive the full benefits from this type of consolidation.
But even when they do, consolidation isn’t always the answer. A global arrangement might be compelling financially and structurally - especially when overall costs play a significant role, which they certainly appear to be doing in the recent round of pitches.
But, invariably, agency networks vary in terms of strength in different parts of the world. It’s rare for one agency to deliver consistent value across one region, never mind globally. All networks, and this is true beyond media, have markets or even regions where they are incredibly strong and other areas that are patchy.
Of course, for a client sitting in New York it may be difficult to get a true sense of this. And, so, quite often, global alignments are broken down as clients in local markets, or their joint venture partners, stand their ground and local decisions override global orders. Vodafone may yet turn out to be the latest case of this, as Maxus fights to keep hold of the India business, despite the brand’s global alliance with OMD.
But perhaps the biggest frustration for media executives is that cheap price is the underlying factor in most of these massive reviews. Admittedly, the drive towards commoditisation is being exaggerated by the recession. But are some clients taking advantage of it, as media bosses would suggest?
Well, if they are, who can blame them when media agencies themselves are committing to brutal terms to win or hold on to new business.
We’ve all heard the anecdotes of agencies willing to work for little immediate return - other than building share or strenghtening a relationship with a client that has an account with the same network. In some cases, it appears that agencies don’t want to be seen to be losing a big-billings client, even it would seem at the expense of it being unprofitable.
So, if agencies are willing to participate, can they really complain when clients attempt to beat them down on cost?
Perhaps not, but it’s a dangerous game to be playing - particularly at a time when good media thinking and ideas should be the key differentiator between success and failure.
Got a View?
Email Atifa.silk@media.asia
This article was originally published in 10 September 2009 issue of Media.
