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Apr
17
Media Sales and the Agency
Filed Under Advertising, Digital Signage
Really interesting commentary on Ad Age by the ex-leader of Young & Rubicam (a WPP company - $1.4 Billion in Agency sales in 2005)
This is relevant to Digital Signage only in that it will become a big part of our industry going forward. Ed Ney is basically calling for the end to Agency Commissions on media (agency makes 15%). His comment was that the agencies rarely keep the commissions anyway and give them back to their clients and that it just inflates the total media sales numbers unnecessarily.
The main points that struck me were :
Agencies aren’t putting their major firepower behind advertising anyway. The big holding companies now get less than 50% of their income from ad agencies. Design companies, direct-response firms, digital initiatives are where the money is today.
The other one, from the author, that made me smile because I think anyone selling media on Digital Signage can relate was:
if agencies did get to pocket the 15%, maybe they wouldn’t beat up the media so unmercifully on rates, and the ad-sales figures wouldn’t be such a work of fiction.
The full article is here: http://adage.com/columns//article?article_id=116066
Funny enough, it relates quite closely to something that Chief Creative Officer of Coca-Cola said in Italy:
“Force us to do things differently. You need to create new things and to push us. We are stuck in our ways boy, oh boy.”
Although I smile when I hear that too as if a street level media buyer takes that advice to heart and the strategy fails, he’s likely looking for a new job.
But if you listen to the Media Agency “Heads”, they’re showing some progression. From the CEO of Aegis Media ($1.6 Billion in global revenue last year):
“Clients are not that happy with [media agencies’] current rate of progress. We are scared, and we focus on cost and not value.” He stressed the need to maintain specialists in agencies in order to drive innovation for the future.
It’s a fantastic read. The whole thing is here:
http://adage.com/mediaworks/article?article_id=116122
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