That’s the diagnosis for what’s ailing the relationship between clients and media agencies today.
So said Marc Goldstein, North American CEO of WPP’s GroupM, during a presentation today at the opening session of the American Association of Advertising Agencies’ Transformation Conference in San Francisco.
On one hand, clients want brilliant, cutting-edge strategic work that will help them best match their brands to the right consumer segments. Alas, they want to pay very little for the service.
“Doesn’t this condition reflect what’s happening in our world today?” Goldstein asked attendees rhetorically. “How many times have you had a conversation with a client about saving money, lowering their CPMs and changing the mix of elements or programs, all with the objective of getting better pricing for the same thing? And how many times have you had a conversation five minutes later with a brand manager at the same company about the special opportunities, a branded content play, a tie-in with a network series,” or other out-of-the-box implementation, but which involves paying a premium price?
Far too often in recent years, said Goldstein, media planning and buying reviews have started off with a balance of strategic and implementation goals, “only to have it devolve into [a process] almost completely focused on the price.”
How to resolve the conflicting goals of brand managers and procurement teams may be “the biggest challenge and in some ways the greatest threat to the future of media agencies,” said Goldstein, who will soon step down from both his GroupM role and as chairman of the 4A’s Media Policy Committee after serving three consecutive terms.
One possible solution: redefine the benchmarks by which the industry does business, Goldstein said. And technology — specifically techniques that enable targeted TV ads — should help, because they will enable advertisers to more efficiently reach target audiences for their brands with much less waste. Addressable technology, he said would allow a marketer, for example, to reach the more precise target of adults 25 to 54 in homes with incomes of $125,000 for a total cost that is 40 percent less than it would be to simply target the entire 25-54 demographic.
“The availability of data and the pace of technology that allows us to utilize this in our decision making is changing the game,” Goldstein said. “The choices cannot be governed by the old rules of age, sex, demographic and age/sex efficiency.”
Another big hurdle: communicating more effectively to clients the value that media shops bring to the table. “The fact is there are some clients who still think of us as media planners and buyers and that’s all,” he said, instead of acknowledging the broader role involved in providing expert consumer research and insights, econometric and market mix modeling, branded content and related production expertise and other disciplines. “The strategic planning that we do is not simply putting Xs in boxes on a flowchart and enjoying three-martini lunches.”
“It’s not all about price,” Goldstein stressed. “It’s about the combination of smart and strategic planning with smart and strategic implementation. . . . The priorities of our business and the rules that have governed our actions have changed, and so must the benchmarks we use to calculate our success or measure our shortcomings.”