Media Agencies Ready to Rumble for ROI

For marketers, 2009 may be a year of experimentation and changing channels. At the very least they will be thinking hard about shifting dollars to different ad platforms where there could be a better return on investment during the recession.At media shops, job one will be helping clients navigate those moves as they fly into the economic turbulence. ROI pressures have never been stronger, according to media agency executives, and shops will redouble efforts to develop new offerings and metrics that provide greater return on client expenditures.Certainly the year is going to follow one of rapidly softening spending.According to Interpublic's Magna, U.S. media spending fell to an estimated $270.8 billion in 2008, from $279.6 billion in 2007. Globally, the total rose a meager 0.5 percent to reach $642.8 billion in 2008."All clients are asking how soft is soft and what does it mean for them," said Initiative U.S. president Tim Spengler. "We're encouraging our clients to start with a blank slate and question everything. This environment could actually provide the ability for more innovation and opportunities to do the never-been-done before. It's a time to take advantage of media companies' willingness to try different things or models that maybe they wouldn't do in stronger markets."Executives at other shops agreed. "This is an environment where no one knows what is going to happen when you wake up tomorrow," said Alan Cohen, CEO, Omnicom's OMD U.S., who also anticipates that clients will be reshuffling their platform mixes next year in a bid for greater return and efficiencies. "You can't sit still in a sea change environment." And clients that try to use the same media plan to launch a new product that they used just a short time ago will likely founder: "Things are changing too quickly," Cohen said.Flexibility is key, said Bill Koenigsberg, founder and CEO of independent media agency Horizon. "That's what I am preaching internally-in the marketplace, in the deals we negotiate, with our staffing levels and in our ability to move quickly in any direction."Bill Tucker, CEO, Publicis Groupe's MediaVest agreed, adding that a certain amount of risk taking may also be in order. "Clients need to be daring in terms of following the consumers," he said. "Content and messaging has to remain relevant and they're going to need different communications during the recession. Sometimes it is much riskier not to take some chances than it is to take a chance." Opportunities are likely to present themselves in the down economy to "get great things done," Tucker said.Channels and platforms that stand to gain client support in the coming year? "Targeted more efficient forms will be the gainers," said Spengler, which translates more specifically to cable and digital. But that's not to denigrate network TV, he cautioned. "I think there is value in big events, but the question that has to be asked is, what is big event mass media and what isn't but says it is and charges you for it?" he said.As far as traditional media is concerned, "unfortunately there won't be a lot of winners this year," said Koenigsberg. "But I think that tier one cable networks have an opportunity to be winners," given the travails of local media currently and continuing audience declines for network television. That said, "we're getting an awful lot of questions about whether to re-express dollars placed in the upfront," for both broadcast and cable.Those questions will continue well into the new year. Increasingly, said Initiative's Spengler, clients are "reticent to commit long term" with regard to spending. "Unless the pricing gets really reasonable a lot of money will be sitting out of annual deals," he added.Media shops are also trying to position themselves as strategic consiglieres to their clients. "We want to own the strategy conversation" says OMD's Cohen, which he says makes areas like competitive business intelligence, analytics and consumer insights critical going forward. "Everybody's job is getting more complex and the agencies that survive will be the ones that understand marketers' brands and how to reach consumers with plans designed to drive sales with the ability to prove what you're doing is smart and works."To that end, OMD is testing a new offering called OMDPro (as in "proactive") with one client that offers a mix of competitive business intelligence, consulting, pop culture trendspotting and new techniques for using both emerging and traditional media. Cohen declined to name the client, but sources said it is Dial, a unit of Henkel Corp. "We want to be like the CIA for our clients," he said. Media shops have to be seen as an extension of their clients' marketing departments, he said. Otherwise, "we're not doing something right."Tucker agreed, asserting that clients want more guidance than ever from their media agencies "through these times because of the amount of money involved."Two capabilities that may get more attention this year than in the past, he said, are shopper marketing and gaming. The first is particularly relevant to the packaged-goods sector where clients are "trying to stay as close to the consumer as possible," and influencing them at the point of purchase is crucial."It has to start with the consumer," Tucker said of overall client strategies. And during a recession consumers stay home more.Thus, gaming should gain traction. Despite some issues with the medium, overall levels of television usage should remain stable and part of the media mix for many clients, he said.

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Media Agencies Ready to Rumble for ROI

Steve Mcclellan

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