With $3.2bn media spend across the Middle East region in 2005 the advertisers paying the bill will continue to look for more accountability and transparency from the media agencies who are spending the money. The Sarbanes-Oxley momentum, initiated 3 years ago by US shareholders, is increasingly putting pressure on companies to achieve more clarity in their media dealings globally. But share-holder responsibility is only one side of the story.
The reality is that advertisers, marketing and procurement, rarely know how to approach this difficult issue - let alone engage in a constructive discussion with their media buying agency group. This especially applies when they are asked to solve these issues in a foreign region over 7,000 miles away (with different media trading dynamics and local customs and practices).
Advertisers are worried
In a recent research project conducted by EMM amongst senior global media and marketing professionals - representing over $10bn media spend - it was made clear that advertisers are increasingly concerned about the transformation of the media landscape. Amongst the key worries were:
Consolidation
Mergers, acquisitions and consolidations have left advertisers with little choice when it comes to selecting a media buying agency: currently over 80% of all media spend goes through just six media buying groups across the world.
Considering this trend from a Middle East perspective, where the market is already dominated by a few very powerful media owners, it means that more and more money will be going through fewer pairs of hands. In such circumstances, selecting the right media agency and measuring its performance becomes more important than ever, regardless of the size of the media budget involved.
Transparency
Advertisers have an instinctive mistrust of agency consolidation - mainly because they become a smaller part of a bigger picture, and therefore less important as individuals.
But EMM's research also confirmed that advertisers feel that their media agencies are increasingly manoeuvring them into opaque media owner deals, rather than doing what is best for their clients.
Most advertisers agree however that the pressure they have exerted on agencies for lower fees/commissions has inadvertently forced agencies to subsidise conventional income from other sources. This being the case, advertisers should sort out their contract and fee arrangements, and clarify policy on client conflict, before becoming indignant about deals that agencies seem to be making.
Lack of talent
Media remains a people business, especially in the Middle East. Our research showed that most advertisers are alarmed at what they perceive as the talent gap between senior and mid-level agency staff: ‘Talent spread too thinly, narrower focus, greater specialisation and less real training and experience to deal with my commercial issues' were some of the main worries expressed.
The role of the media management consultant
Many marketing managers still employ external consultants with the intention of showing their bosses that they have helped identify and deliver improved cost efficiencies (and perhaps ensuring a well-deserved year-end-bonus).
Given the associated cost savings and improved company performance, it is easy to see why more and more companies in the Middle East are looking to external consultants to help them manage and optimise their media operations.
But the reason for hiring an external consultant differs depending on the region you are in. In my experience, companies in the Middle East often take on consultants because they are the all-around satisfactory and acceptable solution to all parties i.e. advertisers, agencies, media owners, Sarbanes-Oxley and shareholders. Furthermore, from a marketing manager's point of view, using external help to generate media savings sits well with most international companies' HQs' objectives of cutting costs - and the savings are certainly welcomed by procurement!
Recommendation to advertisers
There is no doubt that Middle East advertisers want things done the Middle East way; but we can be equally sure that global advertisers (probably situated in a distant country) will continue to demand increased media transparency and accountability, and in some way have their say about how the market evolves.
My advice to clients who wish to engage in a drive towards becoming a smarter and more accountable advertiser is to consider which approach would generate the most benefits in short and mid term, remembering that having the support of an independent team of experts - committed to constructive observation and solutions - is a valuable service not only for advertisers, but also for their agencies.
Most advertisers do not have sufficient in-house knowledge and capability to effectively deal with the media management issues, particularly when it involves their own people who may have unwittingly sanctioned many of these malpractices.
Author Resource:-
EMM, one of the world's top media management companies, has a full range of Media Management services from Media Auditing to Media agency selection and specialist Pitch Management solutions
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