When it comes to cal­cu­lat­ing me­dia spend, the ele­phant in the room might just be a mam­moth. And it’s the tra­di­tional me­dia agen­cies that have the most to lose, says John Baker.

New Zealand Marketing - - Contents -

Show me the money, says John Baker.

STOP­PRESS RE­CENTLY pub­lished a story about the ar­rival of Stan­dard Me­dia In­dex (SMI) in New Zealand. As is of­ten the case with the launch of a new prod­uct or ser­vice, the an­nounce­ment came with much hyper­bole, in­clud­ing that it “will de­liver the most com­pre­hen­sive view of New Zealand’s ad­ver­tis­ing mar­ket when it launches”. The ar­ti­cle also ref­er­enced the an­nual ASA num­bers, which are pro­vided by each in­dus­try sec­tor, and the chal­lenges faced by Nielsen’s AIS prod­uct as tra­di­tional me­dia mea­sure­ment strug­gles to adapt to the com­plex­i­ties of me­dia cre­ation, de­ploy­ment and con­sump­tion.

The piece de­scribed the ‘ele­phant in the room’ as di­rect ad­ver­tis­ing, which isn’t cov­ered by SMI. It is true that some me­dia en­joy a much greater pro­por­tion—and grow­ing—of di­rect ad­ver­tis­ing than oth­ers. Mag­a­zines are a case in point and th­ese re­la­tion­ships of­ten cen­tre on ‘con­tent’ part­ner­ships rather than dis­play ad­ver­tis­ing. How­ever, this is an over­sim­pli­fi­ca­tion as mar­ket­ing dol­lars are pro­gres­sively si­phoned out of tra­di­tional me­dia agen­cies by a grow­ing com­mu­nity of so­phis­ti­cated and in­ter­ven­tion­ist mar­keters work­ing with a range of spe­cial­ist ser­vice providers, and me­dia own­ers di­rectly.

In this re­gard it seems to me that SMI’s most use­ful ser­vice will be to mea­sure the long-term de­cline of tra­di­tional me­dia agency share of wal­let and prove that they are like po­lar bears cling­ing to their melt­ing piece of ice. To claim, as SMI has, that the ex­pen­di­ture of 15 me­dia agen­cies in New Zealand will pro­vide a “com­pre­hen­sive view of New Zealand’s ad­ver­tis­ing mar­ket” lacks cred­i­bil­ity. A re­cent con­ver­sa­tion with a se­nior leader of one of New Zealand’s largest me­dia agen­cies sug­gested that be­cause they had seen a dou­ble digit de­cline in mag­a­zine ad­ver­tis­ing spend then that was surely a re­flec­tion of the mar­ket. This is clearly not the case based on the most re­cent ASA fig­ures, which ac­tu­ally showed an in­crease YOY. On top of that, our busi­ness (I do not be­lieve we are unique) gen­er­ates around 20-30 per­cent ad­di­tional client rev­enue from var­i­ous con­tent mar­ket­ing prop­er­ties in ad­di­tion to what is cap­tured in the ASA data and Nielsen’s AIS. And this most cer­tainly won’t make it into SMI. The ex­cep­tion to this will be multi­na­tional ad­ver­tis­ers who have pro­gres­sively with­drawn lo­cal re­source and lo­cal cre­ative. Th­ese ad­ver­tis­ers ap­pear to still largely en­gage with the lo­cal mar­ket based on how skinny the mar­gins can be ne­go­ti­ated with their me­dia agen­cies and a race to the bot­tom in terms of the re­la­tion­ship with me­dia own­ers. I ex­pect SMI will give the mas­ters in Aus­tralia and fur­ther afield a stick with which to whack us with and will place greater pres­sure on the need to change the dated agency com­mis­sion regime. As me­dia own­ers, what are we pay­ing agen­cies for?

De­spite their rhetoric that sug­gests


oth­er­wise, the me­dia agency model is still largely based on trad­ing in tra­di­tional me­dia and the com­modi­ti­sa­tion of it. SMI looks to be a mea­sure of who has been able to screw the me­dia own­ers the hard­est based on cost, not ef­fec­tive­ness, ideas or even value. Given the rather two-di­men­sional na­ture of this dy­namic it is no sur­prise that the si­los and tra­di­tional de­mar­ca­tions that have de­fined the me­dia mar­ket are col­laps­ing as mar­keters ex­plore other, more ef­fec­tive op­tions.

The de­scrip­tor ‘tra­di­tional’ has been used a great deal over the last few years, par­tic­u­larly fol­low­ing the de­vel­op­ment of dig­i­tal chan­nels. And it’s largely been used neg­a­tively to sug­gest that ‘old me­dia’ will strug­gle to adapt and sur­vive. I don’t be­lieve there is such a thing as tra­di­tional me­dia. There is just me­dia and pro­gres­sively the distinctions be­tween earned and owned me­dia are di­min­ish­ing, along with the weight given to paid me­dia by mar­keters. It is this trend that makes the cur­rent crop of mea­sure­ment tools anachro­nis­tic and in that re­gard SMI seems equally so. The opin­ions ex­pressed here are the au­thor’s own and not nec­es­sar­ily those of the MPA.

Writ­ten by JOHN BAKER Baker is a publisher at Tan­gi­ble Me­dia and chair of the Mag­a­zine Pub­lish­ers’ As­so­ca­tion. john@tan­gi­ble me­

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