4Sight - November issue

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TheONEThing

If you do one thing this week:

Meet with your marketing colleagues and review their advertising plans for 2009. Discuss the overall media requirements with your media agency to ensure they deliver the best possible results for your business from their media owner negotiations.

Important Developments

· Google are making various changes to their Quality Score metric and its Best Practice Funding policy comes to an end at the end of the year. Have you reviewed the potential impact on your business?

· Global adspend predictions are being revised downwards by the large agency groups, with the current economic uncertainty as a cause. Any reduction in spend will affect media prices, so do your current media agency contracts still work for you?

· UK mobile networks appoint IAB as trade body for mobile advertising.

Now is the time to push for improved media value

By Johan Denekamp & Tony Squires

Along with the majority of business sectors, media is going through an interesting and challenging time. Advertisers have less money to spend; the media market continues to change & evolve. Procurement are left in the middle and are expected to pick up the pieces. Through our work with a large number of Global advertisers and our unrivalled understanding of the marketing arena, 4C Associates has put together these few points to help procurement teams make the most of the current opportunities.

The run-up to a new year is a busy time for media agencies, especially this year with the Global financial woes leading to clients wanting (or usually needing) to spend less.

Agencies are desperately trying to understand what their clients want to achieve next year and with what budget, so that they can go ahead and negotiate the most appropriate agency, or more likely agency group, deal.

This is a process that the procurement teams within those client businesses should be paying close attention to, as there are a number of factors that, if managed properly, can deliver value improvements to their media expenditure.

Media deflation is real

A large part of the UK media market is currently deflationary, driven jointly by falling demand and increasing supply. While the latest Bellwether report paints a bleak picture for advertising agencies, with only 8% of companies being more optimistic about the

prospects for their business than 3 months ago, there is a positive side for advertisers, with supply, at least in some areas of the industry, increasing. For example, TV viewing is rising on the back of continued growth in digital channels and circulations have increased in the upmarket end of the national press market – all this contributes to lower cost per thousand, which can only be a good thing. But is it? Your TV campaigns may be over-delivered as your agency spends your entire budget irrespective of the amount of advertising actually needed.

The “digital” effect

One area that, unsurprisingly, is bucking the general media trend is Online. The latest IAB/PWC ad-spend study shows strong double-digit growth in internet display advertising for the first half of the year and although the current financial issues will affect the digital market, it should still see good growth across the back half of the year. This growth in expenditure is matched by a continued growth in the number of websites. While some of these are niche and therefore very targeted and efficient places to put your advertising (hopefully), a large number are not. They may well be cheap, but if they don’t deliver anything, they could well be an expensive part of the campaign.

4 key actions to take NOW

Through our work with advertisers in the UK, we continue to come across contracts that don’t cope well within this current climate. As your agencies are currently putting their requirements and negotiation strategies together, now is the time to ensure you and your marketing colleagues keep ahead of the competition. The following suggestions are a few of the options available:

1. Review your media buying guarantees. If they are based on fixed prices, now would be a good time to update them, or change them to ones based on relative pricing.

2. Review the quality elements of your media buying guarantees. You should at least expect to get your fair share, unless you decide that you would prefer to pay a lower price instead.

3. Review your policy on over-delivery. In the current climate, are you better to have more TV advertising or save the cash?

4. Review the internet sites that appear on your campaign plans, especially those that are part of sales networks. If they are there purely because they make your campaign cost cheaper, ask your marketing colleagues if they are really needed.