This is a free excerpt from the AdNews Monthly print magazine cover feature. Over the course of May we will serialise the feature into bite-sized chunks. To read the full article now download a digital version of AdNews or subscribe to the premium print edition here. You can also see this topic, and more within the Transparency issue debated at AdNews Live! Tackling Transparency.
How to improve pitching
One way to help provide greater transparency to the pitching process and “level the playing field” is to set industry standards to help inform clients and marketers what they should expect to pay media agencies in terms of costs and margins. One media buyer told AdNews they would like to see the AANA and MFA release salary benchmarks for each role, details about appropriate overhead recovery, and profit margins.
“Then it would come down to how well you develop media strategy, buy, and optimise media to deliver on client business outcomes. Some of the profit margin could be put at risk in the event of under-delivery, but there should also be an agency upside and bonus incentives for over-delivery,” an agency head said.
“The challenge is getting agencies to stick to it and my suspicion is that they will continue to undercut each other to win business.”
Virginia Hyland, CEO of Hyland Media, told AdNews agencies needed to “put a stake in the ground. They have to be able to push back on global pressures to say ‘this is the value I am adding to your business.”
“We are just going to the lowest common denominator in terms of cost, No agency is pushing back on marketers explaining the differences in the quality of people.”
Woolley believes the remuneration model should ensure there is a fair and reasonable amount of base and that there are performance-based incentives which allow the agency to share in the success of a client.
“Procurement needs to turn the focus away from cost reduction and towards improved productivity and results. It doesn’t matter if it’s sales or leads or brand health – whatever the metric is they’ve agreed with their CEO is the measure of marketing value,” Woolley said.
Check out the entire Transparency Series here.
You can hear these subjects tackled at the AdNews Live! Tackling Transparency event on 27 June. Tickets are now on sale. Speakers include Tim Egan, regional product marketing manager at Facebook and Tony Bell, national digital sales director at The Guardian Australia. More to be announced this week. Early Bird discounted tickets are available until 26 May. Buy tickets now.
This article is part of a series on transparency which originally appeared in AdNews in print.
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