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Trendsetters: John Billett Issues a Stern Warning to Global Marketers about Media Agency Management
John Billett, now Chairman of ID Comms, has a long history in the advertising industry in the UK and throughout the world. He also enjoys a well-deserved reputation for being both a creative media thinker and challenger to convention. Most people know him from the creation of Billett's-- launched as an alternative and distinctive media auditing business, which grew to have offices across Europe, and then expanded to bring media auditing practices to the US.
In his autumn address to the Worshipful Company of Marketors in London—a Livery Company, or trade guild within the City of London that promotes Marketing as a force for economic and public benefit--he talks about how media agencies came about, how they grew so quickly and where they find themselves today. Plus, he outlines the dramatic impact for marketers and how they may have lost control of their media.
In the opening of his address, he says, "I have never shied away from the opportunity to challenge existing operations, especially when current practice has failed to keep pace with opportunities to get better financial returns from an investment. My media evaluation and performance measurement business was never designed to make enemies, but if along the way we helped advertisers, but upset some agency suppliers, that was an acceptable price to pay.
Tonight I want to update you on the major trends and changes taking place in the trading of media activity between advertisers and media vendors via agencies. I will suggest that far too many advertisers are currently being financially and operationally disadvantaged by being not fully aware, and in some case just disinterested about the way in which their marketing resources are being expended.
And I shall conclude with observations and recommendations on what I see as the best actions to take to protect your best interests.”
He outlines how the fundamental change taking place across the marketing services business is that the agencies, who for a long time were the agents working on behalf of advertisers acting as custodians of the advertisers' best interests, have now become the media owners. He adds, "An alternative title for this lecture ‘The Agencies have become the Media Owners' could be ‘The Lunatics have taken over the Asylum.'”
Here are a few key highlights from his address:
"The fundamental change taking place across the marketing services business is that the agencies, who for a long time were the agents working on behalf of advertisers acting as custodians of the advertisers' best interests, have now become the media owners.”
"Faced with declining fees from their advertiser customers, the media agencies, quite understandably have turned their attention to the media owners as sources of additional income.”
"The media agencies now find themselves in a wholly changed environment. Originally charged with protecting advertisers' best interests and being paid by the advertisers accordingly, they now enjoy the considerable majority of their income from the media owners, whilst still vowing to work for advertisers, and now bring to the media owners even more new opportunities.”
"The pace of change and the scale of offering have come as a surprise to many in the business. This is an example of how easily advertisers have become detached from the reality of how their money is being spent.”
"Six media holding companies, most of whom are larger and more influential in media trading than any media owner, now determine who gets what and where and at what price. The media agency has indeed become the media owner when it comes to trading media.”
"Automation is a very hot topic and cross- industry studies show that marketers deploying data driven campaigns can increase efficiency by a third. But the risks are considerable.”
"The media agencies have the scale to exploit this financially across the portfolio of their activities in this fast moving expanding field in which the blurring of boundaries accelerates.”
"Matters have now reached a head of steam where advertisers have now relinquished control. But it is the advertiser who controls the purse strings and now is the time to use that authority.”
"For too long marketers have been lulled into a false sense of security about their media trading. This has allowed media agencies a free hand to operate in their own best interests.”
"The time is right for Marketers to regain control over the way in which they allow third parties to spend their money.”
According to John Billett, 3 Action Points Will Deliver Results:
1. First, start taking seriously the organisation, decision taking and monitoring of your marketing spend. Advertisers must take back control.
No longer can managers leave this to procurement who have demonstrably failed to protect the company's best interests. Appoint an in house expert in governance. Come back the media manager who disappeared in the 1970's/1980's.
2. Second, don't rely on your contract with your media agency to protect your best interests. They no longer control your media inventory.
You must have a contract with their media holding company.
3. Third, establish who are your top 10 media & technology vendors, whether analogue or digital and build direct contact and relationships with them. (It's quiet staggering to realise that most advertisers don't know their vendors). Negotiate your own over-rider contracts with the media. They will welcome this and you will enjoy preferential service.
For too long marketers have been lulled into a false sense of security about their media trading. This has allowed media agencies a free hand
to operate in their own best interests.
Sadly that working method is broken.
Advertisers have to regain control over the way their own money is spent.
To download the full speech, click here
John Billett started in the ad agency business in 1966 and continues as an active participant in media and marketing communications today. Working first in the Unilever Media Department and then in a top10 advertising agency, he became the industry's first media agency media director under the age of 30.
Later, his own company, Billett's, was founded on media evaluation, as well as marketing effectiveness validation. Under his chairmanship, the company grew to become the largest benchmarking media business worldwide.
He sold the company in 2007, and it now continues as the rebranded Ebiquity. Today he serves as the Chairman of ID Comms, a value-based media consulting company which provides first-class media expertise, consulting and resources to brands. Neither an auditor nor accounting firm, ID Comms has the freedom to consider the value of communications-- not just the price.