6 Best Advices for Mastering Advertising Media Procurement

Media Procurement

Sep 24, 2021 | Philippe Dominois

6 Best Advices for Mastering Advertising Media Procurement
In an environment undergoing continual transformation, many companies are searching for new ways to assess, increase, and monitor the efficiency and effectiveness of their marketing, advertising, and media budgets. To achieve these ambitions, companies need to make the right choices about what they buy, how they buy, and whom they work with. Those choices aren’t easy. So here are the best 6 best advices for mastering advertising media procurement:

1. Learn About Advertising Media Best Practice

Increased complexity has enabled media agencies to create opaque financial structures and then inflate their fees and media prices at will, while many advertisers are stuck behind contracts unfit for modern media buying that provide little scope for transparency and accountability. Not knowing media management best practices is what makes the difference between a best-in-class advertiser (with full transparency, competitive prices, and effective media planning) and an advertiser who relies to much on their media agency (and most likely gets the worse media inventory, at a premium price, without getting any or very little cash rebates).


2. Understand How Media Is Traded

Due to media agency consolidation, we now have over 76% of the total global media expenditure which is bought through 6 media agency groups. These huge media buying groups have created a new model for media buying, which rewards savvy advertisers and penalises the less knowledgeable advertisers. And the difference between the two ends of the spectrum is significant. Understanding how media is traded will allow you to get the best out of your media agencies.

3. Know How To Achieve Full Media Transparency

You might have heard of the media transparency issue, where media agencies receive undisclosed rebates from media owners, and media funds are used as "principal" to resell media inventory to advertisers with undisclosed markups. We see a lot of our clients coming to us, having been told by their media agencies that their cash rebates were already included in their media prices. This is a decoy. Don't be fooled. Or you might be receiving only a fraction of what you are owed back. Knowing how to achieve full media transparency will bring financial benefits but also will improve trust between yourself and your media agencies.


4. Use Best-In-Class Media Agency Contracts

A lot of issues we uncover with our clients are linked back to their media agency contracts. If you do not have a best-in-class media agency contracts, you might not be eligible for cash rebates, you won't be able to obtain competitive media prices, and you might not be able to get compensation for under-delivery or poor media planning. Signing a contract which has been drafted by your media agency is not best practice. Most likely, the terms and conditions are there to benefit their interests, not yours.


5. Set Up A Media Agency Remuneration Model With A Bonus & Malus Mechanism

Media agencies need to be remunerated fairly for their work. In return, you need a transparent media agency remuneration model, where you can see exactly how much profit your media agency will make by servicing your business. This means having a remuneration model with a bonus and malus mechanism. The bonus should only be obtain for delivering above and beyond your agreed expectations. The malus is there to penalise your media agency for delivering on their commitments and underperforming. Without such a scheme, we tend to see media agencies underperforming and being remunerated more than average.


6. Don't Hesitate To Get External Help To Deliver Improvement Fast

Procurement has tremendous potential to add value in the world of advertising media, but if not managed properly, has a tremendous potential to cause harm. Having the right skills is what makes the difference. If you don't believe you have the right set of skills internally, we would recommend acquiring these skills via outside media experts. They will allow you to get the best possible results, and much faster.


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