The report suggested many media agencies are buying media that does not align with their clients’ strategies, and follows warnings by UK trade body ISBA about a lack of transparency in advertising media buying. All of these issues compel procurement departments to improve communication with their agencies and ensure they are getting a better deal on behalf of their brands.
But too often, good procurement professionals have approached the advertising media space with the same techniques as for traditional goods and services. After much diligent work, some think they succeed... but it is an illusion.
So here are the top 4 benefits of learning advertising media best practices, based on over 20 years of media auditing and consulting assignments with some of the biggest global brands.
1. Unlock Significant Media Savings
Delivering advertising media savings can be a very dangerous exercise. Done badly, and you will do more harm than good to your business. Truely understanding how media is traded is essential here. Otherwise, you could get the illusion of getting savings, where in fact, you are getting cheaper and therefore less effective media. What you want is to get the most effective media inventory in order reach your media objectives at the most competitive price.
2. Achieve Full Media Transparency & Get All Your Cash Rebates Back
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.
3. Improved Relationship With Marketers
Things can sometimes get awkward between Procurement and Marketing. We have heard many times CMOs complaining that Procurement do not understand marketing. And there are some who believe that Procurement should go away. PepsiCo even scrapped its marketing procurement department in 2015. But with the right knowledge, mindset, metrics, Procurement can achieve amazing results without compromising on Marketing's requirements.
4. Improved Relationship With Media Agencies
Media agencies are very smart in dealing with Procurement professionals. As reported in the industry trade press (Digiday, April 2018), some media agencies have a traffic-light system to determine how knowledgeable the procurement teams are, which in turn help them determine how much margin they can make. With knowledge of advertising media best practices, media agencies will know that they can't game your procurement process, which will eventually lead to a more respectful and improved working relationship.