Training: The media skills gap

The increasingly complex media landscape has led to marketers being urged to educate themselves in the vital art of trading, reports Robert Gray

Media trading is a difficult area to understand fully and excel in. If it weren't, the industry would never have seen the birth of media specialists and their subsequent dominance of the media planning and buying market. The old model of a market served exclusively by full-service creative agencies, with media capabilities bolted on, would still hold sway.

Of course, the broad media landscape has changed out of all recognition in recent years. Multi-channel TV, the explosion of radio, the birth of online and a series of other developments have massively increased the number of media outlets vying for the advertiser's budget.

Change has been just as momentous at long-established media organisations.

The most notable example here is the Carlton-Granada merger, which has created a consolidated ITV, with 52% of the commercial television market.

To protect the market and ensure that the new-look ITV does not derive too much of an unfair advantage as a result of its sheer size, a complicated set of rights for advertisers and media buyers was introduced.

This package of rights, known as Contract Rights Renewal (CRR), has been designed to ensure that advertisers and media buyers are not disadvantaged due to the scale of the consolidated ITV. But there have been concerns that CRR is not offering the protection originally promised.

A particular worry is that, in the eventuality of clients switching media agency, they may not be able to take their existing ITV advertising terms with them, let alone seek improved ones.

Earlier this year, Boots and Churchill Insurance were embroiled in a dispute with ITV over their new agency MediaCom's efforts to secure better terms.

Media buying is all about hard negotiation and delicate, fluid balances of power. The vast majority of clients find it extremely difficult to keep track of developments in the media scene, are baffled by the complexities of issues such as CRR and prefer to devolve responsibility for almost everything in this respect to their media agencies.

As a fail-safe measure, many clients have turned to specialist media auditing companies, such as Billetts and Media Audits, and given them the task of making sure that their media agencies are delivering value for money. But media auditing only goes so far. Are some clients being negligent in not having sufficient trading knowledge in-house?

'If you asked most clients to explain in 100 words what CRR was all about, they wouldn't be able to do it,' says BT head of media operations and trading Steve Huddleston. 'They don't understand what they're getting from the agency deal.'

BT is unusual among advertisers in having a five-strong media unit, whose members all have media-agency experience. Its significant ad budget - about £96m, making it the UK's third-biggest ad spender - and the fact that it has six media agencies on its roster, allows it to justify investment on this scale. However, Huddleston confesses that he finds it amazing that many of the top 100 advertisers do not have even a solitary dedicated media person in-house.

Woolworths head of marketing communications Mark Trinder, who is also chair of ISBA's TV Action Group, concedes the fast-evolving media marketplace can appear 'unbelievably complicated' to uninformed advertisers. 'Agencies and media companies and ISBA and other bodies need to do something to make it less intimidating,' he argues. 'A lot of people think: "Oh my God. I won't be able to get my head around this - and I don't have time to." CRR is an unknown quantity for a lot of people. There's an education requirement and there's a series of bodies that should be doing it.'

Trinder's gut-feeling is that there has been a decline in the number of 'media-literate' advertisers in recent years. This problem needs to be addressed - both at an individual client level and also more broadly by the marketing industry.

As things stand, there is a dearth of courses aimed at educating clients about the ins and outs of media trading. To their credit, a lot of media agencies, and even some media owners, go out of their way educate clients on media issues. This is to be encouraged. But there are too few examples of education in this area overseen by objective, independent bodies. And, to be fair, there is probably not enough clamour from advertisers for educational opportunities of this type.

Knowledge is power

The Advertising Association runs a highly-regarded annual course on media business, while the Radio Advertising Bureau (RAB) also runs media-focused courses for advertisers. 'The opportunity for advertisers is to encourage creative planning,' says RAB media planning director Peter Cory. 'You need confidence in the process to approve challenging strategies.'

The Outdoor Advertising Association does not run media-trading courses as yet, but its operations director Bill Wilson agrees it is a good idea and does not rule it out as a possibility for the future. 'If someone set up a template one year, that would be the hard part; after that you could follow it. I do think clients should be there as they should take an interest in where their money is spent.'

Huddleston is all in favour of media agencies making a healthy margin on BT's business. But he feels transparency is important. Advertisers should, he argues, have a clear idea of the rate at which their agencies buy media, and the rate at which it is subsequently sold on to the client.

'You don't want the worry that you are on GMTV because it is giving a 20% commission or that you are spending a lot on posters because there is a big kickback for the agency.'

Media trading is rife with complex issues the finer details of which are hard for many time-challenged marketers to understand. Media agencies negotiate group deals with the media owners, pooling their clients' spend to secure juicy discounts due to the scale of their purchase. That much is clear.

Trading places

The picture is cloudier in situations such as the CRR. Although in principle CRR enshrines the advertisers' right to move their ITV account from one agency to another, ITV can nonetheless block a move into another agency's group deal when it is overtraded - which is to say it risks selling more advertising space than it actually has at its disposal. An agency can refer the matter to Ofcom's adjudicator if its feels that is not genuinely overtraded or is not offering fair and reasonable terms, as it is obliged to do.

However, in some situations, rather than rocking the boat by referring the matter for adjudication, some agencies may prefer to start horse-trading with ITV to secure their new client the terms it was promised. The upshot could be that other clients may be disadvantaged. Having a firm grasp on issues such as this is useful to clients, to say the least.

In Huddleston's view, many media agency chiefs believe clients should be more involved in the media-trading process. They want to be challenged so that their businesses can give their best. But that can only occur when clients are well-informed enough about the broad media landscape to develop trenchant views that are shaped by the reality of the situation.

Huddleston is damning of those clients that fail to pay close enough attention to their media planning and buying. 'How on earth do you expect to understand your TV deals or channel mix if all you have is someone who has two hours a week to devote to media? Anybody spending £5m to £10m a year or more on media should have someone in-house with half a clue.'

The gauntlet has been thrown down. Too few advertisers truly understand media trading in sufficient depth. More training and in-house specialisation is called for. The question is, will clients be able to muster both the will and the budget to address these shortcomings?

THE ADVERTISER

Bernard Balderston Associate director, UK and Irish media, Procter & Gamble

'Some of the bigger clients have gone to the trouble of bringing dedicated media people in-house. It is tough for small- to medium-sized clients to know what to do. Where you are spending a significant amount of money in business - whether on raw materials or media - you need to be aware of what is happening. A lot of clients who do not know much about how agencies work have come to rely on auditors. But there's nothing like having a bit of knowledge, because if you aren't careful you become too reliant on third parties.'

THE MEDIA AGENCY

Nick Lawson Joint managing director, MediaCom

'The media budget is, in almost all cases, the biggest part of a marketer's expenditure, so understanding how it is being spent is vital. Admittedly it's complex, but that's all the more reason to get to grips with it. We want clients to understand how we're spending their money, and why we make the decisions we do. It's important because it makes them better able to distinguish between different agency offerings, and for existing clients it means they appreciate our work. That's why we offer clients as much media training as we do, with ongoing communication on key topics.'

THE MEDIA OWNER

Graham Duff Managing director, ITV Sales

'Many clients outsource their media to the greatest extent - "we pay the media agency to do that". There is a greater tendency to outsource and involve a media auditor or consultant. How much clients need to know and understand is a question for them. There's too much focus on the mechanics, such as Contract Rights Renewal. This jargon can get in the way of how TV advertising works. Of all the media purchases an advertiser makes, TV is the most accountable. The data is good and easy to audit, but for advertisers to take more direct interest is a good thing.'

MEDIA TRADING - WHERE TO LEARN

As yet, there are no courses focusing specifically on the complexities of CRR and related trading matters. However, a handful of useful media courses do exist, among them: The Advertising Association runs an annual media business course in Brighton, which is extremely highly regarded. However, it tends to attract a far higher proportion of media owners and agencies than clients.

The Radio Advertising Bureau offers courses on Understanding Radio Advertising and Understanding Sponsorship and Promotions.

Posterscope runs an annual course on poster-buying attended by both media buyers and clients.

Channel 4 is arguably the most proactive broadcaster, running a regular series of media workshops.

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