Buyer Beware: The Media Proposal With The Lowest Fees Is Not Always The Best Proposal

If the C-suite doesn’t understand the value of digital, can we really blame them? 

They see huge chunks of their budgets going to agency fees, media, and creative teams, but they don’t see a proportionate bump in sales. This issue is compounded by agencies delivering metrics that don’t tie KPIs to business goals. 

Executives don’t care how many Facebook followers their product page has if those fans aren’t opening their wallets. They don’t care about the high engagement rate the new creative has if it’s not measurably boosting sales.  

While those executives aren’t wrong, they’re also not being granted a fully transparent view of what goes into planning and executing a campaign. It’s not that they want (or need) to see every task assigned in the campaign plan, but we should show them more than the flashy creative if we’re trying to prove value. We need to educate them on how media planning and buying factor into campaign success. 



Of course, some agencies aren’t likely to do that, since most of them don’t do that work in-house -- even though it can literally make or break the success of any campaign. Media buyers don’t need to dazzle clients at pitch meetings--this is work the big shops relegate to junior staff or outsource entirely. 

But, in the vein of “nobody ever got fired for hiring IBM,” major brands are not about to leave their big-name agency for a smaller, lesser-known shop. Clients need to know how important the work of media buying and planning is, and who should be handling it. 

Place a higher value on media buying and planning. 

Media planning and buying is the heart of any successful digital campaign, but its value is tremendously overshadowed by the “sexier” creative and strategy teams. So, media buying is frequently where big agencies will cut corners, especially when it comes to handing in a lower-ticket, bid-winning proposal. But media planning and buying aren’t commodities. They are essential parts of any campaign that are critical to success. 

So buyer, beware: the proposal offering the lowest fees is not always the best proposal. In fact, a lowball agency proposal should raise all kinds of alarms! There are big agencies that do great work, but there are also common big agency practices that lead to lower pricing, and none of them are good. For Instance: 

  • Many big agencies staff their media teams with lower-paid, junior team members. Sure, the younger team members might have a better grasp of some of the newer social media apps - but they also lack the years of experience that add up to solid business acumen and confident decision-making. When it comes to media buying, you don’t want the “B” team. What if this was your personal retirement account? Would you want the certified, seasoned VP managing your investments - or her intern?
  • Big agencies frequently outsource media.  A review of the top 10 agencies on LinkedIn revealed that less than 8% of their employees had ever had a position in media buying (or a title that reflected a media buying role).  Agencies are notorious for negotiating their media buying commission – and that’s why they are outsourcing that function to other full-service companies. So, while your agency may only be charging you a 5% commission on media they place, you’re probably unaware that a third party is charging an additional 30-60%. When a well-known digital agency went public, the industry was able to see media buying agencies taking 80% margins. It was all there in black and white in their SEC quarterly filings. 
  • Big agencies frequently hand off ad operations to outside partners or put very junior staff on ad ops. This is the foundation of your campaign, and it could be handled by the “greenest” member on the team, or worse, by folks outside the agency entirely.   This is arguably the most important position on your media buying team, as they are the front lines for your data and your optimization efforts.  If the agency doesn’t have senior level experience here, you can assume they have a “set-it-and-forget-it” mentality. 

Of course, this isn’t true of every big agency, but it’s certainly true of some. The choice of partner should not be a decision based entirely on the line in the proposal that shows the agency fees. Digital marketing-- and digital media buying in particular-- cannot be viewed as an expense. It’s an investment in the growth of the business. So, instead of basing the decision on agency fees, maybe brands should be looking more closely at all their agency expenses, and requesting a line in their reporting that demonstrates the ROI their partner agency is delivering each month. 

We need to focus a little less on tech and a little more on people. 

It’s likely that the C-suite protested ad budgets even back in Madison Avenue’s heyday, but they probably felt better seeing their ads on the back cover of Life magazine and on giant billboards along the highway. Today, their funds are going into ads they may not be able see across media that’s controlled by algorithms and AI. 

Maybe they’d feel a little more confident in their digital ad spend if they knew that their media strategy was being managed by seasoned, professional media buyers in addition to AI. It’s a pretty old-school idea, but we do still need humans in the process. 

An experienced media buyer will know whether a placement is going to reach and engage the right audience, whether a particular buy is worth the high cost per engagement, and when and where a campaign should run. AI and machine learning have come a long way and can offer valuable insights into audience targeting but having a knowledgeable person behind the buy – working alongside the AI - means that smart decisions can be made, and better outcomes can be achieved. Two heads are typically better than one, even when one of them is a machine. 

Media buying is both an art and a science. It shouldn’t be relegated to bots, or to junior people, or to unseen partners who may or may not have expertise. The media buyer ultimately controls both the targeting and the budget and holds tremendous responsibility for campaign results. That should be a very trustworthy, very skilled person - and just as importantly, a person who can meet with both agency staff and the client on a regular basis.  

If we want the C-suite to buy into digital, we need to help them understand the value of digital media and how planning decisions are made – as well as what the results are and how they’ve been measured. It’s worth the investment to pay smart, attentive humans to do the job and do it properly, rather than cutting corners to lower the monthly bills. With the right people in the job - people who understand the KPIs and their impact on the business - the value of the investment will be obvious. When the bottom line is positively impacted, the executive team doesn’t need much more persuading.

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