EMM International - EMM in the News

EMM in the News

EMM predictions for 2004

by Stephen White: January 2004

Introduction

EMM is a media management company.
We recently changed our name from EMM to EMM!
We operate as a surrogate media management department for many global advertisers.
Services provided
- media auditing and evaluation
- contract/fee negotiations
- performance benchmark setting
- agency pitches
- ROI evaluations
- consultancy

EMM Top Ten Predictions For 2004

Further consolidation amongst media agencies
Client frustrations will increase
Media accountability will increase
Launch of new media style agencies
More media transparency
Media’s importance will stay low
Media prices are set to increase
The importance of the UK will decline
BRIC markets will dominate
Media agencies will discover that their people are their only real separator

EMM Predicts Further Consolidation Amongst Media Agencies

Despite the lack of convincing evidence to support the promise that big is better, the reduction in choice of media agencies for advertisers will continue in 2004/5.
The likely candidates for some form of change are Aegis Media, M.P.G and Mediacom – but watch I.P.G closely.
The issues of confidentiality, flexibility and conflicts will increase the potential for tension within client/agency relationships.

EMM Predicts Client Frustrations Will Increase

“Need more evidence to justify media investments verses other marketing activities.”
“The fact is that agencies do not have the skill-sets to exploit the new communication opportunities.”
“Agencies need to be more in touch on how we make money and deliver solutions to that objective.”
“Simply presented information with key learnings, not 100’s of pages of data with just lots of analysis which no-one reads.”
“Death by PowerPoint”
“Surprise me!”
“I know the night is dark!”
“Every agency should be looking for new ways to reach the consumer therefore the offering must be greater than current expectations.”
“Only if I push really hard is stuff made accessible to me.”
“Data rich, intelligence poor – too much information, not enough insight.”
“Above/below the line needs to be better understood by media agencies.”

EMM Predicts More Media Agency Start-ups

Clients have not been overwhelmingly convinced that consolidation has given them tangible benefits.
Our Audit evidence suggests that the price gap between the top buyers is very small indeed which focuses more attention on strategy and planning.
Clients miss the personal commitment of individual teams working on their business and many clients are frustrated by their descent down the Agency priority lists.
We see opportunities for individual clients to encourage specialised local media start-ups in areas such as IT, Pharmaceutical and Entertainment.
These start-ups do not have to follow the strategy led Naked, Rise and Unity formats
They just need to provide proper media strategy and media planning from passionate Media executives freed from corporate negativity.

EMM Predicts Ever More Focus On Media Accountability

There will continue to be more involvement by procurement and purchasing departments.
There will also be continued frustration between marketing departments and procurement departments.
However across Europe we estimate that less than 50% of planned media expenditure ever gets a proper post campaign analysis.
Our experience suggests that procurement people embrace independent media evaluation very easily.
Where clients use an independent assessment company it usually reflects well on the marketing department that employed them.

EMM Predicts Media Deals Will Become More Transparent

There are 7 major TV media buyers who represent 60% of TV media expenditure in the UK and there are now only 6 TV sales houses.
So only about 30 people in the UK actually understand the value of the media deals, the implications and constraints those deals entail.
That can’t be right, and more clients will want greater explanation of how agency deals operate.
The role of Ofcom in monitoring fair play in TV media deals is going to be an interesting development in 2004.
In the other major European countries where a dominant player like ITV has existed for some years there are no such controls and TV prices are much lower than in the UK.

EMM Predicts That Media Will Remain Too Low A Priority For Clients

Media expenditure is often the second or third most expensive item on a company’s capital expenditure budget.
The same money spent on a factory build will warrant an army of specialists and full board involvement.
But media expenditure is much less rigorously scrutinised.
Marketing Directors don’t have time to know enough about media.

The Importance Of Playing With Your BRIC(s)!

Goldman Sachs predict a huge growth in advertising expenditure in the BRIC markets during 2004/5.
Indeed the BRIC markets will together represent more than 50% of the size of the current G7 most powerful countries in the world.
And who are the BRIC markets?... Brazil, Russia, India and China.
The influence of these markets and the general feeling of optimism for 2004 put forward by Martin Sorrell (WPP) and Doug Flynn (Aegis) will together soften the revenue blows that agencies have received in the last two years.
But for real growth the media agencies have to get into BRIC countries because growth in markets like the UK will inevitably be slower and more costly.

European Markets Represent Better Media Value

A quick look at media prices demonstrate how media value is a potent weapon for international marketers to use in generating an improved ROI.
Sadly this weapon is underused.
There are of course a huge number of factors that influence the price of media in different countries in Europe.
But if advertisers really want to save money they may be better employed in allocating media funds on an ROI basis rather than be transfixed by local budgets and country centric attitudes.

Newspapers: Adults CPT (€) Page Mono 2002

Magazines: Adults CPT (€) Page Mono 2002

Radio: Adults 30” CPT (€) 2002

Outdoor: Cost Per Billboard Equiv. (€) 2003

TV: Adults 30” CPT (€) 2002

EMM Predicts Greater Focus Away From The UK

20 years on people still talk about UK and then Europe.
As advertisers increasingly focus on Europe they will appreciate that they are more likely to gain greater values in other major markets.
International media agencies based in London will price themselves out the market.
Whilst the global influence of the Olympics, and the US elections are big news for all of us, the regional influence of Euro 2004 is not too important in Asia or Latin America and in that context is a 2.5% - 3% rise in UK TV revenues really that important an issue?
We predict that the focus on media value will move away from the UK.

EMM Predicts That Discount Will Remain A Key Factor

But we think that is naïve and media value is more important.

Average Print Discounts off Ratecard 2002

Italian Example: Newspaper Discounts by Title 2002

EMM Predicts That People Will Make A Difference In 2004

Advertising and media industries have always been able to attract the highest quality talent … until recently.
Recession and lack of profitability has had its impact. There is still immense talent around but huge gaps in experience exist.
Too often we meet media people that look like extras from Pop Idol and the Adam’s Family and if I blanch at them, I wonder what effect these people have on the clients!
The most important part of the media agency world are the people involved and our standards have dropped and are dropping. Unless better people are employed advertisers will lose further confidence and that’s not good for our industry.

Summary Of Key Predictions For 2004

Media buying equality has broken out, leaving media accountability to focus not on costs but on the quality of media strategy and media planning.
Those clients who follow this route seem to be taking the high ground and deliver leading edge solutions, not based on an agency’s volume but on their ability to encourage people to use their intelligence.
Those agencies who have experienced individuals who are very good media planner/buyers and who embrace creativity will be the shining lights in client meetings.
Because clients are bored stiff with the spurious debates about media neutrality, communication planning and so on.
They want grown up media people who know their “media stuff” and apply joined up thinking to the clients’ business week in, week out.
That the media owners will become as much of a problem to manufacturers as the retailers. But are media agencies really able to help or will the direct approach from clients pay bigger dividends?
Only those clients that allocate their media budgets by some form of ROI rather than be shackled to local market budgeting politics will succeed and save money.

And Finally…

We predict continued growth for Media Management Companies!