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Poor Agency Practices Leading to Direct Media Relationships

Several broad agency/client trends are mixing together in a volatile brew in England, which may portend trends to come in the U.S. and elsewhere, as the companies involved are some of the world's biggest agency groups and many of their largest clients.

The fact that agencies tend to recommend media choices and deal structures that are - surprise - most profitable for agencies has been dawning on major brands, having taken only a couple decades to sink in. The resulting consternation is affecting the choices of some brands to go direct to media properties, cutting out the agencies.

Interestingly, marketing departments at major brands appear to be behaving in similar fashions their agency vendors, purchasing major media deals in large transactions, rather than breaking up budgets into higher-efficiency/higher-overhead transactions. Shareholders may not be seeing the greater media efficiency boosts as a result, although perhaps some of the overhead costs of hiring agencies can be eliminated.

In England, the major media regulator is looking into antitrust - or at least market efficiency - concerns, given that such a large proportion of spending is going through very few buyers. All of this appears to be leading to an industry culture that takes less offense when media companies meet directly with brands - something that was once considered an act of client relationship violence.


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