The Value of the Plan

30 July 2014

One of those statements that agencies make so often they’ve come to believe it themselves is that clients won’t pay for media planning. This may be so, although it’s not my experience – after all can you blame clients for not wanting to pay for a skill the agencies themselves treat with such disdain.

Let’s take a really simple ‘Janet and John Do Media’ example. A media planner, working on a print plan decides for all sorts of good reasons that the optimum number of insertions per title is 5. He decides to recommend 5 titles, 5 insertions each, 25 insertions in total.

The planner presents his proposal to the client, and justifies the use of all 5 titles, as well as explaining why the magic number of insertions to achieve the client’s objectives is 5. It all makes sense to the client, who buys the plan and approves a budget of 100 units.

The planner passes the plan to the buyer to execute. The buyer does two things. First he decides that one of the selected titles doesn’t fit his agency’s deal criteria. So he changes the title for something broadly similar. He tells the planner of his decision (generally ‘tells’ as opposed to ‘asks’). Then he negotiates so efficiently that he delivers 6 insertions per title, 30 in total for the budget of 100 units.

The planner, if he’s doing his job correctly, tells the client that now that they’re in the market, negotiating the buys he proposes substituting one title not on the plan for a new title, even if he doesn’t necessarily explain the true reason why. In most cases the client will take the planner’s recommendation. Why wouldn’t he? The planner most likely won’t bother to reveal the increase from 5 insertions to 6 until after the event, at the post buy.

What’s happening in this example is the agency is a) acting in its own best interests by meeting its corporate deals; and b) spending to budget as opposed to buying the plan.

A savvy client might ask why, if 5 insertions per title is the optimum number as defined by the plan, his bought schedule finishes up with more. An even more savvy client might reasonably prefer to buy the carefully constructed and rationalised plan, and spend the money saved on that creative proposal made by the planner to conduct a piece of original research designed to learn something that can be applied to the next campaign.

In effect the difference between these two scenarios is buying to plan, and spending the savings to learn something, as opposed to spending the budget buying tons of stuff. It assumes that the planner has used his skills, and all the research at his disposal to propose the best recommendation to meet the client’s needs. Simply buying more is not necessarily the best use of the budget.

Of course in real life the agency will congratulate itself on a job well done; the media auditor will confirm that the deals have delivered value; and the marketing manager will tell his bosses that he’s managed his agency so effectively that they’ve delivered 30 insertions for the price of 25. He will also invent a dispute with the title dropped from the schedule, will tell everyone that they’ve stood up to a big bad media owner and have thus laid down a marker for the next time.

Where exactly in all of this is the plan? Why should the agency be paid for its planning input? Yes, this is a deliberately naïve and simplified example but the principles illustrate some of the problems bringing the agency business into such disrepute.