
Why do clients (and agencies, in some cases) fall for the notion of “clout” in buying media? The big guys are always touting the fact that the more money you have to buy with the lower the costs for your clients.
Clout works only if there is an unlimited amount of media inventory available. It works against you if there is limited inventory and the demand for it is reasonable. It’s just logic, pure and simple. Let me give you a common example of media agency at work using their clout. We will call this agency Hugo Media.
Hugo Media Buys Network TV
Let’s take the idea of “clout” as applied to network and spot buys at Hugo Media. Assume I am a network TV buyer at Hugo. I have clients with boatloads of money and I can afford to buy 10% of all available network TV inventory in a given year (this is not a fantasy game.) By the way, I am 22 years old and have only been doing this for 13.5 months but that is incidental to the story.
Network TV inventory is, for all intents and purposes, a limited commodity. Not even the networks are dumb enough to cancel programming and substitute advertising (yet.) So, I call up the big five networks and ask them for avails for my 10 big clients. After all, the concept is that all clients will have their buys around the same time in order to take “advantage” of my enormous clout. I don’t have much clout if the networks don’t know the enormous amount of money I am spending.
Note to reader: This is not speculation. I have actually bought network TV at some of the largest agencies around…and some of the smallest.
So I guess this would be the thought process envisioned by the leaders (during a new business pitch) at Hugo Media:
The networks are going to rush to give me 10% of their inventory at much lower prices than the smaller network buyers because they want to discount most of their best programming. Networks sell the majority of their inventory to the big agencies so why wouldn’t they slash the prices for them? Yeah, let’s sell 75% of my limited ad time at a deep discount and gouge those those little guys that represent 25% of my inventory. You know, the little clients who really have other options besides network TV. Sure.
As a network buyer I know my clients need and want to be on Network TV. The networks know this as well. Another incentive to deep discount prices? Not in any rationale universe. The top 3 to 5 networks know I will have to buy most or all of them as ratings are so low that I can’t afford to leave any viable network out of the buy. Unless my target is 55+ year olds which is when CW doesn’t make so much sense. Lots of those buys out there…
So which agencies do get the best rates? The medium to smaller shops who don’t have to deal with the New York reps and can easily fly under the radar. Any Media Director worth her salt can figure out how to buy network as it is a lot easier than buying spot TV.
So why do clients fall for the “More is better” line? Beats me.