Why SMI will fly

  • Media
  • July 18, 2013
  • Paul Head
Why SMI will fly

In a recent column in NZ Marketing (and again in StopPress) John Baker expressed some opinions on the recent launch of Standard Media Index (SMI) in New Zealand and on media agencies in general. And a response on behalf of CAANZ media agencies to some of the specific comments is appropriate.

Firstly, as a general point, it’s interesting that John makes an issue of addressing the descriptor “traditional”, suggesting it is unfairly painting a negative light on media owners. He argues that “There is just media”. Yet he refers to “traditional media agencies” in the article, particularly in his “polar bear on the ice” metaphor. There seems like more than a hint of hypocrisy here. 

Indeed, I am not sure that media agencies are the biggest users of the phrase “traditional media”. My perception is that this is the domain of some media vendors, working hard to deposition their more established competitors. As far as media agencies are concerned, my members would be the first to agree that “there is just media”, although I dare say that our view of what is media goes beyond what he refers to in his opinion piece. It’s important to point out here that in recent media awards both in New Zealand and abroad, agencies are doing an incredible job creating effective communications for clients in places that have not “traditionally” been referred to as media channels at all.

To further respond to a couple of specifics in his piece:

He states that “the media agency model is still largely based on trading in traditional media and the commoditisation of it”.

I would be interested to know what factual information this has been derived from, given that he surely wouldn’t be using the same unsubstantiated “rhetoric” that he accuses media agencies of using. Of course, you can look at agency client expenditure and see that the majority of expenditure is still with what he describes as “traditional media’ (which curiously he insists doesn’t exist – there’s just media), which of course his business is part of. I would have thought that this is because the majority of media consumption remains with these channels, so it surely makes sense that media agencies advise clients to be proportionately present in these spaces—for now at least.

In terms of “ the commoditisation of it” (traditional media) I would argue that media agencies are driven (both financially via remuneration, and in terms of relationship retention) by delivering success for their client’s business, as defined by clients.  Certainly, there are clients for whom the agency task revolves around value and little else (that’s their right as business owners).  There are many more for whom innovation, creativity, service and accountability are the key determinants of success and these attributes are at the heart of the brief. 

As a counterpoint, it’s also worth acknowledging that some media owners make a strong selling point of how much cheaper their direct rates can be if media is not placed through agencies when they sell direct to advertisers. Surely this is not helping move away from commoditisation? So, if commoditisation is the issue, I think we need to consider what the real drivers are.

And finally to SMI. SMI is only an aggregator of spend, so there is no way that it can “be a measure of who has been able to screw the media owners the hardest based on cost, ideas or even value” as John claims. Additionally, SMI has never purported to capture direct ad spend, and indeed, doesn't see that as its business. Its sole purpose is to shine a light on expenditure trends at the top end of the market, providing a hugely valuable service to both major media and media agencies by publishing robust data each month that shows the movement of agency dollars between media and advertiser categories.

This is information the industry in New Zealand has never had before and it is why the majority of CAANZ media agencies are providing data and subscribing to the outputs.

  • Paul Head is the chief executive of CAANZ. 

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