A point of view

Who is your media agency really working for?

Most advertisers spend a good deal of time asking whether they are buying the right media. There may be a better question to ask first: why is my agency recommending it?

Read the five questions Ask ma for a second opinion

Advertisers interrogate media plans closely. Audience, reach, frequency, cost, results. All of it gets tested.

The commercial machinery behind the plan tends to get far less attention. For many advertisers, it simply isn't a conversation that comes up very often. Most have never had cause to ask how their agency actually makes its money, or whether the answer changes depending on what they buy.

It is worth knowing. Not because there is a right and a wrong way to run a media agency, but because the ways genuinely differ, and different structures can create different incentives.

The commercial models

How media agencies are paid.

Agencies are remunerated in several different ways. Most arrangements are one of the following, or a combination of them.

  • A fee

    • Advertiser pays the media cost to the media owner
    • Advertiser also pays the agency a fee

    Paid separately for time and expertise.

  • A commission

    • Advertiser pays the media cost to the media owner
    • Agency earns an agreed percentage of the spend

    Paid a percentage of what is spent.

  • A margin in the media cost

    • Advertiser pays the agency one price
    • Agency pays the media owner, and keeps the difference

    One figure rather than a cost and a fee.

  • Principal-based buying

    • Agency buys or commits to the inventory in advance
    • Agency later sells that inventory to the advertiser

    The agency owns the inventory before you buy it.

Principal-based buying is worth explaining properly, because the term is common inside the industry and almost unknown outside it.

Ordinarily an agency goes to the market on the advertiser's behalf, buys the media the plan calls for, and is paid for doing so.

In principal-based buying the agency has bought or committed to media inventory itself, in advance and at its own risk, and it then sells that inventory on to advertisers. Its return is the difference between what it paid and what it charges.

Both are legitimate. Neither is a secret, and where principal buying applies it should be set out in the contract. But they are not the same relationship. In one, the agency is buying on your behalf. In the other, it is selling you something it already owns.

The point is not that one model is honourable and another is not. It is that they sit differently, and an advertiser is entitled to know which one applies to them.

The practical question

Could my agency earn more if I buy one recommendation rather than another?

The planning environment

What that can mean for planning.

This is not a question about the people doing the planning.

Media planners are, in our experience, thoughtful and rigorous almost everywhere. Excellent planners work inside every kind of agency structure, and most of them are trying to solve the advertiser's problem, not the agency's. Treating this as a question of individual integrity would be both unfair and beside the point.

The question is about the environment they are planning in.

If some options carry a better return for the agency than others, that sits in the background of every plan, whether or not anyone acts on it. If inventory has already been bought or committed to, there may also be a commercial incentive for the agency to sell it. None of that automatically makes a recommendation wrong. But it is part of the environment in which planning decisions are made.

Great planning needs the freedom to consider the whole market, and the freedom to reject any part of it.

That second freedom is the one that gets overlooked. Planning is not a hunt for places to put a budget. Sometimes the most valuable thing an agency can say is that a channel everybody assumed was essential has not earned its place this time, or that the budget would work harder somewhere nobody had suggested.

A good agency can tell you what it is recommending. A genuinely useful one can also tell you what it considered and ruled out, and why.

The brief comes first

Start with the advertiser, not the inventory.

Before anyone settles on a channel, a platform or a format, a shorter list of questions comes first.

  • What are we trying to achieve?
  • Who are we trying to reach, and where?
  • When do we need to influence them?
  • What is the budget?
  • What combination of media gives the strongest answer to all of the above?

Only then does a media plan have any business taking shape.

If the answer is out of home, recommend out of home. If it is TV, audio, sponsorship, digital, or several of them working together, that is where the plan should go.

The strategy should determine the media. The available media should not determine the strategy.

Second opinion

Wondering about a plan you have already been given?

Send it to us. A brief, a live proposal, an existing plan, or simply an objective and a budget. We will tell you how we would approach it.

Ask ma for a second opinion

The five questions

Five questions every advertiser should be able to ask.

  1. 01

    Why are you recommending this media?

    There should be a clear strategic answer, and it should be about the objective. Availability and price are facts about the inventory, not reasons for the plan.

  2. 02

    Does your agency make more from some recommendations than others?

    The most useful question on this list, and the least asked. Three ways to put it:

    • Does your remuneration change depending on what I buy?
    • Are some channels, partners or inventory commercially more valuable to you than others?
    • Has any of this inventory already been bought or committed to before my brief arrived?

    A yes to any of those is not a problem in itself. Plenty of good work is done inside models where the answer is yes. Not knowing is the problem.

  3. 03

    What did you consider and decide not to recommend?

    A plan is a set of choices. What was ruled out, and why, often tells you more about the thinking than what survived.

  4. 04

    How are you being paid?

    A fee, a commission, a margin inside the media cost, or some combination. There is no single model every agency has to follow, and asking is not an accusation.

    But there should be a clear answer. If your agency cannot describe how it earns from your account in a couple of plain sentences, that is worth noticing.

  5. 05

    What is your technology optimising for, and who decided that?

    More of media planning is becoming automated, and much of that is genuinely good. It will make planning faster and, used well, sharper.

    Automation does not remove the commercial questions above, though. It inherits them. A system built inside a model where certain inventory or certain outcomes are worth more to the agency is a system optimising in that context, whether or not anyone intended it to.

    AI can optimise a decision. It does not decide whose interests the objective serves.

    So the questions become: what is it optimising for, who set that objective, and does the answer look the same from your side of the table as it does from theirs?

Our own answers

How ma answers its own questions.

It would be a poor piece of writing that asked advertisers to put five questions to their agency without answering them ourselves.

On how we are paid

We do not charge separate planning or buying fees. Our remuneration sits within the cost of the media itself, and we are happy to explain how that works on any piece of business.

On whether we earn more from some recommendations than others

The economics can vary between media, between suppliers and between individual campaigns. We are not going to pretend otherwise. What matters is the order things happen in. The recommendation starts with your brief, not with which option produces the best return for ma. Where a commercial factor is relevant to something we have put in front of you, we are happy to explain it.

On what we do not do

We do not buy media inventory in advance, on our own account, and then go looking for advertisers to sell it to. We go to the market against your brief and buy the media the plan calls for. Nothing arrives in your plan because we already own it.

On breadth

We are an independent media agency. We plan and buy across out of home and DOOH, TV, BVOD, CTV, radio and audio, press, digital, sponsorships and partnerships, in the UK and internationally. We do not start a brief already knowing which channel we are going to recommend.

On saying no

If a channel has not earned its place in the plan, we would rather tell you than fill the budget with it.

London, New York, Dubai, Dublin.

Second opinion

Already have a media plan? Get another view.

You do not need to move agencies to ask us what we think.

If you are planning a campaign, reviewing a recommendation you have been given, or simply wondering whether the budget could work harder, send us what you have. A brief, an existing plan, proposed costs, a channel recommendation, or just an objective and a number.

  1. 01Send itA brief, a live proposal, an existing plan, or an early idea.
  2. 02We review itObjectives, audience, channel choice, timing, cost and value.
  3. 03You get an honest viewIf it is already strong, we will say so. If we think it can be improved, we will show you how.

There is no cost and no obligation. Everything you share with us will be treated in confidence, and we are happy to put a mutual NDA in place first if that helps.

Ask ma for a second opinion

Claire Rooney, Media Partnerships Manager, ma  ·  claire@wearema.co.uk