ADOI Blog

Comments (10)

1. Jeff Zweig says:

   July 14, 2008 at 1:24 pm

   hey ham,

   good to see you writing on the blog again!

   is the situation you describe really all that bad? isn’t this just a case of market forces driving change in the industry? to me, it just sounds like media agencies (and/or media owners) either need to reinvent themselves to deliver more perceived value to clients or clients need to recognise that they are at risk of getting poor results if they don’t spend enough.

   if a client has the negotiating skills to purchase media so that it can increase market share without increasing ad spend then i say “well done!”

   after all, it is one of the core business objectives of a client’s marketing function to increase net profit and shareholder value as much as it possibly can. at the end of the day, this is the only reason for investing in advertising in the first place, right?

   but as you wrote, if industry players have let themselves be perceived as offering a commodity service then commodity pricing shall prevail–as it should

   it would be interesting to hear from greg paull of r3 on this issue to get his take on how and if a pay-per-performance model could work in malaysia. such an approach might help address the issues you raise although i suppose the key question is whether clients and agencies alike are ready to work on this type of model.

   jeff zweig
   chief guru, web guru asia
   http://www.webguruasia.com
2. Yong Choy Peng says:

   July 16, 2008 at 7:07 am

   Welcome back Ham! Was flipping the Star newspaper and am so glad to see that you are contrributing again after a hiatus of so many years!
   Looking fwd to your coming educational advertising articles.

   Regards,
   Yong Choy Peng
   One-AP Advertising
3. Import from China says:

   July 19, 2008 at 1:48 pm

   Great info – keep up the great work.
4. sc says:

   July 22, 2008 at 7:33 am

   IN RESPONSE TO ‘HOW MEDIA AGENCIES MAKE MONEY’!

   Dear Ham,

   Having read your article, title: “How media agencies make money”, I have found enough motivation in me to share with you some personal thoughts. Here, I would like to shed some light on another situation that has plagued the media agency as well.

   Here goes:

   To the top management of all media agencies and all the new and old big wigs at MSA,

   Have you every felt like a worn out wrinkled piece of stained table cloth, pegged to the clothesline, wrung dried and left waiting to be baked by the scorching sun? Well, that’s how many of my peers and I feel. Ok, maybe I’m exagerrating but i do think that people in our industry is very much feeling used, milked dried of our brainjuice and shortchanged by the very people whom we see as mentors and associations. We’re still living in an era where we are better known as specialists and more often than not, as a group of people who do not exist in the surface of the earth save for the other few advertising compatriots who have a little inkling over what we do. I say this out of the many times I still have to learn how to explain to my friends and new people I meet what I do for a living.

   Sometimes I feel like the wheel of an ancient bullock wheelcart, made to slog and slug away to earn my right to stay attached to the cart, oblivious to the vicious cycle. Yes, it’s true that we advertising people have been known to work late, get paid little and only moan and bemoan about it among ourselves as we ocassionally fall into the murky hole of self reflection and catch a glimpse of “why the f*** is my passion in fact killing me slowly and giving me sleepless nights.” moments of truth.

   All this while, we are all trained and desensitized into thinking that this industry works like this because of the unappreciative clients whose only pleasure in life is to dump more and more work on us so that they know they are getting the most bang for their buck and at the same time, our bosses keep telling us that there is an industry shortage of talent and they can’t do anything about it, yet the work and the new clients keep coming in and you look at them, they return a somewhat contrived sheepish smile, gives you a pat on the shoulder and tell you they’re trying their best. Maybe they are..yesh…maybe they are. But let’s take a step back and look at the bigger picture. Is enough being done? Are there not enough people to go around or are we really vying for the same group of people against many other companies who placed job placements ads in the papers.

   I think I do have a little inkling over what drives people and what keeps us going and going….Incentives. Most people join the fraternity because they say they have a passion to feed but what’s there to say about passion for an industry that didn’t even exist very much except as a small department of the whole creative agency a decade ago.

   Are they enough incentives for people even to consider this job that we do in the first place? All this time, we are being told that we are one of the better paid professions in the industry, being a very specialized group of people. Yet, in the midst of all the inflation, the rising interest rates and the increasing media costs (which incidentally also means copious increases in our commission), our pay have all but stagnate. Of course, staff pinching among the agencies have only helped bring in a little more clarity and ensured that we have become more valuable commodities that would enjoy a good pay raise if we jerked up our noses and start sniffing where the money is. This has also made the agency heads stand up and start lamenting the fact that their staff costs are going up.

   Yes, incentives play a big part too in advertising professionals’ life. Why did we even come into this industry only to find that all too glamourous lives that we seen on the silver screen goes poof and slips into memory lane as soon as we start wagging our tails and saying yes to all the requests that our bosses got us to accede to and watch our to do list(including reminding ourselves to make sure we get the laundry in case we forget amongst the whole other list of things that we have to do) grow.

   To take another step backwards, why aren’t people out there aware of what we do in the first place if we are always shouting about how well paid the people are in the industry. Why is there so little awareness about our industry and everyday, i hear someone from the management telling me that they can’t seem to hire people at all (and yes, we’re not even talking about able and good hires yet) and many times, we all just simply nod our heads in agreement without even thinking enough of the implications. Why aren’t more being done to bring our industry to the forefront, to stop lurking at the back and look like a support function of the fraternity when all these while we are trying to push for more stage time from our clients, asking to lead their accounts at times.

   A quick check on the internet and a scour through the courses being offered at our local colleges and university and you may somehow be able to find out that out of the many professions that universities and colleges seem to offer and the many jobs that they are professing to teach and get you into, media planning is not even one of them. Considering how specialized this job is, I don’t understand how the basic media planning 1 module subject is even going to be sufficient. True, maybe young people nowadays don’t really know what they want when they join college and hence should be offered a much wider scope of courses to take so that they have a wider variety of choice when they come out into the industry.

   Come on…. If I have studied arts and design, would I want to go into account servicing or media planning? What I would like to advocate is to ensure that the schools today are ensuring that their courses simply stay relevant in today’s advertising world, where change and the new media have simply fast forwarded everything.

   It’s been so many years since media has evolved to become a separate function of the advertising fraternity yet we have done nothing as an industry but bemoan the lack of talented young planners, and then when these planners have been trained at the expense of the time and effort of the senior people, only to have them leave and move on to another agency in search of better pay and satisfying their own delayed pursuits of more money in their pockets.

   Maybe while we are trying so hard to keep ourselves relevant and ensure that we are being truly recognised as consultants and how best to help the client spend their advertising monies, it’s imperative that we recognise that there is a sufficient base of people at the bottom of the food chain for which we will see move up one day, else….as the saying goes…the rich gets richer, the poor gets poorer…the selected few becomes more knowlegable and the ignorant ones will always stay ignorant and will one day find it almost impossible to catch up and tighten the gap that separate us secluded village planners who live in our own world from the real world out there.

   Maybe the whole idea of advertising and understanding what communications and media planning is all about should be transferred slowly to the advertising schools and we can lessen the unneccesary burden we media agencies carry. Maybe we can do more and we need to start today and stop procrastinating. Maybe if our work is less busy, we could get everyone together and start having one of those “pick your brain” sessions about how we can all have less work and more pay and really look like we are enjoying ourselves and our work. Maybe one day…

   Thanks for your time.

   disgruntled momentarily,
   SC
5. June LLL says:

   July 23, 2008 at 6:06 am

   To ask for a 15% commission from media owner is already ‘a lot’, some media specialists are asking for (15%+5%) officially and another 1% or 2% being the ‘personal under table’…..!! Do they really think that media owners are running biz for fun or for charity?

   As media owner, we are sort of being forced into giving this ‘personal under table’ as if otherwise, we will not be able to fill up our media space. I see the need in having more transparencies between advertiser, ad agency/media specialist & media owner.

   Are the ad agencies & media specialist being ‘professional’ enough to give due consultancy & advice to the advertiser or they are inclined towards certain media or media owner as they are more concern about their bottom line as well as pockets.
6. HOO says:

   July 24, 2008 at 8:27 am

   “That’s why I was alarmed earlier this year when a major Malaysian telco proclaimed it maintained its market share without increasing its ad budget. Kudos to the client for shaving off necessary growth-driving costs at the expense of advertising. But when the corresponding agency also proclaimed this feat with pride, it begged the question where our business is actually heading. Aren’t we supposed to be agents of growth? While prices on everything everywhere in the world are going up, advertising costs are going down! And we are happily lapping all this up.”

   The agency that responsible for the account should be proud of what happen. it proof that they manage to nuture the telco brand till a level that it become independent without any further advertisement expenses.Times to milk the cow !!! Bravo

   But time to shoot the dog (Media Agency) ,
7. Rahul says:

   July 25, 2008 at 12:04 am

   Hi SC

   You would no doubt agree that…

   You didn’t get the pay raise you expected,
   you’ve worked with the wrong agency,
   your agency obviously only offers “basic planning & buying” services,
   passion and long hours are not directly proportional, or even correlated, possibly,
   you haven’t invested in yourself with further education, of your own accord,
   you’ve no idea what comparative payscales in other industries are (dis-similar jobs, mind you),
   you still prescribe to linear thinking that links vocational ability with formal education,
   that just because they don’t teach “flyover building” as part of CIVIL ENGINEERING, engineers who design and build one are not educated (hey Media Planning is not a field of study!, It’s an applied vocation arising from a wider field of study called Marketing Communication/Communication!),
   you’ve NO idea how a business is managed,
   you’re miserable in the industry you’re in,
   that you should join another industry and partake of the greener grass on that side of the fence.

   You should be happy in life SC, leave advertising. you never know, you may show us the way and start an exodus!

   Cheers
   Rahul
8. Barack says:

   July 31, 2008 at 6:32 am

   The MSA – those Mind-bogglingly Subservient Anuses have completely screwed up the industry. MInd-boggling because they can offer negative commissions.! Come on – if you are reading this – you know what kind of tricks they get up to. Creative thinkers don”t work at Media Specialists – this is a sad fact of life unless some people choose to bottom feed on the the industry scraps. They are not an ad agency where at least some of the action happens neither are they the BCG.So what kind of talent do they get. It’s a motley group made up of largely third-raters who push paper and powerpoint to hide the abject lack of creative thinking and SERIOUSLY strategic insights.Not to mention some really really bad capsules and ‘branded” content.

   For a lateral media plan and clerking out some media scehdules (which frankly some smart kids from Lim Kok Wing can muster) they deserve no more than the negative commission they propose . Unfortunately the people who suffer are the media owners who have no choice but to increase the size of the volume rebates and eventually end up paying up for not only the conferences but have to cough-up for the company trip as well
9. debo'nair says:

   August 7, 2008 at 2:40 pm

   Before I register my comments, I will provide some information on my background. This will allow any reader of my comments to make a more accurate appraisal on the value of my words. I am complete virgin in the advertising/media landscape. When compared to many of the readers here, I am nothing more then a sperm still swimming in some anonymous gonad, so forgive me if I sound naive.

   I stumbled into the media landscape approximately a year ago. Prior to that I was doing absolutely nothing, and I was quite happy doing absolutely nothing. Due to a series of events, culminating in me being thrown out of my parent’s home, I was forced to fend for myself. I place no blame in my parents though, since my only contribution to the household was bodily hair and flatulence. Anyway, to cut another long story short, within a couple of months, I found myself running a small company that was contracted to a GLC which was dabbling in a new media project. I was managing a small team and we were contracted as media reps and sales agents with the straightforward objective of securing sales revenue for an ill conceived product they termed ‘airtime’. Unfortunately all I ever saw was hot ‘air’.

   It wasn’t very long before I witnessed firsthand the creative techniques GLC managers deployed in wasting our tax contributions to the government. Compliments should be accorded where it is due; many of these managers have elevated the process of capital depletion to an art. As you might have already assumed, my romantic engagement with this GLC ended in an ugly breakup. Unfortunately it is not polite to kiss and tell, at least not in a public forum.

   Anyway, to get to the point, during my affair with this GLC, I obviously had to deal with the numerous media specialist firms around. And naturally I have developed some strong views about this bunch. I am sure that media experts are a necessary component in the advertising ecosystem. Media purchasing and planning is an important tactical effort that can make or break a campaign even with the best creative. This is the theoretical premise for the continued existence of these constituents in the advertising sphere.

   The practical reality though, specifically from my viewpoint is rather uncomplimentary. The entire industry seems contrived. And the industry top dogs have flung so much turd on themselves, they have created a foul-smelling protective crust that keeps the curious away. Naturally, this crust also affords them an air of mysteriousness which they have been milking, and they maintain this aura by awarding themselves superfluous titles like ‘specialists’. Who dares question the mysterious specialist? Their clients? Not enough clients subject these media specialists to critical evaluation; rather they prefer to concur with the mysterious deductions of these magical specialists whom come armed with a multitude of proprietary ‘tools’ which they supposedly use to plan, assess and measure media strategy and effectiveness.

   Herein lays one of the major flaws in the entire industry set up. The specialists have the clients believing in their fairy-tale, and then they use this influence to blackmail the media owners. Being cock blocked from directly accessing potential clients, most media owners have no choice but to succumb to whatever these dung flinger’s desire. This might be the standard 15% commission, 5% more if they are one of the super duper specialists like the OOH guys, maybe a contribution to the company kitty, and Rolex for the account manager. Some specialist managers even suggest that media owners should provide more incentives by organizing ‘buying tournaments’ so that the best team of buyers within an agency with the highest billings should win a trip or something similar in value paid for by the media owner. Sounds like a really fun job. And if they procured the client on a 0% commission structure, it is no matter, because there is another magical word called ‘rebates’ that will bring them the same quantum of earnings. With all the fun ‘tournaments’ and ‘rebate’ celebrations, it seems more likely then not that media specialists have forgotten the very premise of their existence. Anyway, let me breakdown my grievances in clearly demarcated territories.

   1. Commission v Consultation
   If we allowed common sense to prevail, we will see that the remuneration structure based on commissions is a funny contradiction. Media specialists whom are supposed to generate more bang for their clients buck, actually stand to earn further by spending more of their client’s money. So instead of carrying out negotiations with media owners to drop prices so that the media spend can be stretched further, they actually prefer media owners to maintain really high published rates. I have been told quite unashamedly by many buyers that they will not consider purchasing any ‘airtime’ from us unless we increase our published rates (obviously while maintaining the initial sale price to them). They claim it is just not worth planning and making a suggestion to a client if the commission earned from the purchase is so tiny. This seems contradictory to what I assumed the functions of these specialists were. But then again, I might be missing something here. Maybe clients actually want their media campaigns to be determined by factors outside purely tactical elements such as effectiveness, efficacy, novelty in application, and creativity in deployment. I’m sure the profit potential of the specialist is an important factor that clients must consider as well. Just don’t ask me why. And since I don’t know the answer, I am inclined to discount that possibility. I also believe that there is a better remuneration model which is based on a consultation fee rather then commissions. And if all goes according to plan, I will be applying this model to my own little media consulting startup.

   2. Inertia
   We live in a digital world. Pick any media or advertising journal and you will discover countless articles on the wonders of the digital revolution. Attend any media conference and you are bound to hear about the plethora of possibilities technology will unleash in media deployment. If you are in the advertising industry, and you have not come across somebody somewhere commenting on the increasing fragmentation of media consumption, you need to wake up from your deep slumber, or get a new job. The bottom line is that the media landscape has just gotten more vibrant and exciting. It has also gotten more complex and confusing. Somebody just forgot to inform the media specialists about this. Instead of driving the industry forward into this digital wonderland, the specialist are doing everything they can to restrain ad spend from flowing into newer mediums. Why you ask? To answer this question I will assume the role of a hypothetical CEO of a media specialist agency. Obviously as a hypothetical CEO looking down, will discover that the vast majority of my employees have a creative quotient that is equivalent to that of a brick wall. They have been trained in a broadcast environment by third rate local institutions. Their understanding of metrics is restricted to CPM’s, frequency, reach, and everything else from the broadcast era. As a CEO I realize it is almost impossible for me to retrain this portion of my workforce to adapt to the digital world. Therefore, from a purely human resource standpoint, I am disposed towards maintaining the status quo.

   From a business standpoint as well, I will am forced to ensure that the current spending pattern is maintained. This is because new media is highly complex, with many different fragments. And each and every fragment has a corresponding pricing structure with measurement metrics which are confusing. It is a simple choice really, why have my team slog over recommending a campaign on multiple internet sites, a number of digital signage networks, and some experimental mobile model when I can just push my client towards taking up a number of full page ads on a local daily. We will earn the same amount of commission for so much less work. That is the smart business choice. But basically it leaves proponents of new media frustrated since the ad dollars are not flowing into their mediums, suffocating this nascent industry. As a hypothetical CEO of a large media agency I cannot ignore the fact that the future will be different, but I have to ensure my bottom line is not affected by an ambitious foray into this new domain. So what I will do is predictable and hypocritical. I will talk up the wonder that is the digital revolution and describe the brilliant changes it will effect in the media landscape, but I will do everything I can to delay it from happening. When advising my clients, I will state that the new media sector is still in a state of flux and it is not an advisable media strategy. The truth is the media specialists are the ones keeping this industry in flux by withholding the nourishment it badly needs. They will use every trick available to maintain their archaic spending patterns. But the levee will break one day. Of that I’m sure.

   There are few more points for contention, but as it is, I have written enough. This is supposed to be merely a comment, but it is close to overtaking the blog itself in size. Although the industry is quite depressing and the majority of the player massive A-holes, I will not be discouraged. Creativity is not limited to creative agencies alone. Creativity should begin with the medium itself. But there is no point just talking about it, so I have grouped together a few more passionate sperms just like me, and we are preparing for an ejaculation into unknown territory. We are passionate about media, we do not subscribe to the status quo, and we have our own business model that we believe is devoid of the ironies above. Plus we don’t have a lust for money. We have a lust for life, and we want to do something we can truly enjoy. The big guns will almost definitely hide all the genetically superior eggs (rich clients), but we hope our passion will somehow lead us to one receptive client somewhere, and together we will fertilize our ideas and create life in this decaying industry. Keep an eye on this space.

   Anyway, the views above are mine personally. If you feel compelled to tell me I am a flaming idiot, please email me directly at v_nair@yahoo.com.
10. Ham says:

    August 17, 2008 at 5:06 am

    Please overtake this Blog, my signal lights are blinking in your favour!