Strategy vs Pricing: May God Save the Agencies: S Yesudas, Y&A Transformation Pvt Ltd

I was among the audience last week at the exchange4media Media Ace awards where industry stalwarts discussed the above topic, 'Strategy versus pricing: What is the future of the media pitches?' The conversations moved from creating rules of engagement to self-regulations to mocking the procurement teams at the clients’ end to even calling out names of clients on the basis of disagreements in the quantum of discounts being demanded versus offered. Some also admitted that their focus was profits for their agencies.

I sat there as a neutral party and said a prayer for all of them, particularly the agency heads, seated on the podium as I felt the single biggest party who pays all their bills, The Client, was getting reduced to a ‘discount seeker’ while he actually plays the role of an ‘investor’ for their businesses. 

Imagine the plight of clients (not all of them can attract all types of talent internally) who are solely guided by their agencies. If agencies were to do an audit on themselves to see how they have guided their clients differently this year versus the last, capitalising on the behavioural insights, the host of targeting possibilities and the amazing potential of personalised communication, and therefore relevant content or how they managed to deliver on customer experience consistently on the different touch points the customers navigate or even something as simple as how many of their TV planners/buyers started talking multi-screen deals with broadcasters, considering the importance of the second screen or ‘audio visual planning’ as agencies keep proclaiming, it will become apparent that the only strict review that took place in agencies is that of their monthly P&L. Rest was some reports being sent to clients, absolutely oblivious of their real business challenges.  I recently saw an agency celebrating one of its clients, based on the number of awards his ‘campaigns’ won, while a large number of his users are pulling him down on social media for the very poor service experience he delivers. 

Are there agencies willing to stick their neck out and tell their clients that they won’t be selling million impressions with 90 per cent bounce rate any longer, but just that 10k, based on data and evidence, where most in the ‘community’ will be willing to listen even if it means a higher CPM?  Are there agencies out there who are willing to tell their clients how the brands’ baseline have changed positively because of all that they did, which could result in a decrease in the advertising investments and perhaps increase in other areas of investment like customer centricity rather than a thumb rule or Best Practice A:S ratio, which gets written off as an expenditure in the balance sheet? 

Some on the panel also spoke of “Outcome” based thinking/planning.  While it is music to ears, I don’t know how clients are being convinced with this philosophy. Unless the agencies help their clients build a single view of their consumers, connecting the various platforms or relevant actions to assess the fluidity and dynamism in the consumer mobility and work with clients to build some new structures where even basics like multi-media planning could look very different which can also potentially isolate the impact of channels of communication, the outcome based thinking as per the existing attribution models and lookalike audiences will mean no change whatsoever. The saddest part is even the first party data belonging to many clients are neither structured nor utilised impactfully.  

There are some wonderful slides in pitches which talks about “audience” becoming “community”, “target” changing to “engage”, “media plan” moving  to “interest plan” “penetrate” converting to “collaborate” etc.  But in reality when planners sit in front of their computers, absolutely oblivious of what’s happening in the world outside, they are only guided by IRS, BARC, ComScore, etc. to deliver campaigns on the demographic audience segments. I personally feel, the rigor, cognitive though, that used to go into awareness planning in the earlier times with very limited data is far better than the planning that takes place today, with abundance of data. 

Albert Einstein had once said, “The intuitive mind is a sacred gift and the rational mind is a faithful servant. We have created a society that honours the servant and has forgotten the gift”. When media agencies starts to become creative agencies for producing ‘tactical’ campaigns, it is to be understood that design makes people behave in different ways. The cognitive ‘tactical’ stuff is not likely to get access to the intuitive realm of the consumers’ brain where decision are taken. It needs human wisdom and creativity. Creative agencies will be better off in creating stories (multiple of them are needed, gone are the days of a single campaign, and in different languages, considering the emerging popularity of vernacular, even on digital). And the data and insights, which media agencies can provide creative agencies with, will help them tell better stories. 

Every business/distribution model as it was practiced earlier has changed/is changing rapidly at the clients end. Technology is becoming invisible in the consumers lives. Businesses are struggling to reduce frictions, save time and effort for consumers and build partnerships with them. It is high time the agencies moved beyond the traditional 4Ps of marketing and built Pride, Protection, Personalisation and Purpose as newer elements and became data driven to help their clients build customer centricity by acquiring customers based on a value proposition, telling them when the customers interest is weaning away, deepen the relationship with the ones those are retained and finally making them advocates by delighting them, neither under nor over their expectations. Researches talk about the economic value being lost in both these scenarios. But at the same time a cautious approach of un-covering the un-met needs will also do good for the clients. 

Those who believe that clients move businesses away from one agency to another for discounts, as someone on the panel mentioned, may want to read the viewpoints of Marc Speichert, Global Chief Digital Offer, GSK Consumer Healthcare who just consolidated their US$ 1.7 billion global media business with one single agency. And while this may sound exaggerated, I really believe that clients who think pricing is the only critical difference they need to derive from a pitch, will be the ones who will get disrupted first when their category goes under disruption. 

As a big believer in the law of diffusion of innovation, I would say, even if there is just a single willing agency with a sizeable client base, which can start thinking on #NextPractices POCs and Prototypes and rally some relevant people from their teams towards that, I can assure you that all of these conversations on Strategy versus Pricing will cease to exist sooner than later.  The broadcasters and media owners will be willing or forced to have very different conversations with them.  And that agency can surely get an amazing front lead in moving to the stature of becoming the clients’ business partners. They will also get paid accordingly. 

The transformation philosophy at Y&A includes an 80:20:24 process. This means clients can continue to do all that they do with 80 percent of their resources, while allocating just 20 per cent for building Next Practices. This, in a 24-month time frame will start showing equal to or beyond the 80 per cent, on various parameters, chief among them being customer centricity. Speed is the digital necessity; the ability and willingness to quickly embark on different concepts and ideas, recognising some may even fail. I do hope and pray that agencies open their eyes and minds and start looking at their clients as investors and make investor dividends a part of the monthly agency review as well. 

(The author is Managing Director & Co-founder, Y&A Transformation Pvt Ltd )

Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of exchange4media.com.

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