Reasons behind the stagnation of Media Buying
Thursday, March 20th, 2008Despite being the talk of the town in the corporate world, as well as its business growing at a rapid pace, yet media buying and ambient media is still a budding business in many countries. There a number of reasons behind why media buying is still torpid:
Talent crunch
A great reason for the setback of media buying industry is the lack of appropriate talent. During the time when advertising was most popular, agencies used to get as much as 15 percent commission. However, since the ad agencies jumped into the arenas of media and creative agencies, their fees has been reduced to 11:4.
Undercutting and payments
Due to the immense competition, media agencies have been trying to build volumes at marginal costs. To do this, a number of agencies resort to undercutting as it often tempts the client to change agencies and move to the one offering lower rates.
Pitching and procurement
Though most agencies aren’t fond of it, but pitching has become a major routine. The clients always have some valid reason for calling a pitch as in this way they pay less to the media agency. The process of pitching involves sophisticated techniques, tools and models and is a further drain on the already appallingly low revenues of agencies.
However, with the entry of the biggies, like Buy Now Media, in the media buying industry, the focus is shifting from finding cheap deals to getting effective campaign as a good return on the investments made.