How to be risk aware with your media contracts
In a year that looks set to be pitch heavy, anyone working in media and marketing may find themselves dealing with more new contracts than usual as business changes hands, writes STEWART MORRISON.
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Each year FirmDecisions in MEA audits media and creative agencies across every agency holding group as well as numerous independents in the POSM and merchandising space, on behalf of approximately 50 of the largest advertisers. All advertisers have three common contract questions: who are the agencies in my supply chain (particularly in digital); what does each agency really cost me; and are they operating as expected?
Looking at digital specifically, as this is the medium with the most complex costs and supply chain, in southern Africa, digital advertising is growing – GroupM points to digital ad spend having grown 4% in 2020, with another 4.2% rise so far in 2021 – to reach a market share of 37% in South Africa. To put this in real numbers, Statista’s Digital Advertising
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hile some speculate clients are more likely to be reviewing their media activities due to changing consumer habits, media channels, geographic footprints and budget cuts over the past year, others point to CMOs’ new focus on media strategies and targeting market share growth. Either way, 30% of brands say Covid-19 has accelerated their media transformations. So new contracts are inevitable, and while there’s much negotiation involved for agencies and advertisers in reaching those agreements, the work doesn’t stop there. Put simply, are all your agencies charging you and buying media according to the contract’s agreed terms after signing? For example, in Africa it’s rare for all the media to be bought locally, instead being centralised in key hubs: South Africa; Nigeria and Kenya. Thus media or creative work beyond those locations will likely be bought via a subcontracted partner or lead agency affiliate. And when an extra supplier layer is added, inevitably there are extra costs, which has a negative impact on transparency and must be mitigated in the contract.
themediaonline.co.za
30.06.21 12:04
