Trebles all 'round. Never mind the vague predictions of future intent from the IPA's quarterly Bellwether Report, there is substantive evidence that advertisers have growing confidence in the advertising market, and are increasing their spend accordingly.
If the television market is anything to go by, the famous "grimmest advertising recession since World War II" is over, with double-digit growth in every quarter of the year – September looks particularly rosy. You might think, then, that after all the painful cuts and job losses the media industry has endured, it would have hitched up its breeches and be Hokey-Cokeying in celebration. But you'd be wrong.
There is one sorry bunch for whom an increase in spend by advertisers looks like being a very bad thing indeed; those media buying agencies that have bet their financial futures on guaranteeing advertisers an absolute discount on the media prices that they paid last year in order to win or retain their business.
Media auditors advised many of their advertiser clients to review their agency relationships in 2009, knowing that there was value to be had from squeezing suppliers. So desperate were some agencies to maintain scale that they made promises that they can no longer deliver on, such as remuneration pledges based on the discount that they achieved for the advertiser on that year's media prices.
If average media prices had fallen – or stayed the same – then the media agencies might just have been able to deliver on these promises; as it is, with more ad money coming into the market, prices have soared and media inflation has returned. Not only are the agencies unable to make money out of their advertiser deals, but they are also going to struggle to deliver on the price promises that they have made.
So should advertisers have any sympathy for those agencies that find themselves in this predicament? No. The agencies signed their own death warrants by creating a battle among themselves based purely on price; they are the ones that for too long have supplemented their incomes through various nefarious means, such as sur-commissions; and they are the ones that are supposed to be key to creating brands, but have singularly failed to build their own.
It will take some very creative accounting for some agencies to get themselves out of this mire; it is fortunate for them that this has become their core business, rather than delivering the correct media communication plans for advertisers. They have long preferred the subtle sleight-of-hand that an agency deal affords them. Advertisers beware.
It's difficult not to conclude that the media agency model is now so broken, mainly through their own doing, that marketers should demand to be treated with the respect that they deserve and get clarity about what their suppliers actually deliver for them.
They also need to realise that agencies cannot always deliver what they claim, and should view extravagant promises with great scepticism, as the agency will inevitably be trying to make up the money via some dark-art kickback or another.
The agencies have the tougher task. Clarity would be a good start, as well as developing the ability to say no. More fundamentally, they need to start showing that they can add value and have evolved their business models from simply being based on screwing their clients on pricing. Never has it been more essential for them to start building their own brands.
Jeremy Lee is associate editor of Marketing. Read his blog at
30 SECONDS ON ... THE HOKEY COKEY
- The Hokey Cokey has been a popular party song and novelty dance in the English-speaking world since the 40s.
- The origins of the music and lyrics are obscure, with various individuals claiming authorship. According to one account, it was written by band leader Al Tabor in London in 1940. However, songwriter Jimmy Sheridan, who also wrote Teddy Bears' Picnic, published sheet music for The Cokey Cokey in 1942.
- It has been suggested that the words "Hokey Cokey" are derived from the cod magic words "Hocus Pocus", which have, in turn, been taken as a sardonic corruption of the words "hoc est enim corpus meum", used during the Eucharist in the Latin mass.
- This has led to speculation that the song dates back to the 17th century, and was originally intended to mock Catholic religious ceremony.
- However, Tabor's grandson claims the words were taken from the street cry of an ice-cream vendor, while Sheridan said they were derived from a Canadian children's game called "Cokey Cokey".