Global Media Agency Structures
August 11, 2008
An ANA member requested benchmarking on the question of whether ANA members have implemented a centralized hub structure in the "EMEA" (Europe / Middle East / Africa) and "APJ" (Asia-Pacific / Japan) markets.
This benchmark was sent to the members of ANA's Advertising Financial Management and West Coast Financial Management committees. Fourteen members responded. The majority indicated that they didn't have a structure of the sort described. At least two members from the pharmaceutical industry noted that this setup was impossible, given the nature of their business. However, at least one other pharmaceutical industry member answered the question.
Complete responses can be found below.
Member Response #1
Unfortunately, being a regulated industry (pharmaceuticals), we do not have the volume/scale to use this type of system. Sorry I cannot help with any input.
Member Response #2
We do some of this in Europe but not quite sure how it works...there is a central agency for Europe and then individual agencies for each country. We are currently exploring whether there are media synergies to be had by negotiating global deals/combining dollars. What we have found so far is that there is very little opportunity - very few media owners in common on the global front.
(NOTE: The member also contacted someone else in her company, who provided the following amplification.)
Member Response #2a
The member's European colleague wrote, "I am delighted to receive your benchmark request...as I believe benchmarking is a key activity to ensure competitiveness. However, we do not use this kind of center [for] our media activity. The strategy is centralized for Europe but the implementation of the strategy (planning and buying) remains local. Even if we start to negotiate some European deals. But we can have a call conference about our activity if you wish."
Member Response #3
- How many support centers do you have in each region - and why?
Regional and local management.
- What are some pros and cons of this structure? (Examples: How do you ensure that a centralized support center has the same in-market expertise that a local media agency has? Legal issues, language issues and other cultural barriers, agency cooperation - or lack thereof.)
Pros are local management is closer to the source and cost efficiencies for local buying and Regional support on strategic activities.
- Did the cost efficiencies outweigh the cons?
There are benefits for both.
Member Response #4
You're stretching my knowledge but I do know Latin/South America; Eastern Europe. Not North America, CIS, Western Europe. Asia/Pacific - don't know.
Member Response #5
Sorry - we do not utilize this type of structure, so I would not have any insights to share.
Member Response #6
We are very early in this process. Don't think we will be of much help.
Member Response #7
At this time, my group is barely touching the surface on global Media Agency structures.
Member Response #8
We have one media buying firm across the globe. And therefore, I don't believe I can help.
Member Response #9
This company said it doesn't do this with media buying/planning right now, but that generally speaking, its overall business practices are trending in this direction.
Specifically, the member wrote: "While I don't have an enormous amount of experience in media buying in particular, I have a lot of experience in implementing ‘global' suppliers (creative, ad agencies, PR, Direct Marketing). We are looking more and more to suppliers that have global, in region, reach or at least a company that has true network of partners that have same processes but can leverage from the structure & process efficiencies of a global company while obtaining the regional nuances, knowledge, practices of the in region network."
Member Response #10
We do media planning and buying in each market. I have not seen any benefits of trying to do things centrally within a region or across markets. China and Taiwan are two separate media markets - a bit like Shanghai and Beijing - so I would not centralize there. Depending on the brand's consistent positioning and values across markets, you could plan centrally and buy locally but buying centrally when most media are local is not intelligent. There are regional media in every region but these will generally be a minority of overall media spend e.g., DSTV in Africa is regional but you'd need significant local TV to ensure campaigns have the weight you need in Nigeria, Ghana and Cameroon.
Europe is 30+ countries each with their own language and legal systems - plus local protocols. Tough to centralize buying. Latin America is easier as regional media is bigger relatively than other regions. APAC is not really a region and is very different between South and North Asia - especially Japan and Australia.
I would not support a centralized planning and buying model with no local input. Agencies are not set up this way either.
Member Response #11
Currently, we are not set up with a regional structure for media which is what the member is seeking. Therefore, we would not be able to provide any assistance in this case.
Member Response #12
We actually have a local media management structure, which means that we have Media Managers in the local markets managing a local Media Agency, so we would not have input into "support center structures." N.B.: Member later clarified that her company had no plans to change this setup.
Member Response #13
We do not utilize a global media agency network.
Member Response #14
1. How many support centers do you have in each region - and why?
Answer: I've experienced both.
Example 1: One global media agency with a central media director but a regional footprint.
Example 2: One media agency for EMEA; another for Asia Pacific.
2. What are some pros and cons of this structure? (Examples: How do you ensure that a centralized support center has the same in-market expertise that a local media agency has? Legal issues, language issues and other cultural barriers, agency cooperation - or lack thereof.)
- Single point of contact
- Escalation process [is simpler]
- Clarity in terms of rules and responsibilities
- You can put a structured "SRM" (supplier relationship management program) in place
- Can take longer to get the process in place
- Different time zones can have a deleterious impact, in that executions can be delayed while media managers await approvals from remote offices
- Media managers often feel a loss of control. But note that this perception is not always the reality.
- In Asia-Pacific, account managers have a better sense of drivers. But the European market is so huge that you need a dedicated team.
- No legal issues as such, because everything is in the contract.
- In Latin America and Japan, buys are more regulated than elsewhere.
Cultural / Language Issues
- For ads themselves, no issues as such, because these aspects are usually handled on the creative end, rather than on the media-buying end. The creative agency makes the necessary adaptations.
- Transparency and cooperation can indeed be problematic.
- You need a very strong governance structure. The governance set-up is critical.
3. Did the cost efficiencies outweigh the cons?
- Yes! For example, in China, overhead is expensive, but labor is cheap. In most of Europe, it's the opposite. You can work to leverage these things.
"Global Media Agency Structures." ANA Advertising Financial Management Committee; ANA West Coast Financial Management Committee, March 2008.