Media Forum: Are web pitches bad for media?(advertising agencies not much interested in online auctions)

Are online auctions beneath the dignity of media agencies, Alasdair Reid asks.

As if agencies didn't have enough on their plates. A few weeks back, we had at least one client admitting what everyone in the business has known for years - advertisers don't pay media agencies enough Sometimes, in effect, they don't really pay them at all.

This admission came in the wake of a curious scandal as Interpublic decided to hand back all sorts of previously undeclared volume discounts to the clients of its media buying agencies.

But there's growing pressure on the system. It would be bad enough if agencies were just facing the prospect of handing back more discount to clients - but this is happening at a time when there seems to be more downward pressure on price. Now we're even seeing pitches reduced to brutal auctions conducted online.

And this isn't just coming from the advertisers who want utility media by the yard. It's also coming from advertisers who want all sorts of clever stuff in terms of communications strategy.

Take, for instance, the shenanigans surrounding the recent pounds 25 million Abbey pitch. The Abbey marketing team was keen to reassure agencies that it wants to appoint a genuinely strategic business partner. And, indeed, the pitch process kicked off with a marketing communications stage where prospective agencies were invited to discuss all sorts of holistic strategic communications goals with the marketing team.

Then the procurement people came in and broke the news that the contract was actually only for one year and that it was to be awarded on price considerations alone. And, oh yes, the rest of the pitch would take place in the form of an online auction.