Media agency
Media agencies advise companies on the distribution of an advertising budget in various mass media . They are specialized service providers in the advertising industry .
activity
The daily business of media agencies is the creation of media plans . This means that they make recommendations about the necessary advertising investment levels as well as the optimal placement of advertisements, radio and television spots and other advertising formats in terms of time and location. Depending on the project, there is a target group and competition analysis at the beginning in order to determine the optimal advertising environment. In addition, the media mix , the distribution of the advertising measures on different advertising media, is determined. Media agencies also handle the booking of ads. You negotiate with advertising media about prices, services, discounts, special conditions and book - mostly on your own account - for the customer with the media (media purchase ). Traditionally, media agencies are entitled to 15% of the advertising price, but these days this is almost always passed on to the customer. Instead, a fee is agreed for the media service.
The large media agencies are mostly spin-offs from large advertising agencies , e.g. B. MediaCom from Gray, OMD from BBDO or Mindshare from Ogilvy. The first independent German media agency HMS Hiemstra Mediaberatung was founded in 1972 in Wiesbaden by Kai Hiemstra .
Price calculation and definition of terms
The following terms are used in the process of media purchasing by media agencies from advertising media:
- Tariff gross
- Is the price according to the price list of the respective advertising medium
- Net price
- Is the price according to the price list of the respective advertising medium minus any discounts that the advertising medium grants depending on the purchase volume or discounts specifically negotiated by the customer with the advertising medium. This price level is also referred to as “customer net” or “net 1” or “simple net”.
- Net-net price
- Is the "net price" (minus the agency discount) of 15%. This price level is also referred to as "agency net" or "net 2" or "double net".
- Net-net-net price
- Is the net-net price minus the discount that an advertising medium grants with good payment methods (e.g. electronic direct debit). This price level is also referred to as “net 3” or “triple net”.
Fees or agency commissions and kick-backs
Media agencies generate their revenues through fees, but also through the so-called kick-back . The agencies use their bundled purchasing power to receive an additional fee from the service provider from whom they buy advertising space on behalf of the advertising customer. This kick-back is usually the difference between the price of the provider of advertising services (television, print, radio, outdoor advertising, online, etc.) that is communicated to the customer and the price at which the media agency actually provides the service Provider buys. Due to the competitive situation among media agencies, however, these savings are increasingly being passed on to customers.
This practice was made known in Germany in December 2005 in the course of the ultimately unsuccessful anti-trust application for the takeover of Pro Sieben Sat 1 Media AG by Axel Springer AG. When advertising on private television, according to Springer, there are always secret agreements to the detriment of the client. At the time, the Springer Group informed the Federal Cartel Office that the large media agencies that dominate the television advertising business are demanding and receiving "special discounts" from the television stations. These discounts are "strictly confidential". As was learned in the course of the cartel proceedings, Springer is said to have specified the secret special discounts of up to ten percent of the gross volume and more. The media agencies should seldom pass such discounts directly on to their clients, reported the Süddeutsche Zeitung at the time.
In the meantime, however, most media agencies have to pass these “discounts” on to their advertising customers. Some agencies therefore drive the providers of advertising space into ever higher kickbacks that they do not pass on. This led to the fact that the providers increased their advertising times / space in order to be able to meet the increasing demands of the agencies, with which the prices for the advertising industry skyrocketed. In fact, they received less and less advertising services for the same budget.
As a result, the advertising industry, which gathers in the Organization of Advertisers in the Brand Association (OWM), called for more transparency. A Code of Conduct (CoC) has existed since October 2004 , which is intended to regulate these reimbursements from the media to the media agencies. The advertising industry itself is not innocent of this development: since it preferred to outsource the purchase of advertising space to agencies than to create its own competencies, “agency giants” were formed through concentrations and mergers who were responsible for purchasing a number of well-known large ones Grouping corporations in one house. This made it possible for the media agencies, when negotiating prices and reimbursements with regard to, for example, one of their car manufacturer customers, to threaten that, if the provider does not respond to the request, they would otherwise have fewer advertising spaces for another customer (e.g. B. a manufacturer of chocolate bars) would book. Advertisers who demanded particularly high discounts were given an advantage, while other customers who exerted less or no pressure were disadvantaged.
criticism
Media agencies are criticized, especially with regard to non-transparent business models. Also, especially the large network agencies, are often accused of making media decisions based on maximizing their own profits instead of acting in the interests of the customer.
Ranking of German media agencies 2018
According to RECMA, the largest German media agencies in 2018 were :
| Rank 2018 | Agency | Group / holding | Budget for Germany in million euros |
|---|---|---|---|
| 1 | MediaCom | GroupM | 3,960 |
| 2 | OMD | Omnicom Media Group | 2,996 |
| 3 | Carat | Dentsu Aegis Network | 2,447 |
| 4th | Mediaplus | Service plan , independent | 2,326 |
| 5 | Havas Media | Havas | 2.224 |
| 6th | Mindshare | GroupM | 1,973 |
| 7th | Wavemaker | GroupM | 1.919 |
| 8th | Zenith | Publicis Media | 1,509 |
| 9 | initiative | IPG Mediabrands | 1,256 |
| 10 | PHD | Omnicom Media Group | 1,176 |
| 11 | Vice | Dentsu Aegis Network | 1155 |
| 12 | Starcom | Publicis Media | 979 |
| 13 | pilot | independently | 897 |
| 14th | AROUND | IPG Mediabrands | 753 |
| 15th | Cross media | independently | 607 |
| 16 | Moccamedia | independently | 555 |
| 17th | Blue 449 | Publicis Media | 375 |
Individual evidence
- ↑ Efficient, not effective ( Memento of the original from July 17, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. , brandeins.de, accessed on June 18, 2014
- ↑ W&V: Stop the media agencies gone wild! In: wuv.de. Retrieved November 10, 2016 .
- ↑ These are the largest media agencies in Germany , horizont.net, accessed on January 28, 2020
