The UM MENA Point of View

posted by Zubair Siddiqui, Managing Director, UM Dubai

Agency remuneration has always been a sour topic amongst agency management. With revenues dropping , the favorite buzz word these days in the board rooms is “High-Margin-Business” (HMB). 2009 was a water-shed year anyways. HMB sounds good, but do such businesses really exists. The problem is global. In the middle east , slightly more pronounced. There is always someone ready to offer that one-bit-extra for two-bit-less. And when every agencies offering is hardly any different, clients tend to go in for the cheapest.

First the commission era, which still continues. Then came charging for “time”. Followed by charging for “Value” that we create. Each model has intrinsic faults. Because at no stage do you really get paid for what you bring to the table. And the problem is more deep rooted. Media Agencies have never really offered anything more than price. I say… “that’s a great offering” … its never going to go out of fashion. So why go hammer and tongs over ‘value additions”. We’ve started doing what the traditional brand agency does. We call it Comms planning. The traditional  brand planner at the agency now is restricted only to message strategy.  so in effect, we’re trying to take over what already existed anyways.

Then we created the Activation Arm and called it ’Invention Division’. Utter crap…. Event agencies have always thrived and will continue to do so. In any case we outsource everything to them and then try to charge clients ?

We’ve always been about price and i hope we continue to be that way. Agencies have always been about ideas and i hope we continue to be that way. PRICE and IDEAS. two powerful offerings. Lets charge for ideas and not time. Ideas that will make brands. Ideas that will touch customers and   move the products out of the shelves.

If i were to wear the hat of a management consultant and go to clients with the same idea that i brought to them as an ad agency, i am sure that i will get three times the price for the same thing. So what did we do wrong as media agencies? Why would we still get paid less and less while management consultants and other sensible folks around get paid more and more.

The answer… simple… we moved far far away from our core deliverables.   We haven’t really reinvented ourselves and our offering. We’ve done new things… but new things as media agencies and nothing new that wasn’t being done anyways by the so-called traditional agencies.

That’s why we suddenly realized that unbundling wasn’t a great idea. It’s good that media agencies have got their rightful position (away from the fax machine) but are suddenly scrounging for integration. Integration with the same guys we broke away from a few decades ago. And as usual we’ve found some nice 10-dirham words like Interdependence or Asset Integration to back it up.

We shot ourselves in the foot and now it’s hurting real bad. It’s imperative that we re-invent. The digital boom is an opportunity that could be this turning point. Let’s do something about that. Lets re-invent, re-invigorate and strive for great ideas that will yield brand results. Lets charge right after we’ve made sure that the ideas are not run-of-the-mill.