After spending years on the sidelines, media agencies are now charged with helping advertisers navigate the increasingly complex media landscape. At the same time, the industry is faced with significant challenges: losing specialized staff to vendors, ensuring they are properly compensated, and clients just not spending like they used to. In this Marketing roundtable, some of Canada’s top media minds discuss these issues-and why media is still in a pretty good place in this country.

CHRIS POWELL, MARKETING: There have been suggestions from people on your side of the business that there are still clients out there that don’t “get” media. Do you think that’s the case, or is it gradually transforming?

FRED FORSTER: I think the consumer packaged goods clients have been the first to really embrace media. They’re very into differentiating their brands in the marketplace. They think very deeply about all aspects of marketing. There’s a really interesting dynamic going on in our space in that, philosophically, everybody believes creative and media have to be close together. It used to be creative and media were together, in the same agency. There’s this ill-advised movement going on now where creative agencies believe they need to bring media back in-house in order to create that dynamic. I fundamentally believe that’s a backwards step, in the sense that when media and creative were together in a creative agency, media was subservient to creative. It was very much creative driven, and the media guys came in when the 30-second spot was produced and figured out how many GRPs you could deliver. I do think media and creative have to be close together, but you have to have equal footing in terms of bringing strategic ideas and media innovation to the table.

CAROL-ANN KAIRNS: My experience is different because BCP is a full-service agency. We live with creative, and I agree that when creative and media are in the same agency, the tendency is to say ‘Well media is a service of….’ but I think that trend is changing as well. In the last year, myself and Thomas Lecordier were named co-managing directors of the agency. It’s the first time there has been a media person at the head of a full-service agency, and I think that speaks to the emergence of media and the role it’s taken in the communications plan. Yes, maybe it’s a step back to the old model, but the old model has to be changed to become the new model, and we have to find a way to live together.

FORSTER: There’s a real balancing act that goes on now, and a lot of discussions and strategy around communications. You’ve got PR and experiential agencies, you’ve got the direct group and you’ve got a digital team and all of a sudden everyone’s at the table and everyone wants their piece and everybody thinks their discipline is the number-one discipline. But often it’s up to the media agency to disseminate all that stuff and have a good idea of what’s the best way to communicate and engage that consumer. That’s why it’s important for media to have a voice: if we have a strong voice and a strong recognition with the client that we bring expertise and leadership, it’s easier for us to provide some counsel as to what the right media mix is.

MARKETING: At Marketing Week last year, one of the members of the agency CEO panel suggested media people haven’t taken ownership of the role. Would you take umbrage at that suggestion or is there some validity to it?

LAUREN RICHARDS: I do think there’s more we can do. One of the things we need in the industry is more leaders. We can achieve a lot more if we had more of the right kind of people. We need well-rounded, driven thought leaders; they need to be creative, they need to be client-service oriented, they need to be able to sell. They need to have the left brain as well, because they have to understand all the analytical applications of the creative application. Those kinds of people are rare. And we are limited by resources in terms of what’s going on in the industry, and not being able to turn the role that media is playing in the industry into a larger one from a revenue standpoint. There is no question we’re doing 100 times more than we were doing 10 or 20 years ago. Our purview keeps exploding, and we are declining in terms of the revenue consideration.

MARKETING: So what has to be done to balance that equation?

RICHARDS: Getting out in the industry and talking about it, and being confident about our abilities and our value, and doing that when push comes to shove—when we’re in new business pitches and we’re in circumstances that are particularly challenging. You have a comparison to the U.S…. a lot of clients assume they can do similar kind of financial arrangements that they have in the U.S. when we have nowhere near the scale. We’re not even a tenth of the scale, which complicates the media structure more in a smaller market like Canada and one that’s influenced strongly by the U.S.

BRUCE NEVE: We kind of did it to ourselves. Everybody put chasing volume as their number-one priority: no matter what it took, you had to grow and get more scale to win more business. Everybody at the outset did it by offering low rates on media and low costs on what they provided, so we kind of got ourselves into this ditch.

FORSTER: Frankly, it’s still going on, but it’s on a smaller scale. We have these legacy agreements that we deal with, where we’re commission-based and working in certain types of media. Of course, now the game has changed so fast and it’s very difficult to say ‘OK, this has all changed, we need to re-negotiate our deal.’ The scope of services in that deal is defined, and at the same time you’re dealing with procurement people. You’re not dealing with marketing people anymore. Because they’ve already bled everything they can out of operations, they turn their gaze to the next biggest cost centre and say ‘Ah, media and marketing, let’s see what I can shave out of that.’ And so now the contract negotiation has been taken away from the marketing group and been given to the procurement people, and it’s very difficult to have a value discussion around media with a procurement person. Nothing against procurement people [laughs].

RICHARDS: Some of my closest friends… [laughs].

FORSTER: They have a job to do and I understand they get paid by reducing costs, but it’s a very difficult discussion. I’m sure many people in this room have, more than once, had to talk about the value of brands, talk about the value we bring over and above placing ads. It’s a combination of things: we got ourselves into a situation where in the chase for volume you give it away, and that doesn’t serve anybody well. What’s happened now is you need more talented people, who cost more money, to do more work than we had to do before and I’m getting paid less. Something has to give somewhere, and generally what happens is you work people too much, they quit, they go somewhere else, or they go over to the sales side and get paid a lot more money to sell ads [laughs].

TIM HUGHES: And they know all our secrets.

FORSTER: It’s a situation we’re all trying to rectify [and] we’re starting to slowly get there. I think a lot of marketers recognize the value we bring. I think the way we do contracts now is much different than what we’ve done before. The way we contract for our work is much different. We’re moving much closer to a creative agency model where we get paid per hour. I think one of the things we’ve tried to do is more tightly define the scope of work. But as media people, we’ve always just gone out and done the work. We do the work and then add it up later and go ‘Oh man…’ [laughs].

HUGHES: We’re having these discussions about ‘What are you willing to give up? This is what’s affordable in this scope of work, and if you want more it costs more. If you want to pay less, what will you give up?’

MARKETING: And how are those discussions going?

HUGHES: Not well [laughter]. It’s the value of it. You put hours against it and you say ‘Is this valuable time spent? You can afford this many hours, how should we spend those hours? Are they best spent doing traditional planning and buying, are they best spent looking into mobile solutions?’ and the client makes those decisions.

MARKETING: So is it just a matter of when you’re entering into these pitches, it’s not just a matter of how low a price can we get this business for, but showcasing creative thinking?

KAIRNS: I think it’s a combination of both. Clients want all the good stuff. They’re not going to say ‘That’s all great stuff, let me give you X amount more.’

NEVE: Not every client wants all the frills… Sometimes a client says they want the cheapest TV buys they can get and away we go. The clients think they want it all until they see how much it costs.

FORSTER: Media pitches today are much more about strategy [and] innovation than they are about price. I think that’s been a big shift. There’s this expectation that the price is going to be pretty much the same across the six or seven agencies… They have a certain idea of what the benchmark is in terms of fees already. Most of the discussion is around the work and ideas, and how you think through a process and all those other soft measures. Then they want to hire you, and then you go talk to the procurement people…

HUGHES: Then it becomes about cost real fast.

KARIN MACPHERSON: And cost is always going to be a big factor. Because of [media’s] pure size on anyone’s balance sheet. It has to be proven, and procurement people have you prove it. So while it is the cost of entry there are still differences there, and I think clients look at that closely. They have to, especially in this economy. We haven’t talked about this economy but…

MARKETING: We’re trying to ease into that one.

MACPHERSON: There’s a lot less money out there. There’s strictly less capital. Any advertiser has less capital than they had three, four months ago, so how they deploy that capital is something they’re going to look at closely.

MARKETING: Since you brought it up. Obviously the bad news [regarding the economy] is rampant, but what kind of impact is it having on your business?

NEVE: I think all clients are being very cautious. We’re having to look at spending, if not quarterly, sometimes on a month-to-month basis.

RICHARDS: Daily now [laughs].

NEVE: The rug hasn’t been pulled out from under us. Clients are still spending, they’re just asking a lot more questions.

HUGHES: Can I cancel, when can I cancel, how much can I cancel? But not a lot of cancelling.

NEVE: We’ve talked about metrics and analytics and it’s more [important] than ever. They want to spend, [but] if they’re part of a global organization, they need to report back constantly on business performance and what they’re getting out of their investment in media. If we gave them quarterly posts before, now it’s more often, especially on the digital side. We have to prove that what they’re doing is actually having an impact in the marketplace.

RICHARDS: There’s a lot of concern about what’s going on, [but] I do think we’re in a pretty good place still in this country… with marketers understanding that spending through these times is usually advantageous—certainly in the midterm. We’re not experiencing any kind of significant reaction or pullback, but there is a lot of reassuring and a lot of working with our partners on the selling side to make sure our clients are getting the absolute best value for their dollar.

FORSTER: We haven’t seen any major pullback at this point, although every day I come into the office I’m waiting for the phone call. What tends to happen is people cut their budgets in their fourth quarters anyway, when they’re not making their numbers. So this year you’re going to see it exacerbated. I think it’s just a fact of the way business is operating in terms of how they try to manage their costs against their profit expectations. It’s a big chunk of money, and it’s easier to pull it out of the marketing budgets at the end. We’ve seen that in the past… but I think this [downturn] is longer and deeper and across every category. I fully expect that we haven’t seen the end of it, but right now people are kind of holding fast. But there is an expectation that you’ll get stuff cheaper. A lot cheaper.

MACPHERSON: And I think that’s hugely driven by what’s in the media. Which isn’t always actually perfectly correct.

FORSTER: There’s always a very tough negotiation that goes on [with media sellers] in terms of price, and a lot of them are not doing very well right now. It’s a difficult situation to try to beat them up on the pricing situation when they’re already teetering. Having said that, I think all of our [media] partners want to bring more value and demonstrate they’re good partners and demonstrate to clients that they should keep investing. I think that’s the spirit of the discussions we should be having, rather than ‘I need it for 50% [off the price].’

RICHARDS: These are your partners, who can help make or break your activities. Whether you’re innovating or whether it’s your cost infastructure or your negotiation, their health is our health. I couldn’t agree more with what Fred’s saying in terms of working through to make sure it’s working for everybody, and our clients are getting looked after and getting everything they deserve. But also being cognizant of the fact there is another business partner involved.

FORSTER: An unfortunate by-product of what’s going on is the elimination of jobs at the supplier level, and a lot of these jobs are coming from new areas that they have recently developed to promote integration, to promote partnerships with media agencies to try new and different things. Because that takes time, it takes effort, it takes bodies. And they had to invest in it as well. They said ‘Well, we can’t afford you guys anymore… you’re gone, we’re going to fold you into something else.’ So I think it’s going to be more difficult for us to manage the expectations of doing those types of things in this type of environment because the bodies just aren’t there, the suppliers just aren’t there.

MARKETING: So are we in a state of stasis right now? Is that the case, where momentum has been stalled?

FORSTER: Our expectations have decreased… More agencies asking for more from these guys, and all of a sudden they have half the staff they used to.

HUGHES: They’re building these departments to respond to their needs [and] now they’re closing them down or shrinking them.

RICHARDS: There needs to be some recognition in the industry too, for accountability and responsibility on the media buyers side as well. I think there’s quite a few people on our side of the desk that expect all of the ideas and the innovation to come from the sellers. You know, ‘Here’s a brief, bring me back brilliant ideas and let me pick one.’

KAIRNS: It comes down to resources as well. We expect that from the vendors because the vendors tended to have more staff. Now they’re living our reality, and this is something new to them, but that’s why we were expecting that—because they tended to have more people to do that kind of work. It all comes down to resources and having the right people on the agency side to do all that work.

NEVE: You grew up in the business trying to prove yourself, get out of the shadows and into the limelight, eager to please and over service; if a client wants an evaluation of a sponsorship or negotiation we’d step in, yet there’s companies out there that all they do is negotiate sponsorships and get huge fees and we just do it as part of what we do. In the last three years or so we’ve started to work our way out of a 40- or 50-year legacy, so it’s going to take a little time [laughter]. We might be handing off the legacy to the next generation that hopefully are in a better place.

FORSTER: As media companies grow more confident in their role in the process, we’ll be more readily able to stand up and say ‘You know, there’s a cost for that.’ I’ve had situations, as everybody else in this room has, where the client has given us the work to do because the creative agency or the other agency has said they were going to charge for it. So it goes to us. [laughter] They ask us to do it as part of what we do.

MARKETING: And so the expectation is that you’re going to do it free.

FORSTER: We obviously want to make sure these kinds of things don’t happen again. But I think it’s a process of understanding what our value is, what is in the scope of work and what’s outside, because the scope of work has changed. I mean it’s changed incredibly, even over the last couple of years.

KAIRNS: And it’s changed because people have given us that opportunity.

FORSTER: Right, so here we are complaining.

MACPHERSON: I do believe we have become much more successful at getting paid for doing those things. All of us have developed sponsorship areas and other diverse services… and over time we’ve been able to model it in such a way to get the revenue back. That’s what has built our business over the years, incrementally. So while the percent fees might have gone down, that kind of revenue stream has compensated for that.

HUGHES: I think the work we’re doing with digital becomes a bit of a game changer because the rules have to be different there and we can’t be compensated the way we have been historically. So you spend time with clients explaining what goes into a digital buy and they get a good sense of ‘OK, that’s not like buying spots on CTV’, so there is an expectance of a higher rate of remuneration on digital work.

MARKETING: When you’re looking for digital expertise, there is so much demand out there, not just from your side but on the vendor side. How is that working in terms of attracting and retaining that talent?

HUGHES: We were having such difficulties finding people, and the people we’ve found were very expensive; we trained them and then the vendors would take them, so we spent most of last year dismantling our dedicated online group and spreading the online knowledge across all the planning teams, so that by the end of the year, every planner would be competent and able to write a plan that includes digital, so that knowledge is not siloed away somewhere. It was not without its pains because we were adding work for people who were already overworked, but everybody wanted to do it because these planners, their world is digital anyway. They grew up in a world that is all digital all the time…All the administrative side that came with it was the nightmare; it became soul crushing for people that every single invoice comes in discrepant. It’s unbelievable. The impressions don’t run the way you think they’re going to run.

MARKETING: And of course the big problem in media is the pay when you first start out is low. Is the allure of going over to the vendor side, where salaries are a little bit higher, too much to resist?

FORSTER: We’re dealing with Gen Y folks, and there is a whole different attitude and mindset in terms of work/life balance that hasn’t made it’s way into the expectations in terms of the amount of work in digital and media. There are some folks who live it, breathe it and love it, and don’t mind spending the time, but we have to be very careful in terms of burning people out. Part of the challenge we have is that you don’t have a lot of talent, you’ve got incredible demands for very low remuneration in some cases, and so the amount of pressure that we put on some of these people is sometimes too great and they look for greener pastures.

RICHARDS: If we want to keep media people in the business, if we want to get the best and brightest, we have to pay them more. Why do we pay them so little to start? They will get paid well when they’re mid-level and they’ll get paid very well at the senior level because there is a dearth of talent. I think things are changing very fast there; on the sales side they have realized they overpaid for their capabilities and are now having to rejig their organizations, not only in terms of capabilities, but in terms of pay scale. Maybe there was something in the business model of media where we weren’t over-compensating in some areas. I think it’s up to all of us to continue to attract the best and brightest and push those salaries up. They are going to make more money later on, why not give some benefit to make sure we’re not missing out on the best and brightest from schools so they are truly capable of being the thought leaders we need for tomorrow?

MARKETING: Spec work has become a contentious issue. Can you speak to that?

RICHARDS: I think the industry has done some very hard work through the ICA and the creative agencies are taking more of a stand than we have, and we need to start taking a big stand on spec work in media pitches. We have been the guys trying to please everybody, and I think we’ve done that too much in terms of the media pitch process. We need to stand up and as an industry, clearly define the rules of engagement and push back when those rules are not being heeded—stand unified on what is right and what isn’t. The amount of work we have to do from a spec media standpoint on [a prospective client’s] specific business—it’s not all media innovation and creativity and ideas. That’s part of it, but there’s a huge amount of communication infrastructure that’s being requested specific only to their needs. You have to understand and learn a whole category, and pull people… off other businesses to fulfil that need, when we have a tremendous amount of work that we’ve already done that we can use in ways that provide absolute coverage of any kind of confidentiality of serious information but understand our work and our thinking and what we can deliver from thousands of cases.

FORSTER: If it’s a decent sized [piece] of business, the expectation is you come in and deliver a full-blown media plan against that business in order to pitch the business; frankly, our people are already as busy as they can be on existing work, so you have to pull out a team—a big team—and basically you want to get the best thinkers in your agency working for weeks and weeks and weeks full time trying to put this together so you can put your best work forward, and in the end all those ideas, for a large part, go out the window. They’re not ours anyway as part of the process. [It’s] a huge commitment in terms of time and energy and effort, because the media business is complex. This is not about going out and buying 30-second spots and pages in magazines, and I don’t think there is a recognition of the amount of effort that goes into putting together a successful pitch or an unsuccessful pitch.

RICHARDS: I don’t know any other business that provides work like we do, for free, to get considered for a paid assignment. There’s no contractor out there that would give the whole framework of the house for free and I think it absolutely has to stop.

NEVE: I agree with everybody. Some of these pitches go on for three months or more.

RICHARDS: I also think there is a perception that media work is not speculative work. When creative spec work is done as a creative product, it’s thought of as spec work. I don’t think when a specific brief is given for their business from a media standpoint, this is spec work for them.

KAIRNS: Because it’s all conceptual and it’s all ideas. Creative agencies actually have something more tangible to show.

MACPHERSON: It’s certainly out of control and I think advertisers really would want to help drive that process, because when they’re pitching or in a review it may be good for them; overall it’s not good for clients either.

FORSTER: Advertisers have to lead the process because more and more of these initiatives are led by consultants. Their job is to make it a big process [laughter]. Once you get the brief or the RFP, you’re either going to be in it or you’re not; at that point you can’t argue and say, ‘Hey, this is unconscionable and we won’t participate.’ Because obviously new business is the lifeblood of every agency, and you have to pitch. So I think it really is an important topic that we need to [discuss] with the ACA in particular, but also the ICA. Obviously the ICA has brought this up as an issue, and I think they’ve dealt with it perhaps better than we have as an industry.