Brokering the Best Time1 Jun, 2008 By: Thomas Haire Response
Response's Editorial Advisory Board and other media experts clash over the role and influence of media brokers in today's DRTV marketplace.
Throughout the history of direct response television, perhaps no word sets the media part of the business more abuzz than "brokering." From media buyers to media outlets to the brokers themselves, it seems everyone has an opinion on the value of these "middlemen" who control a sizeable portion of the TV media time available to direct response marketers.
In recent months, the Response staff has noted that the long-standing buzz about brokers and their place in the business has grown a little louder. Why, we wondered, is this becoming an issue again?
As we often do at Response when we wonder something, we turned to our magazine's Editorial Advisory Board with a brief set of questions about the brokering business. At the same time, for this second quarterly edition of the 2008 Editorial Advisors Forum, about a dozen of the leaders from the industry's top media agencies and brokerages were sent the same questions. While response rates varied — surprisingly, the brokers were not quick to grasp at an opportunity to set the record straight in this ever-swirling maelstrom — we received a solid group of opinions from the industry leaders queried.
Is the media brokering business expanding and, if so, how is it affecting the DR buying space?
Maria Eden, Direct Response Media Inc.: From an agency perspective, the re-emergence of the brokerage business has had a negative impact. With today's economic environment, media buying services have to work harder negotiating rates and time periods, as well as in the buy management of client programs — resulting in lower profit margins. When media costs continue to increase while, at the same time, viewing audiences diminish, adding a "middleman" to the buying process inflates cost to clients.
Brian Fays, MTV Networks: We strive to work directly with the clients or agencies of record (AOR). This process puts the correct value of the inventory in the proper hands and allows us to have a direct dialogue with the clients to get the most accurate read on their ROI.
Tim Hawthorne, Hawthorne Direct: The expansion of brokers has made it difficult for agencies to secure new time periods on many cable networks for several years now and inflates overall media rates. A majority of networks sell their inventory on an incumbency basis. Few agencies or brokers are willing to surrender their rights to time periods that have proven successful for either their own shows or those of other agencies, which buy the time on a second-hand basis.
Toni Knight, WorldLink: I'm not aware of media brokering expanding, and, in fact, over the years, WorldLink has gained a number of our accounts as a rep firm specifically because media operators have become increasingly aware that brokering limits their ability to retain 100 percent of the revenue generated by their own inventory. Control and accountability are of great importance to media platforms and networks are better off if they know who exactly is buying their time.
Peter Koeppel, Koeppel Direct: Brokers and buyers are essentially competing for the same time. This bidding by both the buyers and the brokers gives the stations the false impression that there is more demand for their time in the marketplace than there actually is.
Fern Lee, 25-year DRTV Expert: The biggest challenge with brokering media is uneducated marketers. When a marketer allows multiple agencies to buy for them without any parameters, it causes rates to increase. More brokers are buying up inventory without having a client to assign the media time to.
Rob Medved, Cannella Response TV: The number of brokers and the number of avails sold through brokers has been in decline for the past decade. What has happened is the emergence of many small agencies, each vying to manage a piece of a marketer's budget. Many of those agencies evolved from brokering.
Richard Stacey, Northern Response Intl. Ltd.: In the Canadian marketplace, brokering is less common. Some American clients will use brokers when they want to air in Canada, often requiring a premium to pre-empt an existing agency to air a specific timeslot.