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Any advertiser outside Russia (or even within the country) planning an advertising campaign is always faced with having to choose a supplier. He needs to decide either to use the services of sales houses or to use the services of a media buying agency. Whose modus operandi will be best suited to you?
Here I will try to be completely objective and in any case will not prioritize the interests of any advertising business representatives. My conclusions will be based on concrete facts, which are listed below.
The first thing that is important to understand is the fact that working with a sales house does not alwaysguarantee the best price. Let me explain why. For example any sales house selling TV advertising has a direct customer support department and a department working with media agencies. There is a price for media placement, call it conditionally a “transaction price”, which is equal to $ 100,000 – this being charged by the sales house to the media agency. According to the rules, the agency should sell the “deal” to the client without changing prices, receiving a fee from the sales house to the amount of 10–15%. If the client is working directly with the sales house, he will be given exactly the same conditions – $ 100,000 where 10 –15% is the service fee for personnel employed in the relevant department of the sales house. Another question is that the media agency may want to get more than their normal payoff, but finding a fair supplier is your own responsibility.
The second feature of the Russian media market is a special attitude to “newcomers”. According to my experience, all new brands and advertising providers in Russia are given expensive advertising placement conditions. This is to further have the opportunity to lower the price if the advertising provider starts to bargain. Yes, bargaining is a must in Russia! But of course, you can only bargain when a long period of advertisement placement is required, or a large amount of GRP, etc. If a new brand comes through the media agency and cannot objectively “bargain” because of small volumes of media purchases, the reputation of the media agency can affect the conditions and, as a rule, the transaction price is reduced if the agency has a good reputation with the sales house.
But the general rule when choosing between sales house and media agency is that your choice depends on your particular situation and on the specific scale of your business. The more ambitious your targets are, the more profitable it is to work with a media agency. If your targets are minimal, working with a sales house may be advantageous.Your task is to launch a campaign using one media channel? In this case, the best option is to work with a sales house.
You need a large-scale campaign that will span multiple media resources nation-wide? In this case, working with media buying agency can help not only to save time, but also nerves and money.
When planning a campaign you will inevitably run into the problem of lack of information, or the inability to handle it. Russia is huge. In every region, in every city, there will be specific local features which are difficult, but important to consider. Sales houses interested in the effectiveness of advertising can partly help you to achieve your goal, but a sales house can never be 100% objective in choosing the media channel, as your goals are not the same. Your aim is to find the most suitable channel with the target audience for your product, rating and price. At the same time, an exclusive seller is interested in selling his own resource, not someone else‘s. Thus, if you decide to stick with just one sales house, you cut yourself off from other information that might be interesting and useful to your business.
Media buying agencies know all the twists and turns of working with sales houses.
They are able to competently choose who to buy from and have the most complete information about the carriers.
Ready to partner with the specialists in Russian marketing and advertising?
About the Author
Vadim Tylik – Russian entrepreneur, Founder and President of the RMAA Group. Vadim helps foreign companies to develop and implement marketing strategies in Russia and CIS region, create performance based media campaigns in order to expand more effectively on the Russian market.