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Do agencies hold too much power?
Will advertisers suffer from Omnicom Media Group’s decision to pull all ads from Channel 5, David Benady asks.
The decision by Omnicom Media Group to pull all its clients’ advertising from Channel 5 for the last six months of the year has once again raised the question of whether media agencies have become too powerful.
Three buying groups control nearly two-thirds of the UK advertising market, and their stranglehold is spreading to online and mobile markets too. These groups regularly pull their advertising from media owners, either to gain preferential rates or to play one broadcaster off against another.
OMG’s advertising blackout through its central buying house, OPera, will keep up to 90 of the UK’s top brands – including McDonald’s, Renault and The Co-operative – off Channel 5 during its busiest, Big Brother-led period.
The dispute has raised fears of what can happen when the now centralised buying unit ride roughshod over planners and clients’ interests.
OMG’s recent move has been widely interpreted by the industry as the likely result of agency over-trading, with the group getting its numbers wrong and failing to spend enough money on ITV to honour its agreement with the broadcaster.
Philippa Brown, the chief executive of OMG, flatly denies such speculation: “That is not the reason we have entered into a groundbreaking partnership with ITV. We put our clients first and evaluate all potential deals versus the needs of our clients. The deal with ITV ticked all the boxes.”
The development marks the latest in a string of advertising blackouts ordered by media agencies. Last year, WPP’s Group M very publicly fell out with Channel 4; in 2012, Havas Media had a spat with Channel 5 that resulted in 12 clients being off-air. And many lesser-known disputes happened in-between.
Group M controls 35 per cent of UK advertising, while OPera and Publicis Groupe’s VivaKi control about 14 per cent each. Richard Dunmall, the managing director of advertising at Bauer Media, is not overly concerned, believing the role of agencies were undervalued until the explosion of digital changed everything and gave them the recognition they deserve at the top table with clients.
So, are agencies unfairly bullying media owners?
Shulman’s Vogue bucks trends to remain on top
Vogue’s editor of more than two decades tells David Benady how the magazine has remained high-end while widening its appeal.
Lives: Queen’s Park, London
Family: Son (19), boyfriend and two step-children. Father is the late theatre critic Milton Shulman
Favourite media: Radio 4’s Today and The Guardian
Desert-island luxury: iPhone music
Alexandra Shulman brushes the hair out of her eyes and looks into the camera. The woman who has arranged for fashion’s top photographers to shoot some of the world’s most glamorous women – from Kate Moss to Victoria Beckham – is the one in front of the lens today.
She takes to the Campaign shoot like a consummate professional, careful to point out that her hair “naturally sits over my eyes; it’s just how my hair is”. Shulman is wearing a black lace Dolce & Gabbana dress and Christian Louboutin sandals, while one of her wrists is adorned with bangles that hint at a sentimental side.
“These bracelets have been on my wrists since I was about 20,” the 56-year-old says. She never takes them off in case they get lost: “This one is just some crappy Camden Market bracelet that was on my wrist when I was at Sussex [the university she left in 1979]. A boyfriend gave it to me.”
Shulman has been at the helm of Vogue since 1992. While other titles have faced steep declines in circulation since the downturn of 2008, Vogue – which launched in Britain in 1916 in the midst of war – has held up well. Its ABC figure for July-December 2013 was 201,000, down from 220,000 for the same period in 2008, but far more robust than the wider market.
The September issue, inspired by London Fashion Week, will be the biggest in the magazine’s history, with more than 460 pages, including 260 pages of ads. Vogue is on its way to publishing 1,900 display ad pages this year – the most since 2008, when it had 2,300 pages. Ad revenue is up 7.3 per cent on last year.
So how has the editor managed to keep Vogue at the top of its game – and herself in charge of it – for so long? “I don’t know. You would have to ask my boss,” she says coyly, adding: “Luck.”
Self-deprecating, maybe, but being down to earth in the era of Anna Wintour has not be a smooth ride.
After she became the editor of Vogue 22 years ago, Shulman ran an edition dedicated to “cash and trash” and the high street. “The industry was just going: ‘Oh, she’s ruining Vogue, she’s taking it downmarket.’ And 22 years on, they may be still saying it,” she says mischievously. But this doesn’t worry her. “They’ve got used to me. I’m the devil they know.
“I think that Vogue itself and the idea of Vogue are as a kind of luxurious object that people treat themselves to. It is a view into a world that people are intrigued by and, in many ways, let’s them see something slightly other than their daily lives.”
The magazine spends heavily to maintain its high production values, with top-quality paper and beautiful binding, and featuring the best photography, models and clothes. “The fashion shoots are really works of art,” Shulman says.
She has been instrumental in broadening the appeal of the magazine, which is said to be read by women aged from 16 to 80, while serving a core of industry fashionistas, for whom it is a must-read. You can see how the hard-core fashion crowd might have clasped their cheeks worrying about its direction.
One move was the launch of Miss Vogue in 2013, attached to the magazine twice a year. This attracts teenage readers, and is bought by both mothers and daughters alike.
I think Vogue itself and the idea of Vogue are as a kind of luxurious object that people treat themselves to
Then there is the Vogue Festival, which is in its third year and is a hit with the fashion industry, Shulman says, as it wants opportunities to get closer to the public. And, in September, Voguewill host its sixth annual Fashion Night Out in Oxford Street and Regent Street – a “celebration of shopping and style”.
A pressing matter for Shulman right now is the brand’s digital presence. Its website attracts 1.9 million unique users (according to Google Analytics figures for April-June) and ad revenue for the site is up 50 per cent year on year. Vogue also has two million Facebook “likes” and nearly as many followers on Twitter.
The iPad edition, which was launched in 2010, gets about 10,000 downloads a month and a digital interactive edition is to be unveiled on mobile this autumn.
Shulman recognises the importance of digital, though concedes there is a delicate balance that has to be struck between featuring “click bait” and retaining the brand’s high-end values: “There are personalities who drive huge traffic online, but that doesn’t mean people will buy the mag. Somebody like Rihanna or Miranda Kerr is hugely popular with our online audience, but doesn’t bring the same degree of engagement as somebody in the magazine.”
A big question is how luxury and fashion brands will adapt to advertising in the digital world while maintaining their core brand values. Shulman says they are unsure of how people will consider their online ads, which are “a tiny drop in that huge ocean”.
“What I’ve been struck by is how much chat there is about the future being online, then actually how little money there is following that chat,” she says, voicing the concerns of many of her fellow publishers today.