HBF counts the cost of its advertising program

HEALTH insurer HBF has followed the lead of local fast food retailer Chicken Treat in taking steps to dodge the hefty media commissions for its advertising work.

However, HBF’s bid to avoid the costly commissions associated with media buying has drawn criticism from some local advertising agencies.

In the recent tender for the $4 million HBF account, newcomer Gatecrasher picked up the advertising component of the account while the CRM and below-the-line component of the account was assigned to JDA.

HBF marketing manager Lorna McGregor said HBF was looking to expand its CRM activities. This represents a strategic shift for the account.

“My concern is that HBF has a much-loved brand and we don’t want the below-the-line work

to undermine that brand,” Ms McGregor said.

“There is a cross-selling objective but it’s also brand building.”

When HBF’s advertising account was managed out of 303, a dedicated media buyer managed all of HBF’s media buying.

With the change of agency this role has been absorbed into HBF’s marketing department – a move that should side step the costly media commissions charged by full service agencies.

“To be honest we’ve been very happy with our media buyer and she’s just continuing to work exclusively on our account, Ms McGregor said.

Chicken Treat made a similar decision regarding media buying earlier this year with the account now managed by a number of different suppliers rather than a full service agency.

Chicken Treat general manager sales and marketing Kevin Leavy said the media buying was managed by a staff member who planned and booked all the media through Starcom.

“I think that clients are starting to get smarter with their marketing money and marketing departments, Mr Leavy said

“They are taking people with advertising backgrounds … and then they don’t have to pay service fees.”

From the other side of the fence there is some concern that marketing clients are focusing too much on service fees and forgetting about the value of good service.

If a client wants to buy their own media that change will be reflected in the service fee they are charged, according to 303 managing director Stephen Wells.

“I don’t think it’s an issue and, to be honest, what happens with Chicken Treat is not buying media internally, they buy it through Starcom,” he said.

“I think the media is the one who has to have a look at this.”

Other industry analysts are more scathing of a client-driven shift away from agency media buying departments.

The Brand Agency account director Steve Harris claims media commissions are an integral part of agency remuneration.

“I think clients have an obligation to get better value for money, but the way it’s approached by a lot of agencies and clients is naïve,” Mr Harris said.

He also is concerned that the process of media buying is not well understood by a lot of clients.

“Probably the most famous and successful people doing it are Harvey Norman and they’ve got a significant team looking after it,” Mr Harris said.

“And media buying is only one part of the total remuneration package for agencies.”

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