Saturday, 4 July 2009

Penna/Barkers - bad times but what next

There is no point in try to summarise this story here - the Ri5 press releases and comments section gives the full picture but i really believe that it has long term seismic repercussions for the way the client/media/agency relationship works in the future. So my views and associated comments below

1. Its proof that the bad guys are not just the bankers/MPs etc. The actions of the Barkers board have to be highly questionable - the act of giving people redundancy payments and paying up notice when you had absolutely zero intention of fulfilling these promises takes some doing. I would like to think most of us would have struggled with those actions if we were ever in a similar position. Still they appear to have kept jobs/pay offs so that's OK then. Oh - and everyone has lost their pensions. Don't think its right to attach significant blame to Penna here but lets hope they can help.

2. The media have taken a bath - i have had figures quoted to me of £1million + from 2 media owners and many £100,000s with at least 10 others. The small media owners who have relied on this money coming in will be absolutely devastated - lets hope there is not a knock on effect. History tells us that there will be nothing left in the pot from the administrators when taxman/banks have had their money.

3. So why give agencies media commission? This is a little counter productive for OME (as we make income from this) but i am really not sure what the media get from offering agencies this discount. The reasons historically were
- Guarantee that you are going to be paid (NPA recognition and most agencies have insurance if clients go bust) - that guarantee is not looking too good after last week.
- Agencies are a channel sell - gives media the ability to sell to many clients via one point. OK - Stop Press - having worked on both media and agency side - i can confirm that most agencies cannot sell there way out a wet paper bag. Sure they could sell a Sunday Times advert for the last 20 years (but not now) but they have been useless at selling online or indeed any innovative launch - so i really do not believe the channel sell argument (unless you are must use/habit bought media).

4. The old agency model is dead. Media commissions wont ever again fund big teams of managers without revenue responsibility - everything an agency does and adds value to a client needs to be charged for and billed. The old model was horrible as it hid all the charges for the brilliant creative work/account mgmt/planning and buying and gave these away as free or nearly free as the cash could be made by over the table and under the table media deals.

The new model can work - sorry to blow our own trumpet but we are up year on year - our billing is completely transparent and i am proud that in some areas we are stupidly cheap and in some expensive to use (depending on how much work is involved).

But best to end this by sending best wishes to the ex Barkers staff and the media owners affected.


Chris Skinner said...

Interesting thoughts above. Agree that the demise of Barkers could signal the end of the commission model and, like you, think that would be a step in the right direction.

Transparency has to be the right way to do business.

Anonymous said...

I was one of the many made redundant by Barkers and not paid off. One thing that would help many of us is to know that the individuals who behaved so callously are not going to get away with it. If media and clients refused to deal with Penna while the old Barkers SMT are involved, I am sure the guilty parties will become pariahs with nothing to do but stay home and count their share of £8.6 million.

domsumners said...

Dear Anon - i have complete sympathy with you and i have been taken ababck by the relatively meek short term reaction by the media - i cannot believe they will not react in some way to this. Just to make clear i think the Barkers mgmt behaved disgracefully by not just steering into ship into the iceberg but chucking the women and children off the side and manning the lifeboats themselves.