SPI REPORT
About The Media Buying Partner Agency System In The Japanese Media Market
The Fair Trade Commission has proposed that advertisers check business practices and improve transparency in securing dealings, increase the effect of the advertisements, and raise cost awareness as mentioned in the ''Inspection report: Realities in Advertising Industry Deal''h article published last November.
Since the appearance of this article, SPI has had several requests from our clients regarding work sharing optimization and payment system optimization consultation with agencies in the Japanese media market.
Here is an example of one of our consultations on the media buying agency partner system.
Compare the AE system with the AOR system regarding media planning and media buying
| Brand AE System | AOR(Agency of Record*) system | |
|---|---|---|
| Pros |
Easy for advertiser and agency to handle execution of both the creative and the media buying thanks to one agency |
Improves chance of making the best creative and enables the purchase of medium at the lowest price In case of one AOR per medium, agencies can pursue their strengths in any way they choose, sensing no unfairness regarding agency selection |
| Cons |
Difficult for advertisers to buy the best medium because they must select the media buying agency using creative pitch In case several agencies take charge of each brand the scale merit will decrease because of varying media costs incurred by agencies |
Takes time to regulate each agency role clearly in advance for both creative agency assignment and media buying agency assignment Possibility of discouraging agencies rather than encouraging them to offer the best creative and be selected as the creative agency. Agencies can not offer the best media price and be selected as media buying agencies because their income source is mainly based on media commissions |
*The AOR(Agency of Record) system:a system consigned to one agency that crosses brands for media buying even when there are two or more brands.(It is possible to select agencies to buy each medium.)
When the media buying partner agency system in the Japanese media market is examined, it should be noted that it is influenced not by media buying agencies but by creative or PR agencies, because these agencies' income is based on their media commissions.
In addition to the AOR and AE systems, there are several ways to consolidate media buying agencies, for example utilizing the 'Central buying system', 'assignment by area', 'assignment by Product' etc. However each of these also has pros and cons.
SPI provides efficient consulting solutions for many clients concerning advertising and other issues, including examination of the media buying partner agency system.
Author: SPI
Please contact us with questions or for more detailed information.
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