Core wants big slice of Ireland €1.4bn advertising spend

MEDIA & MARKETING:The new Core Media group will carry considerable clout in the advertising world, writes Siobhan O'Connell

THE ESTABLISHMENT of Ireland’s biggest media-buying group, Core Media, has raised a few eyebrows among competitors and media owners.

Advertising agencies McConnells MCM, AFA Precision, ZenithOptimedia, Mediavest and Starcom are combining their media-buying activities under the Core umbrella to negotiate deals with media owners. That buying power amounts to €190 million, so Cores clout will be considerable.

Core is chaired by Pat Donnelly, who was formerly a media buyer before launching television station Channel 6, which was acquired by TV3 last year.

The total annual spend on advertising in Ireland is estimated at €1.4 billion but, over the years, media buying has become increasingly centralised. The other big space and airtime buyers are Aegis, OMG, Group M and Initiative/Universal McCann.

Alan Cox, chief executive of Core Media, insists that size matters when it comes to buying ad space on behalf of clients. The bigger the spend, the larger the discount that can be secured from media owners.

Traditionally, when advertising agencies bought space or airtime for their clients, the media owner paid the agency 15 per cent commission, which the agency retained. In recent years, agencies have been handing back some of this commission to major advertisers. To compensate, the media buyers extracted additional rebates from media owners.

The consequence is that media buyers are incentivised to spend more money with the media owner which is giving it the biggest rebate.

One issue which Core Media faces is possible client conflicts. For example, McConnells is the advertising agency for Tesco while Starcom has the SuperValu account. This begs the question how these two competing supermarket chains will feel about Core negotiating for both of them with media owners.

For media owners, what are the ramifications? Paul Farrell, marketing director at The Irish Times, said: “It remains to be seen how Core manages to balance the needs of a broad range of competing clients. In recent years, ad agencies have devalued many of the key services they offer. A good ad agency is not just about driving down price, but offering marketing strategy support to a client.” Joe Webb, deputy managing director of Independent News Media, says: “It means more pressure for us, no question. But in these times, consolidation is the order of the day.”

Niche media buyers insist that size isn’t everything. Graham Taylor heads up indigenous advertising agency GT Media, which recently won the media buying account for Budget Travel. “Negotiating the best price for your client is about skill and personal relationships,” he says. “It’s the size of the client that matters, not the size of the agency.”

Fashion sector needs better show

NOT MUCH sign of the recession affecting Futura Fair, the fashion, footwear and accessories trade fair which was held in the RDS in Dublin earlier this week. Now in its 33rd year, the show had hundreds of exhibitors showing off their autumn/winter wares to buyers from shops and boutiques around the State.

Trade shows are key marketing platforms for many small firms across a range of sectors, but one that is missing is a showcase for Irish fashion designers aimed at overseas buyers.

Amanda Pratt, creative director in Avoca Handweavers, oversees the company’s Anthology fashion range which, she says, has annual sales of €10 million – 80 per cent of which comes from exports.

Avoca spends around €140,000 every year taking stands at 14 trade fairs across Europe. And she believes that, just as the State-funded Crafts Council organises an annual trade fair for the sector, something similar is needed for the indigenous fashion sector. Pratt cites Denmark as a good example of a country which is successfully marketing its indigenous fashion business to overseas buyers.

Each year Denmark hosts one of the biggest fashion trade fairs in Europe, where Danish designers show their really good design and exquisite product. I cannot understand why Ireland cannot do the same thing. We need to export ideas from our tiny market into the world.

Designer Louise Kennedy has a London boutique in Belgravia and another outlet in Harrods. However, promoting her designs to a wider audience does not come cheap. “If you want to put on a 15-minute fashion show during London Fashion Week, you will not get much change out of €100,000. We’re small so we have to be very clever about our marketing spend.”