The death of the media agency

campaignlive.co.uk, Friday, 13 April 2007 12:00AM

The new-media economy is blurring the line between content and advertising, forcing marketing agencies of all colours to rethink their business model. We must change or die, Group M's Nick Emery says.

Media agencies are dated and dying. Creative agencies are "dead men walking". Faced with the opportunity of creating a new-media economy that can change the traditional model from service to partnership, most creative agencies persist in confusing a 30-second spot with a big idea, while most media networks seem happy to act either as commodity postboxes or marginal boutiques.

What we need is a new manifesto for a new economy. One that accepts that media is now a business changer, that the web is a cash machine, and that stunts, pixie dust and 30 seconds don't cut it anymore.

The future needs both industrial scale and imagination.

There is no new or old media anymore; they all blur into one. But at the same time, we need a new and simple lexicon that people can understand, and a new economy to both scale and monetise.

Converting our old currency and language into an updated and easily understood format may help. For example, "new TV" is digital and internet protocol TV, delivering highly targeted and addressable messaging. New TV will provide data on both consumption and, importantly, transaction patterns. "New print" is foldable, organic, LCD, interactive tablets installed with call-to-action video; "new DM" is RSS and pay-per-action; "new radio" is digital radio with the same addressable functions. Cinema equally is moving towards digital, while "new outdoor" embraces mobile and Bluetooth, and so on.

The point is - all media will be addressable and all media will be avoidable.

This has two far-reaching implications for the new model agency. First: you will need the industrial machinery and bandwidth to mine all this new data and consumer information and then be able to aggregate and exploit it. Group M alone placed more than 200 billion online impressions in 2006 on websites, search engines and blogs around the world. This figure is set to double in 2007 and the task of managing multiple data points and extracting value is set to be a key tenet of the new model agency.

Second: you need to own the IP and manage the content, not the blipverts interrupting the stream. Because the new economy will only be about data and content; it's all about IP - intellectual property and internet protocols.

This new economy will continue to mix old and new. The universal drivers will still be communications, information, entertainment, transaction and self-expression, examined from an understanding of cultural history, status, reputation, coverage and involvement. The old feudal system has to go. The tired definitions used by a dying patrician class are no longer relevant.

Equally, the old media model of buying cheap space for clients who then fire you after three years for someone else's cheap space is not sustainable.

Being a middle man no longer works. Agencies need to become "principal" and evolve from a service culture.

The old linear communications model has been replaced. Media agencies are media owners; media owners are becoming agencies, and creative agencies are seeking a new identity.

The competition is no longer the established agency names; the competition is everywhere - talent agencies, consultancies, production companies, digital start-ups and arbitrage houses. As we know, everyone is both our friend and our rival, and success depends on co- evolution.

In this deformed landscape, the new model agency has an opportunity to move beyond the usual conservatism of the leopard and change everything, so that nothing will ever be the same.

This is where media agencies can be the fulcrum of the new world.

The new world has to be about collaboration (or co-evolution). No single agency can cover everything, but the anchor of the new structure combines scale with ideas and marketplace advantage with business results.

Boutiques can't scale; their ownership structure inhibits the logical growth into content creation. Creative agencies are not designed to distribute content, but media agencies can. They have the distribution capability, the media owner relations and the commercial expertise.

The two pillars of the new agency are content and data. Group M has 20 productions in the field, half of these with no client investment - we own the IP. Our latest production, October Road, first appeared in March on ABC following Grey's Anatomy, with impressive figures. October Road was one of ABC's highest-rating premieres in its primetime slot over the past decade. It was the most successful premiere since Primetime Live in September 1994. We also outperformed both of the previous shows in this time period, Six Degrees and Men in Trees.

We have now had two series on air on ABC in the US and have three planned global reality formats in the pipeline. Together with Unilever, we created the first global advertiser- funded programme, Rexona Fans United. This was a 13-part, 30-minute entertainment series managed from concept to delivery and distribution in 40-plus countries in six months. More recently, we created the first joint media, sponsorship and content deal with the TV channel E!, again in more than 40 countries, covering co-production and content licences.

We couple this with WPP investments in The Weinstein Company, the online gaming company Wild Tangent and, most recently, MRC. MRC funds films and television programmes as well as a spectrum of mobile and broadband properties.

MRC's recent properties include Bruno, Babel, The Tourist and Sleuth, as well as upcoming broadband, mobile and film projects from Todd Field, Seth MacFarlane and Larry David.

WPP has first look at all brand integration and sponsorship opportunities in and around MRC's film and TV properties. Group M Entertainment will co-fund and co-produce scripted and unscripted shows.

This is a new model for both Hollywood and our industry.

When we talk about IP we are also including sports, cause, partnerships and consumer-generated content. The role of the new media agency here is not to badge and sandwich break bumpers around someone else's content, but to create and, if not create, to aggregate, monetise and recommend to a wider audience. Modern media agencies are in a unique position to work with sports and events rights holders, determine the new revenue streams and partner in that success. We can identify the opportunities - whether they're new digital revenue streams for established events and rights holders, new events, causes or new media formats and bring together consumers, partners and rights holders.

We have achieved this with a radically different talent pool to the orthodox norm. Group M has not hired a "media" person in a senior position for more than a year. We have hired studio and production expertise, new- technology leaders, business science experts and digital mutants. Our traders have become experts in transaction, our business leaders in the language of the boardroom and our planners, contextual chiefs. A belief in IP has driven this.

Shared IP ownership or full brand- neutral IP ownership addresses the servant-master service model. Agencies need to put their money where their mouths are and invest in IP ownership. By doing so, we become partners in success with our clients, not a commodity supplier nor a marginal stunt merchant.

Producing the content, however, is only half the story at best. We have seen numerous failures with companies producing glorified 30-second spots with no guaranteed distribution. The new model invests in IP as a business not as a 30-second variant, and the ability and skill to distribute content is fundamental.

Agencies need the scale and machinery to disseminate and monetise content. Media agencies need to create a new currency based on IP ownership. Successful media agencies will evolve and change into studios. Creative agencies will be part of the creative process but the "money men", the IP owners, the fat, cigar-smoking bosses, will be the media networks.

The other side of the coin of the new studio is data manipulation, arbitrage and aggregated behavioural targeting - using all this addressable data to change the way we target and match content and messaging to deliver incremental sales.

At the moment, most clients lay out between 15 per cent and 30 per cent of their marketing spend on paid-for media. The rest has to go to Wal- Mart and retail partners. When we address the message and, either via "new TV" or "new press", solicit a sale, we become a new form of retail shelf space. This moves agencies away from being an unaccountable cost, to being a commercial ally.

Our job has become to create new revenue streams and new distribution channels. When we do this we become real business partners and begin to address some of the fundamental concerns of our clients, from strong and new competitors to changing customer profiles; pricing pressures; redefining the value chain; brand and product focus; awareness, decreasing customer loyalty; shrinking markets and trust and perception issues.

This is a new world and progressive clients understand that the old linear model is failing. Changing the game with full or part IP ownership, together with a commitment to data management, moves us from service to partnership and from commodity to principal.

For clients, this delivers what our jobs really boil down to - fame and money - and we do this by updating the old language of CPMs into a new currency and fusing it with the spirit of Hollywood.

- Nick Emery is the chief strategy officer at Group M Global.

THE NEW MEDIA ECONOMY MANIFESTO

- Keep it simple, a new digital taxonomy for old: new TV - digital and IPTV; new print - foldable tablets; new DM - RSS (although all media will be direct). It might be 50 per cent TV, but it will be 100 per cent digital. Accept that it all blurs and overlaps - life is no longer linear

- It's a new economy, but with the timeless drivers of communication, information, entertainment, transaction and self-expression

- Industrial data management of addressable media sits alongside content, product and character-creation at the heart of the new agency

- Put your money where your mouth is and put your own money into IP - intellectual property and internet protocol

- The network is the distribution wing of the "media agency as studio" - Trading moves towards transaction, with content as currency

- Planners become business consultants

- Ambiguity is the constant - old and new co-exist. TV ratings in the US are rising but, at the same time, 80 per cent of teens can't name the top four US networks

- The power law and the paradox of choice still hold true. There will always by big stars, big shows, big networks and big sites; herd mentality will continue to ensure the devil shits on the biggest pile

- The new agency combines intellectual and brute scale as the new client re-engineers away from marketing silos and sees their budget as a VC fund not a media spend

- Using hackneyed buzzwords will mean automatic excommunication

- "consumers will have more control", "digital is at the heart of everything we do", "insights will be key", "we need to move from interruption to engagement", "blah, blah, blah". The new agency will focus on results not self-serving rhetoric or old rules

- Ethical minds - authenticity is a big theme; both authenticity of the message and of the creators of the new fused medium-and-message parcels

- New remuneration models based on ROI, a share of the upside, sales, arbitrage, product development revenue and equity stakes

- Old turf wars are redundant - this is not a fight for dated service dollars. Only a few can combine might and imagination to play in the new world. But if we play together we will all be richer and happier.

This article was first published on campaignlive.co.uk

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