Out of all the great things that came out of Advertising Week Europe last week, my biggest takeaway was the intangible sense of optimism in the face of change. The media and advertising industry moves fast and we’ve embraced the change and the opportunity that it’s brought.
When Ad Week first started four short years ago we couldn’t have begun to accurately predict what 2016’s schedule would look like and God knows what Ad Week 2020 will look like. However in the spirit of "man plans and God laughs" we can begin to place some long-term bets.
The first of these bets is that the term "media owner" will have finally been retired by the industry by the time we hit 2020.
Even today I get a twinge when people use the term. Often now "media owner" gets substituted with "publisher" or "media partner". The reason for this is of course that the term "media owner" has become so broad in what it encompasses that it has become wholly meaningless.
Speaking from an agency point of view it has become a lazy catch-all to describe any supply-side partner from Google, to the Leicester Mercury, to Classic FM. "Media owners" were easily categorised into channels and we built activation teams split into the likes of press or radio or digital display. Forward-thinking agencies have long since understood the digital team is an anachronism and have combined offline and online to develop video teams or display teams, but the job does not end there.
We are facing an exciting future where the media owner and channel economies are diffusing. As a result it will not be enough anymore to tweak our taxonomies. We need to think more fundamentally about how we define the media we work with and start to look at new structures based on our take on the future. I believe that by the time Ad Week 2020 rolls round we will see the following dynamics at play:
1. There will be two supply-side functions which we now loosely term as media owners: "content creators" and "content distributors".
2. In order to thrive, content creators (e.g. ITV, The Guardian, vloggers) will need to find profitable routes to market beyond the confines of their existing medium (newspaper or TV set, etc). These are unlikely to be wholly owned.
3. Content distributors (e.g. Facebook, YouTube, Snapchat, the SSP) will ultimately become the means to reach an audience.
The eagle-eyed among you will claim that we don't need to wait until 2020 and that in fact these dynamics are already in play, and while there is truth to this, they are by no means yet prevalent. Around 50 per cent of media consumption is still analogue and driven by the medium. At Maxus we call this period "peak complexity" as we endeavour to make the two radically different economies of digital and analogue mesh effectively together.
So what are the implications of the shift to 2020?
For today’s "media owners", the smartest businesses clearly understand these future dynamics and are trying to become both content creator and content distributor. Witness the likes of the DAX platform or YouTube Red Originals or some of the current conversations between DMG Media and Yahoo. These are the businesses taking early bets to secure a first mover advantage in tomorrow's bifurcated landscape. By 2020 those that don't get it will be like Canute, left shouting at the incoming tide as it engulfs them.
Returning to my parochial world of the media agency, the implications of these dynamics on the agency model are enormous. The best agencies are agile (the A in our PACE values), and can flex and adapt structures to reflect the state of the market. As a service business we need to be able to access the market in the best way possible on behalf of our clients today but at the same time we need to be gearing up for this future.
At Maxus we are investing significantly in our ability to work with tomorrow’s content creators, ensuring that our business is future-fit in a world where a brand’s ability to be part of an editorial conversation is critical.
Likewise when it comes to working with the content distributors we need to fit for purpose and this is where an agency’s ability to provide its own data solutions will be critical. The content distributors will remain predominantly walled gardens and therefore white-labelling their tech solutions is not an answer. As Maxus and as Group M we will continue to invest significant proportions of our revenues into creating our own proprietary data layers to sit across the content distributors thereby securing real competitive advantage for our clients.
We’re doing this because we want to lead change. We have a real view of what we think the future is going to bring and we’re adapting our business accordingly. In 2020 we firmly believe that the "agency-media owner" dynamic in its current guise that has underpinned our industry for so long will have ceased to exist. On both the supply and demand side those people and businesses that can run towards a brave new world and embrace a reshaped industry will be the ones that win.
Nick Baughan is the chief executive at Maxus UK.