Campaign's Gideon Spanier has written two compelling pieces recently which pretty effectively sum up the need for change in media – namely "The media agency exodus and an absence of industry leadership’, and a pithy piece on the trouble with agency contracts. I’d argue that most media agencies know this already and many are laying the blame for being (nearly) broken at the door of programmatic.
What should have been the most transparent of platforms has become the most opaque. It’s clear that the real problem in the industry is not the capabilities of technology, but rather the business models behind them. Agency tech stacks, or full tech stacks operating under a managed solution, provide a one-stop shop for the translation of briefs into buying.
However, the lack of transparency that this way of working has facilitated is creating a culture of data flow "protectionism" and an inability to fully connect the user journey. Without complete transparency, gleaning genuine business intelligence and true optimisation of the path to purchase is impossible. Joining the media journey from analysis of first party data, through to planning and execution of inventory and crucially, relevant content, is key to future business models for media-buying.
To date, most agencies have not provided this and advertisers have had enough.
The obvious solution is for media buying representation to be deliberately tech agnostic. But this requires bravery and crucially, reduces the opportunities for consistent profit margins throughout. A consultative, rather than commoditised approach is what is needed.
Being truly tech agnostic means working with the clients to identify their specific needs and helping to bring together the requisite tech. This enables complete transparency throughout the connected customer journey. Being truly consultative means analysing, shortlisting, testing and recommending technology for your clients. It’s a world in which the contracts can and should be, directly between the tech providers and the advertiser.
It’s not a strategy that will be welcomed by multi-agency holding companies, but in my recent experience, assuming a mentoring role with clients is working. It’s about being a consultant, not an enforcer.
The digital media marketplace is a minefield of choices, claims and counter-claims. Expertise in the markets capabilities and business models still lies with the media agencies and we can bring that to the table – and charge for it. Certainly the clients I’m talking to are appreciating the prospect of not being tied to trading agreements, kick-backs or any other kind of revenue generation model on the back of clients’ spend. It means we as the agency can be completely nimble and pragmatic in the choices we make with our clients.
Big advisory firms have spotted the opportunity and are making a beeline for the space. This poses an added threat to media agencies, particularly with the various competencies management consultancies can offer. But currently they’re still on the periphery of our world. The likes of PwC and Accenture take on a macro-level view of the crisis the industry finds itself in. They don’t yet have the decades of ‘coal face’ experience that is needed to fully understand the make-up of the complicated media landscape, but the skill drain from the agencies will mean that this will not last for long.
A war of expertise is about to unfold, and we as media professionals need to capitalise on our sector knowledge if we’re to get ahead. Adopting a consultative approach is the first step. It will be painful. Reconfiguring an agency model is no easy feat, but making the transition will be absolutely essential to keep digital advertising’s place in the media mix.
When it comes to our bread and butter – the art of programmatic – the new media agency model needs to be based on understanding and recommending tech stacks, not selling proprietary tech. For the tech stacks, they need to move away from a percentage of the adspend and offer a truly transparent, software as a service-based model.
And the result of this? A free, open and honest process that delivers complete transparency and enables media campaigns to reach their full potential.
Media consultants, on the other hand, will no longer have to work in silo. Never again will they have red lines struck through their media plans because they don’t fit with the trading agreements. No longer will they be accused of acting in an untrustworthy or untransparent manner. Instead, they will be valued and appreciated by their clients.
What we’re really doing is empowering advertisers to play a far larger role in the decisions and objectives of the digital media strategy. It’s a world in which we’ll be bringing the planning and buying functionality into clients’ existing team structures, allowing for an unparalleled understanding of business needs and priorities. Complete transparency allows for genuine trust.
Obviously there’s a fall out to this.
Media agencies have become so profitable that any sign of reversal would critically impact their profit margins. But pursuing this approach will only lead to a dead end – analysis of money in and money out is simply not enough. Adopting a consultative approach helps advertisers achieve the Holy Grail: optimised work flow and higher campaign efficiencies.
Duncan Trigg is managing director at Oliver Media