The World: Insider's View - Sweden

With online advertising set to overtake TV in Sweden this year, media agencies are facing up to the growing importance of digital, Daniel Collin writes.

In Sweden in 1998, the two industry associations representing advertisers and media in agencies agreed that all discounts and rebates given from media owners to media agencies were to be given to the advertisers. Since then, there have been no commissions, no rebates and no discounts contributing to media agencies' business models.

This has forced media agencies to develop from a basic planning and buying offering to one built around communications planning and business consulting. This, in combination with the total change of the media market, has flattened the borders between advertising, media, PR, web and brand agencies.

Meanwhile, procurement people are trying to play a larger role in the industry. If their role is to save money, so be it. But when their work jeopardises a company's brand and sales, it's time for the marketing people to recapture the steering wheel.

Unfortunately there are procurement people who believe it is possible to fly a brand to faraway destinations with half as much (or diluted) fuel than what was needed before. In this context, advertising cannot fly - and when advertising doesn't fly, growth does not take off. Audit companies, on the other hand, do.

However, this scenario is potentially set to change. This year, the internet's share of ads is expected to overtake TV's for the first time here.

When media agencies were born, in the late 70s, there were only dailies, magazines, outdoor and cinemas in Sweden. Morning papers, especially regional, have always held the greatest share of marketing spend and commercial TV has held a strong position. That is until now.

It is the growth of the internet - specifically digital communication - that is poised to give back the initiative to marketers and agencies. Creativity will again come to the fore, and econometrics will demonstrate what works, removing the current emphasis on procurement.

As a matter of survival it is vital to re-organise to be prepared for the future. It is clear all media will be digital, and that consumers will buy into the digital world startlingly fast.

In response to this, Mediaedge:cia Sweden has already implemented digital into all our specialist units. The TV department handles web TV, the radio department handles web radio, the print department handles newspapers' websites, and so on. Internet specialists then focus on overall web strategies, viral, social media and mobile.

Digital has transfused all media. It has developed from being one medium to being intrinsically linked to all media. Agencies must re-organise themselves to reflect this. For agencies not only to survive but to seize the initiative and prosper in the digital world, all departments need to go digital or they'll go bust.

- Daniel Collin is the chief executive of Mediaedge:cia Sweden and the deputy chief executive of MEC Nordics.