If the traditional media agency model, which largely focuses on paid media, is broken, what does that mean for others in this space?
UM CEO Mat Baxter recently announced a shift in its business model, which sees it not only continue to focus on paid media, but to instead up its focus on owned and earned media.
By shifting to this new “Creative Connections Agency”, Baxter says this positioning and entire company reorganisation (involving new software and job roles) away from traditional channels towards earned and owned media is the best way forward.
“It's time for media agencies to get off the paid media drug”, Baxter said.
“If you don't evolve and look at new and different revenue streams then you will become extinct.”
Baxter, who said he now just wants to crack on with the job in hand, also referenced 'Marketing Myopia', a marketing paper by Theodore Levitt, which was published in the Harvard Business Review. Levitt argues that to continue to scale, companies must ascertain and act on their customers’ needs and desires and not bank on the presumptive longevity of their products – which in this case is paid media.
There's been a lot of industry talk on the agency's shift so we caught up with CEO of independent full service agency Match Media, John Preston, to get his views on changing the traditional agency structure, to look at how his business has changed, and to see if plans were afoot for any framework shifts his end.
Preston, who was also founding partner and media director at Whybin TBWA, Sydney, said Match has evolved from a communications strategy only business in the early years to become a full service media agency three years ago.
Preston said he is proud to have media in the brand's name and that the company sees the word media in its broadest sense, not just paid media, but every touchpoint from consumer to a brand interaction and everything in between.
“It is good to see Mat acknowledge that media agencies need to have skin in the game,” Preston said.
“We back ourselves to help clients grow – 60% of our clients have Match on a performance-based remuneration where we celebrate success and feel the pain if clients' business results don't perform.”
Preston said Match has also spent a lot of time focusing on what the marketing world will look like in 2018 and that’s why in September 2014 it developed its mission “to simply help clients grow”.
“If we focus on our clients’ needs and continually adapt to deliver on that promise the future for Match looks bright. I don’t think Mat has all the answers, and neither do we, but at Match we are very happy with listening to clients' needs, then adapting to deliver them. That’s fundamentally why we exist,” he said.
Looking at UM's new positioning, Preston said some of UM's clients might enjoy the concept of being creatively challenged and may look forward to the “tension” that will create between UM and the creative agencies.
“Then there are others that simply want their media plan delivered. I think in the short term the UM team is going to have to be chameleons, changing their conversation with each client. This could get very tricky for the team operationally, not least confuse some clients.
Similarly, I think the media owners will be confused. In one conversation with the media UM may be working up a creative concept, but in the next conversation they will simply be doing a deal to buy media space and time. So, it begs the question: has it really changed?
“The proof is in the pudding, it takes time to change an organisation, and time to prove performance by results.”
That said, Preston said he does believe the team at UM is well positioned to evolve its approach – something Baxter said is all part of a three-year plan.
On the question of Match Media changing its framework, Preston said the company positions itself as a “creative-friendly media agency” and works with their clients' creative partners.
“Our success in content development arises when the client has no creative partner (or the client is between creative partners),” he said.
“Then there are those instances when we contribute content when we need to, to augment an existing brand idea through media content. Either way it's done in the interests of the client, and to get the results that ultimately we are remunerated for.”
Another media agency exec, who did not want to be named, said it was a good move from UM and was something that media agencies were increasing having to think about – diversifying revenue streams.
“It's great that UM has been clear about its plans and intentions. There is a strong team there, but what you will find is that some 'traditional media agencies' have been sniffing around these areas for a little while and upping focus there. Due to the rhetoric from UM it seems like they are leaving the rest of us behind, but look a little closer and that’s not the case.
“Yes UM may be more focused on branching out from just media – which is good as I think it reinforces the fact that you can't sit tight in this space. In some respects it's good to make it know that you aren't just media agency and what they have done seems a wise move.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.