So, AdNews has posed this statement: “A lot of people say the media agency model is under pressure. Some say they've never had it so tough, others say it's an opportunity.”
And asked me the following question: “Will media agencies be around in 10 years' time and if so, what will the model look like?”
Yep, that question. It is one that has been around for some time, but the discussion in conferences, panels, trade publications, and industry bodies surrounding this has ramped up 10-fold in the last six to 12 months.
Why? Usually it has been sparked either by cost (that is, remuneration at agency side and cost-pressures at client side), or the increasing needs of advertisers coupled with the increase in the number of rostered marketing suppliers (adding time and frustration for all stakeholders).
To counteract this, some advertisers have put it all in the too-hard basket and have started considering bringing the media function in house.
Bringing media in-house
“Media agencies have their own agenda, they are not transparent, and hey this will be a good way to save money – let’s bring media in-house.”
Well, it is a trend. While mainly in the USA, there are pockets of it here in Australia that have occurred or that are strongly being considered.
However, by bringing in the entire media function in house, clients are potentially missing out on access to high caliber talent, strategic thinking, and tools that deliver effective efficiencies.
Having said that, I am actually a strong advocate of having a centralised person or team whose role is media controller at the client side. I have seen it work very effectively with advertisers who hire them themselves (usual agency people), I have also seen it work where the media agency integrates a person or a team within the client’s office.
These models tend to give the client the best of both worlds. The client has a well rounded view of how all disciplines should work together, and they tend to get closer contact to the media (or other) partner alongside the agency, while still having access to the expertise found within the agency. In my experience, when this takes place, the greater the trust between client and agency and the longer the retention.
The model – what will it look like?
“Agencies don’t understand our business, its all about the way they do business, not how we do business”. Ultimately, there is no proven successful cookie cutter model. If there is, or at least some agencies adopt that principle, then the statement posed to me by AdNews is probably true.
The media agency model should be defined by the needs of our business partners – our clients. And because every client has a different need, agencies need to be adaptable enough, diversified enough and intuitive enough to remain viable.
The alignment of the advertisers' KPIs to theirs is paramount. Not marketing KPIs - business KPIs. Agencies should share the pain and share the success in proportionate parts. When all of this occurs, all the issues around trust and transparency (another topic floating around for the past six to 12 months) will reduce significantly.
This is actually where the opportunity lies...
One-stop shop?
“I just wish that I could have one central contact for all my media and marketing requirements.”
Clients don’t want more suppliers, they want less. Trying to get suppliers to collaborate, in a world where the lines and capabilities have blurred, is a nightmare for most medium – large advertisers, and takes up precious time that could otherwise be spent ... um, I don’t know, selling stuff?
Any media agency that has positioned themselves with a strong, diversified service offering – and that includes creative – are best placed for the future. There are quite a few out there who are doing it extremely well, a few who are pretending, and a few who have not moved past last decade's model.
So ... will media agencies be around in 10 years? Anyone who professes to know what the agency model will look like in three years, let alone 10, is full of it. However, if agencies don’t evolve with the client at their heart and are not open to adaptation ... then yes, those ones will die.
For the rest who do, may this industry live long and prosper!
Andrew Lamb
Former TMS media director