In an increasingly digital and fast-paced world, media agencies must rethink the essence of their reason for existence in order to survive.
Technology is changing everything
It won’t have escaped your notice that the media landscape is – to use a somewhat overused phrase – changing at an unprecedented pace. 10 years ago, a BlackBerry was advanced, Apple had just released a new product called the iPhone and Facebook’s population was about the same size as Egypt’s. Fast forward to 2018 and BlackBerry is all but gone, the iPhone X uses facial recognition to unlock and the number of people who use Facebook is almost twice the size of China’s population – and it’s only one of a whole raft of social channels. This proliferation of technology is generating data that enables consumer understanding beyond the 2008 marketer’s wildest dreams, and governments around the world are clamping down on irresponsible use of that data.
Advertisers are having to adapt
Against this landscape, advertisers are grappling with consumers who are spending less time with traditional mass media, scattering the time they do spend with media across more and more communication channels. For advertisers the big challenge is trying to understand how to glean meaningful insights from the almost limitless amount of data and tools available to them, as expertise in this field is scarce. Furthermore, CMOs are under constant pressure to drive growth whilst at the same time reducing costs – costs which come from tools, the chain of middlemen, non-transparency, non-delivery of targeting, the wrong KPIs and of hiring experts – amongst many others.
Are media agencies in limbo?
All this has implications for media agencies, who are asking themselves where they stand in this strange new world. The kings of traditional media and audiences, they are having to adapt to a digital world in which small, agile specialist agencies and new tools are sprouting every week and using data to buy individual customers in real time, not audiences. Meanwhile, non-traditional competitors such as consultants and indeed media owners are harnessing the power of data to encroach on media agency territory. Advertisers are hiring a totally new type of talent, including data and content strategists, questioning as they do so if they can cut out the middleman – the media agency, at least when buying in certain channels which do not fit the way of working of the traditional media agency.
However, media agencies do have key attributes on which they can capitalize in order to survive and even thrive. The first, and perhaps most obvious, is their scale, both in terms of their footprints and their clout with media owners. This enables them to drive down costs and activate strategies efficiently and effectively, all over the world: that remains hard to resist for advertisers looking to make every cent work as hard as possible. The second is their experience: the institutional knowledge at the global agencies, earned over decades of creating and optimizing media strategies, is all but impossible for smaller, newer agencies and consultancies to replicate. Finally, there is a receptiveness to the fact that business-as-usual based on the last 25 years is no longer going to cut it: agency executives know that in order to survive, things have to change dramatically, and quickly. But changing an industry that has built up around the rather basic mechanics of mass media topped with a professional service layer is not an easy task.
What does change look like for media agencies?
In our dynamic, digital world, the most important change that media agencies can make to their model is to truly embrace technology and analytics and respond more quickly to the changing landscape. These juggernauts need to find a way to behave like smaller, nimbler agencies: true agility, backed up by mighty scale and institutional knowledge will be a heady, irresistible combination for clients whose eyes are being caught by the young things of the digital and analytics sector. Fundamental change like this is evidently a huge challenge but will be eased by hiring the right people: data, analytics and content experts will demonstrate that an agency is on the cutting edge of innovation and will be able to advise them on the twists and turns of the 21st century media landscape.
Some of the best media agencies that we work with are the ones who see themselves as partners to their clients, and not as a service supplier. They look beyond a media brief to really understand the client’s business challenges and work with them to deliver solutions to those challenges via marketing and media – not just media metrics. In this way, future-facing agencies are guiding their clients through myriad complexities, helping them find new competitive advantages.
A true partner is a trusted one – and trust in this case is born in part of transparency. In an age of programmatic buyingand new technologies such as blockchain and AI, the issue of transparency is becoming increasingly critical: media agencies must step up to the mark and strive for total transparency in all their activity and all other middleman involved on behalf of clients, otherwise a spirit of trust simply cannot exist. Above all, agencies must meet the requirements and expectations of clients, and remain accountable.