Marketers are increasingly focussed on becoming more self-reliant and agile, anticipating a rapid shift in the way they work with agencies and in the metrics they use to measure media performance as they prepare for the 2020 media ecosystem, reveals a report published today by MediaSense, in association with ISBA and IPSOS Connect.
“Media2020: Preparing for a very different media ecosystem”, explores how businesses are organising themselves to meet the challenges of the rapidly evolving media ecosystem and is based on one of the most comprehensive surveys of senior marketing and media decision-makers to date.
The report reveals that marketers are at very different stages of their evolutionary journey towards 2020 but there is clear agreement on the disciplines they consider will be critical to success over the next five years: data analytics and insight (67%), content development (50%) and omni-channel planning (43%).
These priorities are a reflection of the significant shift in marketing focus to customer centricity, with marketers indicating the need for much deeper and broader internal capabilities to manage customer relationships, and the corresponding data, more closely. Over half of marketers surveyed (54%) said they expect to bring a number of functions previously outsourced to agencies, in-house by 2020.
The changes to organisational structures within client companies, and the desire to exert tighter control over certain capabilities, means that marketers’ requirements of agencies will change. 58% agreed that the number of agencies they work with will likely decline over the next five years but there was little consensus on the right agency model.
While nine out of ten respondents are comfortable that media agencies will remain the go-to people for paid media, disintermediation is a real issue for these agencies, with 73% of marketers saying they will increasingly contract directly with media owners and technology companies by 2020.
Creative agencies will face a different challenge. Many marketers say they feel creative agencies are behind the curve, particularly in relation to the creation of dynamic content. While eight out of ten marketers believe that creative agencies will remain the best place to go for big creative ideas, nearly 60% anticipate that content development functions will move in-house or to alternative agencies within five years.
When respondents were asked to rank their most important challenges over the next five years, there was strong agreement that measuring performance was the top priority, with 65% of marketers identifying the use of outcome-based KPIs to match media investment decisions more closely to business results as the number one priority.
Consequently, marketers expressed clear preferences for the metrics used in planning, executing and evaluating media performance to evolve, predominantly to digital metrics measuring ROI, customer value, conversations to outcomes, content engagement, from exposure to advocacy, and ultimately, the nirvana of the single customer view.
As models and metrics change, so too will agency compensation models. They will have to evolve to be much more aligned with this performance-based culture. More than three quarters of respondents (76%) agree that performance target-based remuneration will become even more important in 2020.
Graham Brown, director and founder of global media advisory firm, MediaSense, summarises: “In response to similar questions from many of our local and global clients about how to prepare for a 2020 media environment, we devised this report to offer guidance on how to be successful in what will be a very different media landscape. The ideal state is for organisations to be more self-reliant, data-driven and technology-enabled, with a clear view of the key drivers within their own media ecosystem. To be ready for 2020, marketers should exercise much greater control over their ecosystem but this is not the reality for vast majority of companies, who are and will continue to be overly dependent on their agencies for the foreseeable future. All marketing organisations should have a plan to ensure they have the optimal blend of capabilities (people, systems, processes and technologies) to enable them to succeed in 2020, irrespective of whether those resources are bought or rented.”
Debbie Morrison, director of consultancy and best practice at ISBA, adds: “In a very rapidly evolving media marketplace we felt this visionary research provided a great opportunity to get major advertisers thinking more long-term about their needs. We jumped at the chance to partner with MediaSense on this project and our intuition was right, senior marketers also jumped at the chance to talk, sometimes at great length, and express their thoughts on what they will need for optimal media performance by the year 2020. This research provides great direction for clients and agencies alike on how to prepare for a new media ecosystem going forward.”
About the survey:
MediaSense, in association with ISBA and Ipsos Connect, conducted a series of in-depth interviews and an extensive survey among 200 senior marketing and media decision makers between March and July 2015. Participants covered a broad range of industry sectors, including food, media, technology, insurance, retail banking, travel, pharma, toys transport, drinks and confectionery and represent well over £1 billion in advertising investment.