The fear of losing control is all around. It’s lurking in the widespread public anxiety around globalisation and economic downturns and it surfaces in our everyday lives when we’ve lost the remote or misplaced our mobile.
This fear is all too human. One of the few places it’s not however is in the eyes of the robots performing for the crowds at CES, or in the motions of the automated pickers working their wheels off in Amazon’s warehouses. Although clients aren’t directed by AI, for the time being at least, one of their concerns relates to being left behind in the wake of complex and sometimes dominant technology platforms.
This scenario forms part of what we describe as ‘the third era of commercial media’. The first being when traditional media owners became all-powerful, leading to concern among clients that they were being overcharged, and inspired the creation of the media auditor. The second era involved the rise of media agencies that became too powerful and too ‘rich’ and so triggered the emergence of procurement as a force in media. Now, we’ve entered the third media era, where technology platforms such as Google and Facebook are disrupting the client/agency/media owner ecosystem and are so pervasive that many clients, and indeed their agencies, either don’t know how to engage with them as equals or worse, don’t dare.
Now, we’ve entered the third media era, where technology platforms such as Google and Facebook are disrupting the client/agency/media owner ecosystem and are so pervasive that many clients, and indeed their agencies, either don’t know how to engage with them as equals or worse, don’t dare.
Solutions are urgently required, because this third era involves digital players that have made their own rules, marked their own homework, and are becoming more siloed and closed. In so doing their practices often fail to benefit the very clients they serve.
Media agency behaviour is problematic on a number of fronts but one of the key issues is the power dynamic between communications planning and commercial trading. In the first era we experienced strong, well-run, agencies with planning at the fore, and traders acting on planners’ insights. In the second era, we saw the relationship starting to change and now agency trading all too frequently leads media planning. Planning has rightly retained its kudos but is too often used to validate revenue decisions made in advance by the implementing trading teams.
The agency holding companies’ solution to nearly all client concerns is to build integrated models that offer an all-you-can-eat buffet of services to clients that solve the immediate needs of brands, but at the same time deliberately creates a layer of dependency. Holding companies are clearly pushing for further integration, but such a model is not necessarily in every client’s best interest. However, faced with FTSE or DOW-listed giants with market caps larger than themselves, many clients have lost a lot of their leverage.
Some big brands are taking a different approach and are insourcing and/or adopting best in class agency partner models, e.g. the likes of PepsiCo and Mondelez have established their own in-house content resource. Other brands are taking more control over their own data, social media, programmatic and eCRM etc, so procuring the tech and use the marketing ecosystem to fill gaps in capability and resource availability. Whatever the approach, there are significant risks involved in ceding too much control to agencies and other suppliers.
We have found that there are four areas for clients to regain control: by placing a greater emphasis on defining performance, by bringing a stronger focus to commercial governance, by re-thinking partner selection, and by developing a deeper understanding of data and technology.
To win in this third media era, brands must move beyond metrics of convenience and adopt more relevant performance KPIs. Brands which interpret data to identify where budgets can be best or better optimized will thrive. These brands will measure outcomes and ensure their agencies make evidence based planning decisions rather than buying decisions made to fulfil pre-agreed trading arrangements.
On governance, brands which invest in relationships with agency, data and tech partners are more likely to construct contracts that work for them and to align risk and reward around real returns. Contracts engender behaviours and create expectations around the partner/brand relationship. “Strong fences make for good neighbours” after all.
Selecting the best partners in a world of insource, outsouce, specialism and integration is no easy task but a stronger focus on the design and planning of the selection process is a step forward. It’s also worth remembering that agencies are just one component of the ecosystem; for many clients the choice of adtech, martech and data platform are just as significant a decision.
Finally, understanding the data and tech landscape is essential for making advertising more relevant, agile and effective, and making the creative and media process faster and more efficient. Marketers must commit to better understand the new landscape and the impact it can have on brand success.
By changing legacy behaviours in these four areas brands have a real chance to regain oversight and control, and encourage more commercial, creative, and positive thinking internally – and from their external partners.