The Continuing Relevance of Media Agencies

08 Nov,2019

 

Excerpted from GroupM publication, The Media Landscape:

It is clear that the global landscape is getting more complex rather than less. It is evident, for example, that the media market is fundamentally local and that budgets are allocated and transacted on that basis. Within any given market, shares of individual vendors vary widely, as does the volume of inventory that can be traded via automated systems.

Aside from brand and social safety, an area where the leadership of media agencies is clear, perhaps the greatest advertiser challenges are in budget allocation and attribution. On the one hand, the walls of the walled gardens are rising; on the other, the ability to create “data clean rooms” within those walls is increasing. The challenge for everyone is that attribution across media types is of far less interest to the seller than to the buyer. Allocation and attribution are massively compromised by the balkanisation of data, and without the custom models built by agencies and advertisers together, any answer is partial at best. The fact that this process varies by market (as well as the data/regulatory environments of those markets) simply adds to the complexity.

Advertisers also have an uneven and inconsistent relationship with data and marketing technology. In the case of the latter, media agencies provide a layer of capability, experience and peripheral vision that sooner or later can be of inestimable value to their clients. It’s hard to build and maintain a “tech stack”; it’s easier if a single marketing cloud vendor can fulfill many objectives. That’s certainly simpler than advertisers taking on the noncore function of systems integrator. Challenges arise at two levels: first when each component of the tech stack is not best in class, and then when a switch is required. By their nature, large agencies have visibility across the supply chain and of switching and onboarding processes and implications.

Data presents challenges of its own: cost of acquisition, regulatory compliance, respect for the consumer, and risks related to data being used by sellers of media to the benefit of others in the category as a result of pervasive pixels placed on advertiser digital properties. Media agencies have particular expertise concerning the prioritiation and safekeeping of the data sets that thread the needle between relevance and compliance, which can also be applied to audience segmentation and directly to the purchase of media inventory. They also have a record of high standards of data security.

It would be naive to dismiss in-housing; it is real, and for many marketers it has increased the speed and accuracy of decision-making. It is our view that in the environment described, in-housing is at best a partial solution, as most often it is restricted to channels that allow automation. Media in its entirety is a system of connections between brands and consumers, and it needs to be optimised in its entirety. It is also easier to execute in some markets for some channels than for all markets in all channels. In turn, this can create unfortunate incentives if attribution models are skewed to favour the channels and creative assets are managed by one party rather than another, and if different markets have different priorities caused by organisational structures rather than business needs.

As media agencies, we are significantly invested in the success of our clients. It is obvious that their success is likely to prolong our relationships, and potentially increase the breadth and depth of our assignments. Part of being invested in that success is adapting to organisational constructs that our clients favour. Consequently, we find ourselves as partial enablers of in-housing, which, on the surface at least, is not in our interests. It is what might be called a “learning moment” for our sector—in which scope and reward rise with collaboration and proof of expertise rather than by right.

Excerpted from GroupM publication, The Media Landscape Please visit https://www.groupm.com/news/groupm-media-landscapes to download the publication

Post a Comment 

Comments are closed.

Today's Top Stories
Videos