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The Evolving Agency, The Duopoly (Triopoly with Amazon) and the 4A’s 2020

April 18th, 2019   ||    by Gary Milner

At the 4A’s 2019 Decisions 20/20 show that I attended recently, Nick Brien, CEO of Dentsu Aegis, North America outlined the hard truths facing the agency business and the strengths of the duopoly (Google and Facebook).

Despite the relatively gloomy prognostication and the agency CEO panel stating that the key problem was a failure to act, not a problem of trust, I did hear across various panels, comments and examples from agencies, signs of hope and movement towards addressing these issues and a call by the top CEO’s to work more closely with the 4A’s to help the industry transform, much like the ANA.

Nick Brien said that the hard truths for agencies are, they are too slow to change, too incremental with legacy structures, legacy mentalities, legacy behaviors and legacy relationships. Just a small list and a list that is dominated by the past. The past and unwillingness to proactively change is what usually destroys business transformation.

The duopoly? What of them? They have scale, persistence, access to first party data, tech capabilities (media platforms) with ownership and safety. These companies may be safe to work with from a fiscal stability point of view; however, I would question the notion of brand safety given all of the repeated manifestations of negative, abusive or violent content (that appears), that can have ads run around it. I’ve questioned for some time why brands continue investing given the massive inventory opportunities available to them in the market. Marc Pritchard echoed that at the ANA last week, stating, “I urge partnership with companies and buy media from places where the content quality is known, controlled and consistent with a company’s values”

What were the signs of transformation for agencies?

The independent agency panel (Mediaworks, Macdonald Media, Mediassociates and Wieden and Kennedy) discussed the fact that as they had no silos, they were more strategic, and they did not put media at the center of requirements. They focused on driving business outcomes and the staffing and skills needed to provide that.

Bidding for business on price and cost reduction was brought up as a “no.” RFP’s (request for proposals) that were only about pricing are more likely to be sidelined, instead partnering on business outcome/challenge related bids.

Silos were being eroded as the reality of marketing is now a team effort. There is no choice but to manage strategy, data, adtech, planning, creative media and analytics as an integrated set of parameters for a program launch. This ensures that agency silos must be broken down to ensure an effective campaign can be executed.

There is movement from premium media marketing that is embedded in historic media practices to driving premium as a brand safety execution. This drives a deeper level of understanding of audience, ad placement, use of data, fraudulent practices and dynamic industry changes. Excellence here leads to trust. Trust leads to business.

A lot of brands need help with data. The DTC (direct-to-consumer) brands have grown up on data and have learnt how to leverage it for marketing, inclusive of media and product decision making. However, with the rise of GDPR, uncertain USA data standards and the erosion of the availability of quality third party data, brands need help with data strategy, execution and maintenance. Brands that do not have a strategy or simply stop collecting data to be compliant will simply be in the loser’s seat. It was evident that the smart agencies are being more proactive with this. We are in an era of don’t lose it or misuse it, both require expertise.

Also released a little after the event, and further evidence of needed transformation was Videa’s research on changing planning, buying and measuring needs in the local broadcasting business. Videa, an online marketplace for automated television advertising, released the report that interviewed more than two hundred marketing and advertising professionals with six or more years of experience in the TV advertising and buying industry.

The findings showed that more than 50% thought TV buying was too difficult and 33% said the current process of selling and buying TV is unsustainable with 50% holding onto old processes.

The full report can be found here:

Remember the 70 billion dollar TV ad buying business will migrate to data buying as it becomes digital IP driven, so it is important that agencies do drive the data discussion. If they don’t, that piece of media buying will become more fragmented with new entrants servicing this.

The digitization of media has caused massive transformation in the agency space. As this cascades into the medium of TV then I would advise that agencies be proactive with that and drive client transformation. It Is imperative given what I have outlined above, legacy in this medium isn’t a smart strategy.




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