There’s a revolution going on in adland and unsurprisingly it’s being driven by the tech giants.
Earlier this year, Starcom MediaVest Group and Twitter announced a huge advertising deal, representing hundreds of millions of dollars in revenue for the social media network, over multiple of years.
Most recently, Google also declared a pact with MediaVest – whose clients include Coca-Cola, Walmart and Honda – to spend tens of millions of dollars of advertising on YouTube, the Google Display Network and the AdMob service. This also followed the announcement between Publicis and AOL about the launch of their global live advertising partnership, PAL.
In short, enormous ad budgets have shifted towards digital media such as YouTube, websites and mobile devices. And the tech giants, scenting the revenue, are certainly driving the change with enticing offers for the likes of MediaVest and Publicis.
Even the negative publicity around Facebook’s IPO launch and recent comments by respected Forrester analyst Nate Elliot, in which he questioned the long-term growth and profit potential for Facebook’s advertising model, haven’t seemed to dampen the enthusiasm for all things tech. In fact, when releasing its latest quarterly results, Facebook said mobile advertising revenue represented approximately 49% of $1.8 billion made in its 2013 third quarter.
So where does all of this frenetic activity leave media agencies and their expertise in strategic planning? It might be assumed they feel backed into a corner, threatened and even defensive. It’s a natural reaction. However, if it isn’t already obvious there needs to be a recognition that the media landscape is changing and agencies need to adapt with it.
Media agencies have a lot of unrivalled strengths and hard won expertise that the tech giants don’t. They can leverage this to galvanise their position and make themselves important partners in this shifting landscape. There’s something I call the three ‘Cs’ which can act as a template for adapting to and thriving in this digital arena.
Consultancy
The first is consultancy. Agencies typically haven’t been robust in this area, not because they don’t have the expertise but simply because it has been a secondary consideration, compared to the planning and brokering aspects of their business. But they certainly have a huge amount of knowledge that could be immensely useful to marketers.
Their intimate knowledge of the relative merits and demerits of different media channels, audience demographics and understanding of verticals makes them ideal consultants for marketers. They could offer penetrating advice on which media channels to focus on and how to maximise return-on-investment for example. They already have this expertise in-house, so it’s just a question of identifying it and bringing it into the light of day.
Collaboration
The second ‘C’ is for collaboration. For clients who are seeking to get the maximum “bang for their buck”, it’s tempting to move towards the channels where they see the largest audience, YouTube for example, which estimates one billion video uploads every day, which means at least one billion web site visitors every day. Similarly Facebook also has an estimated one billion plus subscribers.
It’s hardly any wonder that Google and Twitter have been able to bag huge advertising deals. Media agencies, however, can bring a raft of value added services and understanding to clients to help them grow their business. However, to do this they really need to gain a clear and in-depth understanding of their client’s business, not only in terms of the minutiae but also the competition, market dynamics, economic forecasts – the whole deal. By marrying this client and market understanding with their own expertise they can easily become a valued collaborative partner.
Creativity
The third and final ‘C’ is for creativity. One of the defining characteristics of today’s media landscape is the extraordinary degree of fragmentation, driven by the mass of ubiquitous devices like smartphones and tablets, with ever more powerful and smaller devices just around the corner. In effect we have ‘anytime, anywhere’ computing and as a result digital savvy consumers expect ‘anytime, anywhere’ access, communication and even advertising. For marketers, this means not only reaching out across all media platforms but also in a way that is engaging, interactive and appealing.
With this in mind, media agencies are in a great position to offer advice on the creative aspects of marketing and advertising campaigns. This may seem like a significant step away from core business but media agencies have unique insight into multi-platform campaigns and what works and what doesn’t work. In fact, more campaigns pass through their hands than large creative ad houses. In this respect they could have the tech behemoths calling on them because they certainly don’t possess the skills, the knowledge, or insight for that matter.
Deals such as Google and MediaVest’s signal a sea of change in the industry. Marketers are clearly signalling their intent for more digital solutions and these dynamics are rupturing existing business models. But rather than lose out to the tech giants, media agencies can actually get in on the action, by firstly acknowledging their unique market knowledge and insight and then by putting it to positive use. By working alongside the tech companies and providing value-added services such as consultancy, collaboration and creativity they can remain valued players in this brave new world.
