I had an interesting conversation recently where an executive from a regional media company said that advertising agencies are doomed. Knowing my biases he apparently felt like he had a receptive audience, so he explained his thinking.
Advertising agencies, he said, basically offer two services. First, they buy media. But that function had been shifted into large specialist media buying companies who were competing on price, so that revenue was gone.
What was left, he said, was the creative function. However, as his own media organisation was in the midst of forging a creative unit that would do the creative work for free as a part of an ad buy, he felt he had seen the future. How could advertising agencies survive, he said, charging clients for creative that the media companies were ready to give away for free?
Leave aside for a moment his simplistic view of the advertising business, and the fact that he was biased in favor of his own vision as it served his own purposes. (And leave aside my own self-interested bias against advertising as a marketing tool.)
The guy does make a point worth considering. Some forward thinking media are already starting to think more like advertising agencies, and as they do that they exploit a misperception among many of the less-sophisticated clients that ad agencies offer little value beyond media placement and creative ideas.
At the same time, it is too early to write off agencies. Too many media salespeople (especially here in China) operate under the implicit perception that their medium sells itself. This applies not only to TV, but to online outlets as well (major portals selling ads based on time rather than a more meaningful measure? Please…)
For the media to become a genuine threat to ad agencies, the ad sales and business development people working for media need to think more like account reps - knowing all that they can about the client’s business, then rethinking what they offer to help the client make really creative use of the media outlet to advance their business goals.
And I mean going beyond positioning the buy to a point where you completely rethink what you are selling. Is this opportunity really about selling banners or postage stamps, or is it about getting the client to sponsor an entire section of your site and even support specific content? Are you willing to toss your business model out the window to attract a great advertiser?
Because if you aren’t, you are not ready to replace either the ad agency or the client’s CMO.
Tags: Advertising, agencies
This entry was posted on Friday, March 27th, 2009 at 3:55 pm and is filed under Advertising. You can leave a response, or trackback from your own site.
Media Hutong
March 27th, 2009 at 4:34 pm
I doubt its a question of ‘replacement’, or whose ego or self delusion is bigger, David. It’s about staying fee relevant to clients and being able to afford a home to live in, or be a dinosaur and continue to feed off 0.1% media commissions.
It’s also definitely not about Media vs. Creative. vs. Marketing - but about chewing down the convergence point upon which all parties sit to churn investments into shareholder profits. Integrated Marketing Communications, otherwise known as Customer Value Integration i.e. customer profitability, seems to be where the yellow brick road leads.
It doesn’t matter who has the best go-to-market skills for this. So long as everyone recognizes that those are the rules of engagement. Only when everyone agrees to play by those rules - will it be apparent who should be rewarded more, and who should be rewarded less.
Even if that someone who brings home the biggest slice of the cake, turns out to be the Media Owner.
March 30th, 2009 at 6:51 pm
Media, we agree on one point, which is offering value to the client. I like to get even more granular - communications should be a competitive weapon that clearly and measurably helps the client meet most if not all of its business objectives.
But I’m starting to wonder whether “Integrated Marketing Communications” has lived up to its promise. I think the concept was great until it was hijacked by a handful of really large agencies as a selling tool. To be fair, IMC, or “Customer Value Integration” or whatever you want to call it has worked and can work for the right company in the right circumstances, but it is too often sold as the default approach to marketing for all enterprises.
As far as skills, I think we’ve all become too specialized. Great marketers are those who know ALL of the tools of the trade, and know when and how (or how NOT) to use each both individually and in concert - in a given business situation.
March 31st, 2009 at 5:27 pm
“But I’m starting to wonder whether “Integrated Marketing Communications” has lived up to its promise.”
“but it is too often sold as the default approach to marketing for all enterprises.”
- David
Ever tried juggling razor-edged knifes on first attempt, David?
It’s a bloody pain
http://tinyurl.com/imcblood
‘Customer Value Integration’, or whatever we choose to call it, is IMC 2.0 aka KISS.