Diageo and P&G on the future of the media agency model
With the role of media agencies increasingly under question, two of the world’s largest advertisers took to the Dmexco stage to share their thoughts. Here, attendees of Day Two at the event heard senior marketers from Diageo and Procter & Gamble (P&G) strike a more empathetic tone than dramatic headlines over in-housing and transparency would suggest.
P&G's media director Gerry D’Angelo on stage at Dmexco
The contemporary era of marketing can be defined by brands seeking to address the gaps in their digital knowledge, as well as take greater control of the reins over data security, with many opting to take operations ‘in-house’ more-and-more.
Theoretically, this would annul the orthodox nature of the relationship between marketers and ad agencies, with Dmexco speakerJerry Daykin, Diageo’s head of digital media partnerships offering his assessment that brands need to more explicitly guide their media providers.
In conversation with Carolyn Everson of Facebook at Dmexco 2017, Daykin (formerly of Carat) spoke of the challenges associated with advertisers asking too much of their agencies when it comes to data skills, without providing the resource – be it time or money – to do so.
"Very senior marketers have an awful lot to think about, of which our digital bubble is a small part,” he said. “One of the things we can be guilty of as an industry is throwing digital ideas and opportunities and information at people who have an awful lot on their plates, and it is our responsibility to guide them through that.”
It’s why Diageo founded a “centre of digital excellence” to tackle issues associated with collecting and storing data in-house ahead of the upcoming General Data Protection Regulations (GDPR), a “big challenge” that Daykin said marketers “can’t just rely on other people for”.
Diageo is one of a number of brands up-skilling its in-house capabilities to extract the most value from its data, putting the traditional media agency model at risk.
Speaking separately on another panel, P&G’s media director Gerry D’Angelo also gave testimony on the role agencies play, believing that the “jury was out” over brands in-housing tech and data skills, adding that his own outfit still "doesn't have the skillset" to replace the operational side of a media agency.
“I don’t think we could ever handle the day-to-day operations and optimising of activity. There might be some big tech players that might want to bring that in house; I don’t think we have the skillset to do that as a large CPG organisation,” he said. “However I think the jury is out on some of those other things.”
Speaking in the wake of Marc Pritchard's call to arms to the industry to “complete the media transparency intervention”, P&G – which itself is undergoing an efficiency drive – suggested that agencies need to better understand their value and charge clients accordingly, rather than turning to nefarious practices like taking margins and rebates.
“The challenge now is that particularly media agencies at a point in time were too shy about the value they could deliver,” said D’Angelo.
“They should ask for more. That would have removed the temptation to try and make money – perhaps not in the most direct way, but to do it in other ways like cash flow. I would try and get out of that downward spiral," he added.
Daykin, however, acknowledged the alcohol giant’s role as an advertiser in “creating some of the mess” in the media supply chain, admitting the onus is not just on agencies and publishers to clean it up.
“Within that [Pritchard’s call to arms] there is a challenge to advertisers as well and how we play a role in that system and how ultimately what we ask for creates some of that mess and noise,” he said.
Daykin spoke of the importance of therefore taking a collaborative approach to creating a ‘trusted marketplace’, in order to both lay out standards for advertising and “understand what we should be doing differently” as well.
The alcohol owner has been working with its partners over the last five months to tackle 10 different pain points – including brand safety, ad fraud, viewability.
These comments come amid a turbulent time for agencies, with WPP and Havas posting significant drops in revenue for the first half of the year recently, as the transparency of the media supply chain was called into question, mounting pressure on such outfits to demonstrate a greater level of services and skills in data science and adtech, often at a time when they are asked to operate within tighter budgets and less time than previously expected.