Marketers now want media owners rather than media agencies
Marketers want to strike deals with media owners not media agencies, with most (73 per cent) of the former expecting to ink more direct deals with the likes of Facebook and Netflix by 2020, according to a study.
It’s a trend indicative of the shifting dynamic between advertisers and their agencies that is being fragmented by the way people are adopting digital media. And while nine out of ten respondents to the Mediasense and ISBA chief marketing officer study are confident that media agencies will continue to be the best way to spend on paid media, the fact that many marketers reckon they’ll soon be spending more with media owners highlights that disintermediation is a real issue for these agencies.
Indeed, nearly six in ten marketers (58 per cent) think the number of agencies they work with will be whittled down over the next five years though the report highlighted that there was little consensus on the right agency model. Building the right model has been one of the reasons experts have said is behind the $25bn-worth of media that has been put up for review this year as the likes of Coca-Cola and Procter & Gamble look to communicate with more people individually more efficiently.
Creative agencies are tipped to be pulled into this reassessment of how best to reach people. Many marketers according to the study, think that creative agencies aren’t equipped to deliver dynamic content with 60 per cent expecting to move content development in-house or to alternative agencies within five years.
It’s an issue that was spotlighted earlier this week at an Oystercatchers event, where Tesco and Scottish Widows spoke about their attempts to find the right models needed to ensure their communications were nimble enough to react to consumers. Despite the leanings of marketers, the majority of those surveyed (82 per cent) still think creative agencies are the best place for creative development, while 69 per cent are confident with their media agencies to still manage communications and channel planning.
The fact that marketers expect to work closer with more media owners but are not quite ready to completely part ways with their media agencies reflects the confusion swirling around the industry at the moment; whether it’s measurement or a technology, brand owners are having to make bigger bets on marketing investments in order to both appease short-term focused targets as well as ensure their brands are thriving in the digital sphere. Nearly two-thirds (65 per cent) of marketers said the use of outcome-based KPIs to match media investment decisions more closely to business results as the number one priority, while more than three-quarters (76 per cent) believed that performance target-based remuneration will become even more important in 2020.
The latter point was compounded by 76 per cent of respondents agreeing that agency compensation models need to change. These stats are part of the latest chapter in the ongoing debate about how advertisers and agencies should work together, discussions that have been raging since digital marketing first became widely adopted.
“To be ready for 2020, marketers should exercise much greater control over their ecosystem but this is not the reality for vast majority of companies, who are and will continue to be overly dependent on their agencies for the foreseeable future. All marketing organisations should have a plan to ensure they have the optimal blend of capabilities (people, systems, processes and technologies) to enable them to succeed in 2020, irrespective of whether those resources are bought or rented,” said Graham Brown, director and founder of global media advisory firm Mediasense.
He added the report indicates marketers and consequently their businesses believe they need to be more “self-reliant, data driven and technology-enabled, with a clear view of the key drivers within their own media ecosystem”.
The report shows how marketers are yet to come up with a definitive model on how they get the most from their partners – whether it agency, media owner or technology firm – though it’s clear what they believe will be pivotal to their strategies over the next five years; data analytics and insight (67 per cent), content development (50 per cent) and omni-channel planning (43 per cent).
Debbie Morrison, director of consultancy and best practice at ISBA, adds: “In a very rapidly evolving media marketplace we felt this visionary research provided a great opportunity to get major advertisers thinking more long-term about their needs. We jumped at the chance to partner with MediaSense on this project and our intuition was right, senior marketers also jumped at the chance to talk, sometimes at great length, and express their thoughts on what they will need for optimal media performance by the year 2020. This research provides great direction for clients and agencies alike on how to prepare for a new media ecosystem going forward.”