Category: Defining Value

Since the release of the ANA K2 Report on Media Transparency and now with Marc Pritchard, CMO of Procter & Gamble and Chairman of the ANA calling on the digital media industry to sort out their industry, many advertisers are in the difficult situation of knowing the need to address this issue but equally confused as to what to do first. Part of this is due to the complex nature of the digital media buying value chain, but it is also a fear of any changes revealing where they were possibly getting it wrong. Just as FOMO (Fear Of Missing Out) will often drive marketers into action when it comes to embracing new technology like Virtual and Augmented Reality, FOBFO (Fear Of Being Found Out) is often paralysing some advertisers from making the changes they need to make in the context of the very public statements of where digital media is failing.

These days, it’s a fairly well established fact that, on the whole, your media agency generates a bigger margin from buying your digital media for you, than it does from buying other ‘offline channels’. There are a number of potential reasons for this. Higher up-front commissions as a proportion of expenditure. Mark-ups on low-unit, high volume incidental services such as ad-serving. Mark ups on other parts of the ‘technology stack’ used to trade digital inventory. Undisclosed mark-ups on the value of inventory.

Last week, I wrote a post about why you should care about media agencies being placed closer to the strategic centre of your agency roster – and just as importantly, why that isn’t happening enough. You can read it here. Why is fine, but How? This week, I thought I’d consider not the why, but the how. What steps can you take to overcome the challenges posed by last week’s piece? To aid those of you who aren’t my regular readers (whose number, I am sure, is legion), I’ll do this by re-capping the challenges, and suggesting some solutions.

Being ‘the lead agency’. It’s been an agency goal, a badge of honour, a holy grail, a source of increased influence, kudos and revenue for as long as I can remember. More often than not, within any given marketing client with more than one agency, there’s more than one claimant to the throne. Either internally, externally or both, there will be a kind of fixed determination to consolidate this position, whether the marketing client wants it or not. Having grown up in media agencies, I’ve experienced first-hand a broad spectrum of internal tactics designed to elevate the media agency into some kind of lead position. But media agencies, historically, have fought a losing battle, more often than not. The clients generally defer to, or appoint outright, the advertising agency to a lead role, based on ‘brand’ and ‘creative’ taking the lead in the linear approach to campaign execution.