• by Martin Cass , June 12, 2015

Over the past few weeks we have seen a tsunami of media pitch announcements from some of the largest global companies. What is going on?

It seems that not a week goes by without another massive media pitch. It cannot be a coincidence that so many clients who would consider themselves to be highly sophisticated in the media space are looking very carefully at their agency arrangements right now. P&G, Coca-Cola, VW group, Unilever and Sony (to name only a few) challenge their agencies to do great work and have been stable in their choice of partner giving them the opportunity to develop and lead them. It is extraordinarily expensive and disruptive to run pitches of this scale, and the decisions to do so will have been very carefully considered. So what has changed?

The answer is almost everything -- and clients are frustrated by the inability for their agencies to keep up. Yesterday it was all about “Mongoose” at CES and now it's “Periscope” -- who knows what tomorrow will bring? As custodians of our clients' investment in media we need to have a point of view, coherently explain how any new technology can fit into a communications plan, and most importantly how it will make a difference to the objectives that have been set. The trouble is the exponential amount of and the scale of the change, which has now reached a point that it’s no longer possible to add on the capability to a traditional core.

Ram Charan, the Harvard Business School professor and writer, said: “Digitization is making the core competence of most businesses obsolete” -- and so it is true of the media agency business. Most agencies were built to service the output of advertising content from creative agencies, and that is still the core of their businesses. Technology and digitization have been introduced to enhance or replace physical activities, but rarely are they the heart of the agency. As a result, hanging onto outmoded legacy business models continues. Clients are waking up to this -- and now we will see who is prepared to really step up and change the business model of their company to fit the world, rather than tinker around the edges.

So what will a winning agency need to demonstrate they are prepared to do in order to win a bigger share of the prizes on offer?

Automate. Accept that we have so many people who are doing “busy” work that can more effectively delivered by technology. We need to have more people who add value to the clients' business or we will become obsolete. Ask your customer: “How many people work on your business?” and then ask: “How many of them could you not do without?” I have asked this of more than 50 clients over the last 12 months, and the answer is always roughly 10%. No wonder that procurement quite rightly starts to question the value contribution of the 90%.

Accept that transparency is good for business. Sorry -- the “secret” is out for both clients and agencies. You have to pay the agency fairly, and the agency must be transparent in all its dealings. The money we spend belongs to the client, not the agency. More importantly, lack of transparency will hinder the growth of automation of the media markets, which will in turn create massive efficiency -- which frees up time for people to do the added value work of understanding the changing landscape, and to better understand their clients' brands and consumers so they can build better more effective plans.

Embrace ambiguity. With exponential growth comes exponential solutions to a problem. We have to get used to the fact that we are going to be very uncomfortable. Solutions to a client problem are likely to be a lot more bespoke than in the past. We are no longer living in a world of “pret a porter” media -- every plan can, and more importantly, should be different.

Look for new measurement capability. Unless we throw off the shackles of old media measurement, change will come very slowly. It's madness to try to tie the connected media environment we live in back to measurement systems used to justify TV budgets in the 1990’s. The idea that old-school market-mix modeling is nimble and flexible enough in a world of “Big Data” is equally nuts. If you don’t have a “Math Department” at the core of your business, you are still operating the media equivalent of a horse and cart.

Don’t try to own everything, and seek out diversity of talent. If you hear the words “our proprietary” in front of anything at an agency anymore, run a mile…. If it's proprietary it's already out of date. Agencies need to become aggregators of capability, use the right tools for the moment and move on. It takes really smart people with a broad range of skill sets to do that effectively, so forget the “proprietary” stuff and look for the talent.

Media agencies have to be creative too. The connected landscape and continuous innovation within it has created a vast palate for creativity. The difference between agencies in the future is not going to be CPM or size -- it's going to be how good they are at making a brilliant creative idea get bigger through media. Partnering with creative agencies effectively and adding value to them by making their ideas bigger and better is what clients should be demanding. However, if you don’t score well on the previous five elements, you are unlikely to be able to deliver the last.

There has never been a more exciting time to be at the heart of the media industry, but reinforcing the status quo and harking back to a rosy view of the past is not a blueprint for victory. Can anyone make the changes necessary? Or will we be doing this all over again in a couple more years?