Marketers, Agencies Enjoy Symbiotic Relationship

At the recent Festival of Media in Montreux, my interactions with many of the world's largest marketers and agencies highlighted their symbiotic relationship. To understand agencies, it is necessary to understand the motivations that marketers -- both individuals and groups within larger organizations -- face on an ongoing basis.

· Marketers remain hyper-focused on media costsbecause of internal pressures.

This leads media agencies to continuously improve their own operations in order to reduce "nonworking" costs and to seek savings in reaching audiences through alternative media choices.

· Marketers are constantly challenged in reaching target consumers of their products.

Fragmentation of media means more labor is required to find audiences, and it's much harder to measure them using conventional panels. But it also presents new opportunities to craft messages for different audience segments. Fragmentation across platforms -- especially digital ones -- is creating new, if frequently undefined, ways of directly engaging with consumers.  Agencies must look for ways to efficiently aggregate audiences -- without incurring excessive costs -- while using data and analytics to better determine the best media for reaching and engaging with a brand's target.



· Marketers face sustained competitive pressures.

Most categories require marketers to continuously innovate in one form or another. Some can rely on their product development teams to innovate the product ahead of the competition, but in most mature categories, marketing innovation is the primary means of differentiation. Creative executions and creative uses of media are critical tools, but smarter spending and more efficient ways of reaching target audiences will also help.

· Marketers are often challenged to demonstrate their impact internally. 

For example, marketers inside of manufacturers -- and media directors, in particular -- are rarely responsible for the product or its trade distribution. In multibrand organizations, they are often internal consultants to brand owners. This makes it critical for marketers to demonstrate the ways in which their actions have contributed to favorable outcomes. More and more data is available, and there is an expectation that it will be used to drive business results. Agencies, in turn, are expected to justify their actions on a similar basis, better arming their clients to succeed within their own organizations.

Although it is true that from time to time marketers replace one agency with another -- either because the agency could not meet the marketer's needs or for reasons unrelated to the actual work -- agencies are primarily valued because of the vast array of resources a marketer could deploy in developing a campaign. 

An agency that has observed what works and what doesn't, and can provide objective advice on where to allocate budgets, is a critical resource that cannot be replaced by technology. It is highly unlikely that agencies providing these services will ever be dis-intermediated from their clients. 

At Montreux, many of the ideas presented were bursting with creativity and complexity. It was evident that the ideas presented could only evolve through careful evaluation of a range of prospective media partners. The demand for creativity, paired with some level of advisory services, suggests that most large marketers will continue to rely on agency partners for advice on strategy and best practices in execution well into the future. 


2 comments about "Marketers, Agencies Enjoy Symbiotic Relationship".
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  1. John Maher, May 20, 2011 at 10:10 a.m.

    Well, thanks for stating the obvious. These are the same factors that have existed for at least the last 20 years. I certainly hope this doesn’t represent your “Ah-ha!” career moment.

  2. John Grono from GAP Research, May 20, 2011 at 8:41 p.m.

    And I think a very important factor was left out.

    - Marketers must understand and accept that the more niche the targeted audience is, then the higher the CPM.

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