The recent chatter about the demise of KSL Media and the notion that small to midsize independent media agencies will have a tough time surviving misses the point: One we should all be well aware of by now. Size is not, and will never be, the reason why a media agency survives or dies. In fact, as media and media planning and buying have evolved, I would suggest that the industry now favors the smaller independent shop.
The tables are turning as clients realize that media planning and buying is not a commodity, but rather an instrumental and important component of their overall marketing strategy. Media agencies have become strategic intellectual hubs with accountability and business results at the center of our efforts.
The media world is breaking down the barriers of scale every day; auction marketplaces, programmable systems, data analytics. These resources have leveled the playing field so that any company can compete. The only true advantage size offers right now is in Network TV, but even that antiquated process of negotiations won’t last for long.
From the group buying power perspective, the industry has moved away from wanting the "cheapest media" to wanting the best return on investment. With that said, cost is a major variable in the return equation. In the increasing world of programmatic buying, clout isn't a factor. Ads are sold to the highest bidder regardless of agency size. Vendor relationships are made at any agency and favorable deals are struck every day without regard to agency size.
Another way to look at it is that you might think you are going to get the lowest prices at Walmart, but do you want to shop there exclusively? You give up variety, service, shopper experience, and, often times, quality. With small to midsize media agencies, a client’s experience is tailored to their individual needs, not the needs of the masses.
Smart clients understand the value of innovative, accountable, and dedicated media teams. They appreciate those that build value, not by scale and scale alone, but by their ability to develop custom solutions that offer both innovation and efficiency.
The client benefits of a small to midsize media agency are many. As strategic intellectual hubs, they:
A focus on innovation and creative client solutions will make smaller independent media agencies stronger and keep us in business for a long time to come. If an agency dissolves, it’s because they have not managed to make the transition into a strategic intellectual hub or they have not managed their bottom line properly – it is definitely not because of their size.