Commentary
Midsized Media Shops Remain Strong
- by Melissa Lea , October 29, 2013
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.
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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:
- Eliminate large agency bureaucracy and process and can meet client demands quickly. This translates into a culture of "Yes" as opposed to a culture of "let-me-talk-to-10-people-and-get-back-to-you".
- Innovate and act/react quickly to the changing media landscape. There are no barriers and speed bumps to fast forward thinking. An example of this is with streaming radio and internet TV. Our agency fully embraced these new channels and at the birth of Pandora, we were one of the platform’s largest media investors.
- Evaluate multiple analytics solutions and recommend ones that are best suited to individual client’s needs. Large agencies must often sell their in-house solutions as best-in-class regardless of whether or not it is the right fit for the client.
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.
I could not agree more, I have worked with agencies like Blitz, Targetcast, Generator and others and they are all willing to try new things and act decisively while remaining smart. Outstanding partners who deserve consideration from all kinds of clients.
Absolutely true. Most common complaint directed at gigundo agencies: silos, thin on creative thinking. Truly creative thinking -- given access to proper tools -- nearly always favors the smaller over the larger organization across all categories of human endeavor, almost a natural law.
Its survival of the fittest. A smaller media firm can be innovative and proactive, while the giants have their hands tied by hierarchy and shareholder demands.
Agree with all the above comments. Under the big mega-agency model, corporate profitability, not client advocacy is the primary business motive. Simple decisions become very complicated and there are too many silos and not enough team.
By their very nature, small to medium shops are staffed by the entrepreneur and independent thinker who chafes at the big agency model and seeks a better way to ply their trade. These are often the disruptors and the innovators who are committed to doing the best for their clients. But unfortunately, the issue often boils down to capability: can anyone other than a holding company handle a $1000MM global assignment with a $500MM US spend? Given the scale of a major client, the decisions are often made based on factors that don’t necessarily focus on insight and innovation. As an aside: Whatever happened to the days when a client would put their creative and media at two or more agencies and have them compete with each other for best costs and best thinking.