Last week I had the pleasure of chairing The Drum’s Digital Convergence event in London. The event looked at all elements of convergence in the digital world but the one that interested me the most was how the roles of agencies and in-house marketers were blurring.
In an increasingly programmatic world, why do clients need media agencies in the usual traditional client/agency relationship? It’s a potentially market-changing moment for media agencies and, in turn, the big networks. Just consider this: In a recent poll of Fortune 500 Brands, 60% said that they were actively considering replacing agency work with in-house capabilities. We all know that the ad tech vendors are attacking the current model by directly approaching clients. We know that Publishers would love to circumvent the agency. So how are agencies going to stay relevant?
As you would imagine, your opinion is based on where you sit in the food chain. Different panellists took very different views. Nishma Robb, Chief Client
Officer at iProspect, took a measured view.
“Of course, we have to change as the landscape and, indeed, marketing has changed significantly. The scope of work as well as the key stakeholders have changed and so current structures and measures of success are not necessarily aligned to the clients’ businesses. Fundamental to the change is the way agencies are remunerated. The current payment models are out of date. A method of reward needs to be established that aligns interests and goals and truly recognises and rewards the value that an agency can bring.
Technology and data ownership also change the dynamic between clients and agencies and so relationships have to evolve to reflect this closer partnership as well as technology independence.”
On the other hand , Graeme Douglas, Interactive Creative Director at Wieden and Kennedy, was particularly scathing of the agency mode, a view possibly shaped by his time at Carat. He told me that the buying process should become totally automated and that this should be done by brands. Conversely, Marco Bertozzi, Executive Managing Director at Vivaki, said that actually the process of programmatic buying was too complex to sit in brands, especially when questioned on whether brands should build their own trading desks.
That’s an interesting view but you wonder why this is such a big thing now. Some clients have always bought their own media. Many clients currently buy and manage their own paid search media. This, too, has always been the case, but hasn't sparked a discussion on the role of the agency at the same level of intensity.
Bertozzi is one of the more outspoken figures in the UK market and he made some excellent points. One which registered with me as being at the crux of this argument came when he was defending the role of trading desk. When questioned about the value the TD added and how transparent it is, he turned the question on its head. He asked clients to look at all digital media buying across the board. Did they understand who took what? Did they understand how much actually ended up with the Publisher? Did they know if the agency had bought the media upfront? Why single out the part of the process that is completely reportable?
After the event, I caught up with Mark Syal, Head of Media at Essence. As you might think, Mark took a different view when I asked if the current agency model is out of date.
“Media evolves so quickly that you could always argue that the established way of doing things is always out of date. Smart people in media and advertising are always continually working on new ways of doing things, and new ways of adding value. A new model emerges from time to time. It is possible that we are on the cusp of a new agency model.”
And so having to spoken to some of those closest to the situation, it seems that there are as many viewpoints as there those involved. One thing seems certain. In a media landscape that now increasingly relies on automation, we have started to ask more questions about the whole market and the role of players within it. That can only be a good thing.