As Brands Build Their Own Data Management Platforms, Will Agencies Become Advisors?

Brands building Data Management Platforms is the big industry trend to watch going forward in my opinion, and not just because it makes a lot of sense for a brand to collate the data it has in a central repository and perhaps add useful third-party data to the mix. The trend, for me, could be about to significantly alter the way brands engage with agencies. If they have their own data which can be plugged into a programmatic platform to place targeted ads on relevant sites, you can foresee that some will start to do a Specsavers and wonder what they need an agency for.

In fact, this was something I was talking about with a senior executive at an agency owned by a holding company with its own well-known trading desk. How the relationship will change as brands develop their own DMPs, or at least exert control over them if they are run by a third party, remains to be seen. What is certain is that the relationship will change.

Media agencies have one huge plus point going for them, particularly for a global brand. They exert so much buying power that nobody can match the prices they can negotiate, and thus the current round of media reviews have focussed on who is going to do the buying and a few contractual points, not whether there would be any buying to do in the first place.

I have a nagging suspicion that when the megadeals signed this year are looked at again in a couple or three years time things will be different, and I'm not the only one. There is a growing body of opinion that agencies could turn into advisors rather than "doers." If brands have their own data and if they are, by then, mostly buying display programmatically, they are in the same position they would be if they had an agency. A media buyer may be able to get great direct deals, but if you're buying in an auction, the price is dependent on market forces more than the bargaining power of a holding company.

So, when I was talking to senior execs at holding companies not so long ago about this year's round of renewals, the opinion was that little would change right now. However, brands buying programmatically and running their own DMP in a couple of years makes things very different. The doing will be done by the brands leaving the agencies to be more on the advice side, offering strategy support and perhaps linking that up with creative. They're likely to still be media agencies too, but I don't think it's going to be as much of a given as it is today. There will always be brands who want to get on with what they do and leave the planning and buying to experts, even if it programming a programmatic platform.

By taking control of their data that informs automated buying, brands are putting themselves in the position to act on their own behalf. Some will and some won't -- but one thing is certain: agencies will become advisors -- at least in part -- rather than "doers" to some brands. If you want to know where the industry is going, just follow the data.

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