She quotes from three industry players — Sonobi’s John Donahue, Unified’s Jason Beckerman and Blackwood Seven’s Henrik Busch — all representing ad-tech firms that operate independently from the big four global agency holding companies. Their reactions can be be summarized as: “Not too much has changed, and marketers should do more to retake control of their ad dollars in digital LaLaLand.”
While I agree that marketers probably could do more, I take issue with the tone of this and other industry reactions to the one-year anniversary that not much has changed. From working directly with some of the largest advertisers in the world, I can tell you that a LOT has changed.
Digital marketing is no longer the perceived silver bullet. The dismantling of the myth that digital advertising is the only smart thing to do had been underway for a while, and the ANA report kind of pushed it further faster.
The ANA report also coincided with Facebook and Google being confronted with poor measurement results, poor advertiser placement content protections, fake news challenges, ad blocking and other “misdemeanors.”
At the same time, both the ANA and the World Federation of Advertisers showcased how much the middle men, in many cases owned and operated by the big agency holding companies, were making/withholding from marketers’ ad dollars.
All these events have not led to a decrease in digital ad dollars — but are causing a major shift in both where and how these dollars are placed.
Marketers have become much smarter very fast, and now take much tighter control over what goes where, and for how much. And more marketers manage most of the process in-house.
There’s a new sheriff in town: contractual terms and conditions. Almost all marketers we work with or speak to have already, or are in the process of, updating and changing their agency contracts. And sure, media is a very large part of this, since it typically represents the largest envelop of marketing.
But do not underestimate the impact of production decoupling and off-shoring, and creative agency account consolidations (remember, production is under scrutiny as well, by the Department of Justice!). Some of these efforts are addressed in a pitch, but many more are managed through not-visible-to-the-public meeting room negotiations between the incumbent agency and marketers. The new contracts significantly touch the most profitable parts of agency holding companies.
Agency holding companies are feeling the financial pain. Sir Martin Sorrell was quoted this week saying that the industry is facing its biggest upheaval since media split from full-service ad agencies. One WPP response to has been to merge Maxus and MEC, two of the holding company’s media agency brands, to be more productive (read: save money).
None of the four global agency holding companies reported any significant growth over the first quarter of 2017 — while advertising budgets, mainly driven by digital, remain robust and are growing. So there is more money sloshing around, but the agency holding companies are making less. Not much impact from the ANA report, you say?