The Future of Media agencies

Media agencies, as a widespread phenomenon, are only 10 years old. Before then only a couple of true independents like Carat and CIA were active. Right now we are facing the next stage of the evolution; Evolution 2.0. So we have to ask ourselves: why do clients need us?

As the physical media moves into a digital world, the key thread throughout is that media will become digitised. What this effectively means is that it should be easier to segment and track individual consumers of media and our client's potential customers. So far nothing new here, other than the fact that we have to develop more tools to tell our clients how their budgets are working.

Tracking, monitoring and checking on deliverables is an area of growing influence and client expectation and is very much part of the full circle of planning-buying-delivery. This obviously ties in very closely with what the client is getting for their money, no longer just in spots, R&F and discounts, but what their money is actually doing for their brand. So here I think is the first big change in media agencies.

We are expected to know more about how our clients budget are working. This does obviously not come as a complete surprise as we at MPG as well as our colleagues at other networks are providing ROI solutions as best we can. But are we actually delivering on this promise or are there other companies out there that can do a better job of this?

Clients are willing to pay research companies and consultancies to help them find these answers. They are willing to accept our efforts at providing these services, but seldom are willing to pay an increased fee to have these services. A crucial distinction.

As for deeper consumer-insights, we are delivering these with an ever increasing sophistication level to be able to get an edge on our competitors and very much overshadowing an area traditionally held by the account planners and strategists at creative agencies. Not a bad thing and generally when conducted well is a real bonus to our clients. But to continue to conduct this for all clients is a huge investment and the fees do little to justify this necessary investment.

We are expected to deliver deeper consumer insights but are not the first port of call. Buying is becoming increasingly commoditised depending on the medium and the market. Clients are cutting more deals themselves and want to be involved in the negotiations to ensure they get all of what they perceive should be their benefits, with the inevitability of this being a zero-sum game.

We are effectively being paid to be the banker and administrator, and not for buying per se. With digital ad-networks and the big players like eBay, Google and Yahoo! moving into this area and delivering the clients direct solutions, media owners themselves are increasingly dealing with clients directly to cut down the costs of dealing with agencies.

Coming back to my initial question, what can we do for clients and more importantly why do they need us and how do we adapt? In my humble opinion, as an industry we are for the most part information gatherers that throw a sauce of 'expertise' over the data and sell that as a service. But in reality we are bookkeepers and coordinators of information. This is what we are quite good at and in effect this is what the clients pay us for. This is also why they do not pay very much, simply because they do not value our services to the same degree as they do management consultancies and research companies. Time to look in the mirror as an industry indeed.

So where is this all going and how can we be ready for the future? First of all we have to realise that we are moving into a more measurable world. The media industry is becoming ever fragmented, the traditional payment model is down to a bare minimum, clients are demanding more and paying less and the cost of doing business on agency side is ever-increasing.

So the agency of the future will no longer exist in it's current state as jack-of-all-trades as clients no longer value our service, we should see the agency in one or a combination of the following.

A pure-play consultancy part that filters the current information and provides proper in-depth insights and analysis and provide top-thinkers to do so. A cluster of smaller speciality agencies that each provide a significant depth of knowledge for a specialist industry. A gatherer of information that can provide a digital platform where all media research is integrated into a platform, where media owners can post their availables and clients can check availability, price and book and also press a button for all post-buy and multimedia crossover and plug this straight into their own sales and marketing data. Banking service that facilitates the media buying and admin process.

Many agencies are already taking the steps to adapt to this new world, for those who do not, a business model in the margins will be what remains after Evolution 2.0.

Paul McNeill

Chief Executive Officer - MPG Greater China