Media...the change is coming

2017 has been a bumper year for Media…so much change and so many things to consider for our clients.

Whether we like it or not, John Mandel’s comments at an ANA Media event in March 2015 have had a lasting effect on our industry – 2? years later and the impact is still very obvious in most of the conversations we have (with clients and agencies).

Much like a stone that gets thrown into a pond, the ripples last longer when the pond is bigger. We have to accept that the media landscape is one of the largest ponds you will find, and as such, we are going to continue feeling the ripples for some time to come.

Some commentators have called for a complete change, some clients have called for a new model, and some agencies have called for clarity (they don't want to be tarred with the same brush as some of the more obvious protagonists) ...

And some (like me) have called for better measurement and accountability across the board. Only the truly na?ve believed Martin Sorrell when he claimed that there were no rebates in the US market in 2015 Adweek 2015 – given what has been reported since, he was either telling porkies (English for Lying) or his agencies were lagging behind the competition – either way, the current reality makes you wonder what the truth really was….

So, what do clients do about this? I have been lucky enough to work with a number of clients over the last three years that have been trying to make sense of this new reality which has given me a front row seat for the drama that has played out.

Some have reacted badly, Client A pulled the trigger and went to pitch as the pressure from their board was so great. They had enjoyed a good relationship with their incumbent but the ‘noise’ from the press was so great that they were forced into the decision to pitch. Thankfully, we were able to ensure that the pitch tested the agencies on a number of capabilities including strategy, planning AND their ability to buy well. We were also able to set some ground rules about the level of transparency available to the client on their investment with the new agency.

Client B was less inclined to pitch and we were able to work with the incumbent to negotiate new terms to cover the future relationship.  We also made a point of changing the structure of their compensation arrangements to better incentivize the agency to deliver across the board for the client (client service, planning, buying and business results). Whilst the negotiations were fractious at times, the client and agency were able to agree terms that allowed the leadership of both organizations to return to head office with their heads held high.

Client C was a new media client so had no baggage to carry into the situation. What was concerning from this client was their outright suspicion of the media industry irrespective of agency. Part of my role in the pitch process for this client was to encourage them to show some trust in the agencies that were pitching (and that could win their business). The client had a blatant distrust of all the agencies that was driven by the transparency debate…they were not media insiders but they still had a very strong opinion of the industry.

All of these pitches demonstrate the far-reaching impact of the transparency debate over the last few years. You could look at this negatively but I prefer to look on the bright side…

One of the great benefits of the current situation is that it has encouraged brands to ask more questions about their media investments.  We have been working with clients that are suddenly interested in the details when it comes to their media investment and this has led to many of them taking a more proactive role in how they manage media.

In the last few weeks we have heard how the team at Deutsche Telekom have reimagined what the media supply chain can look like and acted on the change they want to see - bit.ly/2z9wB0P . They were deliberate and methodical in their approach and worked with industry experts to dig into the opportunity they had to evolve the way they invest in media as a business.  This has resulted in a complete redesign of how DT works with agencies and what activity is done in-house vs. externally – whilst this is not the first time we’ve seen this, it is definitely one of the biggest advertisers that we have seen publically make this type of change.

We should expect to see more stories like this in 2018 as agency scopes are fragmented and clients continue to take more control. As clients see the industry change they will have more confidence in taking the leap themselves and exploring new structures and ways of working.

What will this mean for Media Agencies? – one thing for sure is that their competitive landscape just became even more complicated as they will now be competing with internal client capabilities and vendors that will plug directly into those clients. Agencies are going to need to recognize where they truly differentiate and then hone in on becoming excellent at those services – this is not the death of the agency model but it is definitely a wake-up call and the smart agencies are already moving on this.

Smaller, independent agencies that do not rely on buying power to compete are going to have the chance to make more of an impact in 2018 – top talent is already leaving a number of the larger agencies and they have to land somewhere so I expect to see a few new independents opening up in the new year.

However it turns out, I believe 2018 will be a very interesting year for Media and I’m already looking forward to getting involved!