SlideShare a Scribd company logo
Agency Opinion THEAGENCYISSUE
THEADINDUSTRY’S
INFLECTIONPOINT
44 | IMJ JULY/AUGUST 2018										 www.adworld.ie
There’s never been more data, tools and service providers
available to evaluate the business return from marketing
investments, yet it’s never been more challenging to be an
effective and efficient marketer.
www.adworld.ie		 IMJ JULY/AUGUST 2018 | 45
Ignite Digital’s map of the media landscape (above) shows the abundance of
choice available to brand owners in the Irish market. Is it any wonder clients
are confused and the long-standing conundrum of how to gauge advertising’s
effectiveness continues to frustrate us all, writes John Dunne. >>
ARTICLE
OVERLEAF
InfographicCreation&Design:DAVEFITZDESIGN|www.davefitzdesign.com
Agency Opinion THEAGENCYISSUE
T
he marketing industry is
experiencing unprecedented
change. Technology is
disrupting established
business models and
providing more choice. As a
result, the range of digital options available
to brand owners is getting more complex,
and this is prompting many brand owners
to rethink how they plan and buy media.
ADVANTAGE REMOVED
It used to be that media buying at scale
delivered an advantage, but media
fragmentation fuelled by significant
changes in consumer habits has largely
neutralised this competitive advantage.
Google and Facebook’s absolute dominance
in digital channels compounds this issue.
I believe we’re starting to see the rise
of new types of scale that will offer
media agencies a significant competitive
advantage – provided they can grasp
the opportunity fast. Agencies need
to focus less on buying clout and
more on data, talent and ideas.
• Scale of data: Media agencies are
realising that collecting, refining and
leveraging data are what’s driving
the fast growth and high value of
companies like Amazon and Google.
• Scale of talent and ideas: History teaches
us that every advance in technology places
a premium on superior talent. Technology
is a lever, but the availability of talent
affects how agencies scale. The challenge
lies with attracting and retaining this
talent in a marketplace where certain
data and programmatic advertising skills
are in huge demand yet short supply.
Media agencies also have to contend
with new, yet familiar, entrants to the
marketing services fray. A 2016 report from
the US Association of National Advertisers
damning agency behaviour opened the
door for consultants to start pitching their
wares to senior marketers, CEOs and CFOs
who trust their brands and competencies.
Names like Deloitte, Accenture, IBM, PwC
and McKinsey are starting to appear
in larger markets like the UK.
And, surprisingly enough,
not everyone is happy.
Accenture Interactive’s entry into
the media buying programmatic
space recently drew criticism over a
perceived conflict of interest because
it also offers clients a media auditing
service. Accenture Interactive operations
president Nikki Mendonca’s succinct
response turned the complaint back
on the accuser: “When you prick an
elephant’s arse, the elephant screeches.”
Agency groups’ reputation remains
damaged. Brand owners that spend
significant amounts on advertising
are still concerned about the lack
of transparency and trust in media
planning and buying activities that
the ANA report brought to light.
It’s heightened calls for a complete reform
of current media agency remuneration
models, at a time when brand owners
are under pressure to deliver better
outcomes and they are often limited by
legacy systems and a lack of resources.
VALUE-CENTRIC MEDIA
TRADING MODELS
ARE THE FUTURE
So, we have a burgeoning buyer community
that is completely dissatisfied with the
status quo – and with the proxy media
and marketing metrics. Clients want real
business outcomes, not non-committable
metrics or inconsequential media buying
cost reviews. In my opinion, media agency
groups’ linear TV buying moat won’t be
enough to deter consultants from storming
the barricades and plundering their clients.
New technology has created new
challenges for brands, forcing them to
rethink how they communicate. The
convergence of ad tech and martech, the
move towards a customer-first world,
and the increasing importance of tech
and data in the marketing function, has
created a new opportunity where agencies,
consultancies and specialist solution
providers are all fighting to own the
marketer relationship.
MEDIA IN-HOUSING
IN VOGUE
There’s a perceived wisdom that in-housing
can help cut costs by taking a layer out of
the system, while ensuring marketers have
a better understanding and more control
of their buying processes. In-housing
seems very practical – until you realise
the ‘unseen’ human resource that goes
into programmatic buying. An IAB paper
on programmatic in-housing estimates
that it takes at least a year to set up an
in-house programmatic capability.
The hype around media in-housing
completely overstates how pervasive it is.
Infectious Media found that only 1.4% of
marketers currently have an in-house media
team and only 4% use a hybrid model. Its
survey found that most brands don’t want
to do everything themselves. Clients are
under pressure to cut costs, but I’m not
convinced that media in-housing is the
solution to their advertising woes. In the
short to medium term, you can expect to
see hybrid models prevail where clients
will use specialist partners for certain
aspects of their marketing activities.
The adage, “that which does not kill
us, makes us stronger” holds true for
media agencies. They can still survive
and thrive provided they develop a more
value-centric approach that delivers real
business outcomes for clients.
John Dunne is an independent media
consultant and founder of Ignite Digital.
46 | IMJ JULY/AUGUST 2018										 www.adworld.ie
“I believe we’re starting
to see the rise of new
types of scale that will offer
media agencies a significant
competitive advantage –
provided they can grasp the
opportunity fast. Agencies
need to focus less on buying
clout and more on data,
talent and ideas.”
JOHN DUNNE (PICTURED),
IGNITE DIGITAL

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Ad industry at inflection point

  • 1. Agency Opinion THEAGENCYISSUE THEADINDUSTRY’S INFLECTIONPOINT 44 | IMJ JULY/AUGUST 2018 www.adworld.ie There’s never been more data, tools and service providers available to evaluate the business return from marketing investments, yet it’s never been more challenging to be an effective and efficient marketer.
  • 2. www.adworld.ie IMJ JULY/AUGUST 2018 | 45 Ignite Digital’s map of the media landscape (above) shows the abundance of choice available to brand owners in the Irish market. Is it any wonder clients are confused and the long-standing conundrum of how to gauge advertising’s effectiveness continues to frustrate us all, writes John Dunne. >> ARTICLE OVERLEAF InfographicCreation&Design:DAVEFITZDESIGN|www.davefitzdesign.com
  • 3. Agency Opinion THEAGENCYISSUE T he marketing industry is experiencing unprecedented change. Technology is disrupting established business models and providing more choice. As a result, the range of digital options available to brand owners is getting more complex, and this is prompting many brand owners to rethink how they plan and buy media. ADVANTAGE REMOVED It used to be that media buying at scale delivered an advantage, but media fragmentation fuelled by significant changes in consumer habits has largely neutralised this competitive advantage. Google and Facebook’s absolute dominance in digital channels compounds this issue. I believe we’re starting to see the rise of new types of scale that will offer media agencies a significant competitive advantage – provided they can grasp the opportunity fast. Agencies need to focus less on buying clout and more on data, talent and ideas. • Scale of data: Media agencies are realising that collecting, refining and leveraging data are what’s driving the fast growth and high value of companies like Amazon and Google. • Scale of talent and ideas: History teaches us that every advance in technology places a premium on superior talent. Technology is a lever, but the availability of talent affects how agencies scale. The challenge lies with attracting and retaining this talent in a marketplace where certain data and programmatic advertising skills are in huge demand yet short supply. Media agencies also have to contend with new, yet familiar, entrants to the marketing services fray. A 2016 report from the US Association of National Advertisers damning agency behaviour opened the door for consultants to start pitching their wares to senior marketers, CEOs and CFOs who trust their brands and competencies. Names like Deloitte, Accenture, IBM, PwC and McKinsey are starting to appear in larger markets like the UK. And, surprisingly enough, not everyone is happy. Accenture Interactive’s entry into the media buying programmatic space recently drew criticism over a perceived conflict of interest because it also offers clients a media auditing service. Accenture Interactive operations president Nikki Mendonca’s succinct response turned the complaint back on the accuser: “When you prick an elephant’s arse, the elephant screeches.” Agency groups’ reputation remains damaged. Brand owners that spend significant amounts on advertising are still concerned about the lack of transparency and trust in media planning and buying activities that the ANA report brought to light. It’s heightened calls for a complete reform of current media agency remuneration models, at a time when brand owners are under pressure to deliver better outcomes and they are often limited by legacy systems and a lack of resources. VALUE-CENTRIC MEDIA TRADING MODELS ARE THE FUTURE So, we have a burgeoning buyer community that is completely dissatisfied with the status quo – and with the proxy media and marketing metrics. Clients want real business outcomes, not non-committable metrics or inconsequential media buying cost reviews. In my opinion, media agency groups’ linear TV buying moat won’t be enough to deter consultants from storming the barricades and plundering their clients. New technology has created new challenges for brands, forcing them to rethink how they communicate. The convergence of ad tech and martech, the move towards a customer-first world, and the increasing importance of tech and data in the marketing function, has created a new opportunity where agencies, consultancies and specialist solution providers are all fighting to own the marketer relationship. MEDIA IN-HOUSING IN VOGUE There’s a perceived wisdom that in-housing can help cut costs by taking a layer out of the system, while ensuring marketers have a better understanding and more control of their buying processes. In-housing seems very practical – until you realise the ‘unseen’ human resource that goes into programmatic buying. An IAB paper on programmatic in-housing estimates that it takes at least a year to set up an in-house programmatic capability. The hype around media in-housing completely overstates how pervasive it is. Infectious Media found that only 1.4% of marketers currently have an in-house media team and only 4% use a hybrid model. Its survey found that most brands don’t want to do everything themselves. Clients are under pressure to cut costs, but I’m not convinced that media in-housing is the solution to their advertising woes. In the short to medium term, you can expect to see hybrid models prevail where clients will use specialist partners for certain aspects of their marketing activities. The adage, “that which does not kill us, makes us stronger” holds true for media agencies. They can still survive and thrive provided they develop a more value-centric approach that delivers real business outcomes for clients. John Dunne is an independent media consultant and founder of Ignite Digital. 46 | IMJ JULY/AUGUST 2018 www.adworld.ie “I believe we’re starting to see the rise of new types of scale that will offer media agencies a significant competitive advantage – provided they can grasp the opportunity fast. Agencies need to focus less on buying clout and more on data, talent and ideas.” JOHN DUNNE (PICTURED), IGNITE DIGITAL