Agencies Are Being Disintermediated by Augustine Fou Digital Consigliere


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Agencies are being disintermediated because clients are looking for more specialized skills as well as lower costs.

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Agencies Are Being Disintermediated by Augustine Fou Digital Consigliere

  1. 1. Augustine Fou- 1 - Disintermediation/ Disruption of Agencies - 1 - Dr. Augustine Fou September 2013
  2. 2. Augustine Fou- 2 - Source: ANA via eMarketer, Sept 2013 Brands Use In-House “Agencies” - 2 - 56% have already started moving work in- house to save costs
  3. 3. Augustine Fou- 3 - Source: ANA via eMarketer, Sept 2013 What In-House “Agencies” Do - 3 - • Magazine ads • Social media • Online display ads • Search engine marketing • Newspaper ads • Search engine optimization • Mobile advertising • Out of home advertising • Radio advertising • Tv advertising • Social Media • Display Ads • Search Marketing • Search Optimization • Mobile Ads Are being done in house because they can buy direct or use ad networks themselves.
  4. 4. Augustine Fou- 4 - Source: ANA via eMarketer, Sept 2013 Dangers of In-House “Agencies” - 4 - Seems like these can be overcome through training
  5. 5. Augustine Fou- 5 - Performance-based Incentives Source: Adweek, August 2013
  6. 6. Augustine Fou- 6 - Changed from 70% commission and 30% fee to 81% fee and only 5% is commission; Increasingly clients add in performance clauses Fee-based Compensation Source: Association of National Advertisers
  7. 7. Augustine Fou- 7 - Buying Direct from Facebook Source: AdAge RBC Capital Survey September 2013 More clients/advertisers are buying direct from Facebook (similarly with Google Adwords, Twitter, etc.); so the “buying power” rationale is no longer valid, or will be less so going forward,
  8. 8. Augustine Fou- 8 - IDC Study April 9, 2013 An IDC study has found sweeping changes in how mobile display advertisements are sold, with Facebook, Pandora and Twitter successfully wresting away control from advertising networks over the last year. “In display ads, the era of ad network dominance has come to an end,” IDC said. “New mobile ad budgets flow more easily into the coffers of publishers than into those of networks.” “Mobile display ads accounted for US$1.7 billion of spending in 2012, up from $700 million the year before. IDC expects mobile advertising spend to reach $7 billion this year, up from $4.5 billion in 2012.” Source: IDC April 9. 2013
  9. 9. Augustine Fou- 9 - So What? “More clients are taking pieces of work in-house for cost savings and also efficiencies. For things like social media, it makes sense to have someone from the company be the „voice of the brand.‟Also search optimization is something that occurs over time and involves content creation (continuous). These moves are disintermediating agencies and disrupting their typical sources of revenue and business models. How will they adapt? Or not?” Augustine Fou- 9 - - Dr. Augustine Fou
  10. 10. Augustine Fou- 10 - Dr. Augustine Fou – Digital Consigliere “I advise clients on what to in-source and what to out-source to vendors and agencies. I also help them set up metrics to measure the impact and efficiency of the tactics deployed.” FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM) MCKINSEY CONSULTANT CLIENT SIDE / AGENCY SIDE EXPERIENCE PROFESSOR AND COLUMNIST ENTREPRENEUR / SMALL BUSINESS OWNER PHD MATERIALS SCIENCE (MIT '95) AT AGE 23 ClickZ Articles: Slideshares: LinkedIn:
  11. 11. Augustine Fou- 11 - Related Articles Percent of Ecommerce from Mobile By: Augustine Fou, March 27, 2013 Smartphone Penetration Exceeds 50 Percent By: Augustine Fou, Mar 21, 2013 Publicis Omnicom – Bad for Clients Shareholders and Agency By: Augustine Fou, July 2013 Search Kicks Display Ads in Effectiveness By Augustine Fou, April 2012 Digital is a Philosophy By: Augustine Fou, March 31, 2011 Augustine Fou- 11 -