Media agencies must fundamentally change what they do, to survive
The demands brands make of media agencies are set to dramatically redefine their role in future, says an international study commissioned by Kepler.
Traditionally, businesses have outsourced their media-buying needs to agencies, who use that consolidated buying power to get the best deals for their clients.
According to the report though – which is based on an international survey of 150 senior marketers at a wide range of companies in the US, UK and APAC with revenue of $1billion or more – many of the world’s bigger brands are looking to take that operation in-house.
Half of marketers surveyed (52 percent) say they plan to eventually take all aspects of media investment in-house. Larger enterprises appear more committed to the idea, with 63 percent of respondents from companies with $10 billion or more in revenue considering full in-housing.
A wide range of services will be required
Instead, budget will go to agencies that have a wide range of services, most prominently those with data and technology capability, flexible talent and strong relationships with the tech platforms.
The data suggests traditional agencies are increasingly vulnerable, with 94 percent of respondents stating they will likely review their media agency relationships due to data and technology’s rise in importance.
“We can see our clients investing in organisational change, in-housing media capability and seeking a new kind of relationship with media and technology partners,” says Martin Kelly, CEO UK and APAC at Kepler.
Trust, transparency and ethics
What’s more, those agencies will also need to be mindful of the growing importance to brands of trust, transparency and ethics. Half of the respondents said they will not use media agencies that cannot provide complete transparency of trading practices, and a similar percentage (51 percent) indicated that corporate ethics will increasingly influence how and with whom they invest digital budgets.
According to Matt Green, Director of Global Media Services at the World Federation of Advertisers (WFA), clients expect their agencies to offer, amongst other things:
Depth in digital and data
Excellence in media planning
Breadth in market knowledge
Consistent worldwide execution of the above
“With the rapid transformation of the industry, media agencies are being asked to be many things,'' commented Green, on seeing the results of the research.
“More than this,” he continued, “clients expect their agencies to be responding to the growing Environmental, Social, and Governance (ESG) agenda. Agencies should be diverse and inclusive and should be offering responsible, sustainable and ethical media solutions.”
Mind the gap
The report indicates that as brands continue to bring technology and talent inhouse – and as first-party data capabilities and automated buying platforms become more important to campaign performance – a gap has formed between brands’ needs and media agencies’ abilities and business models. Almost two thirds of those polled (65 percent) said traditional media agencies do not have the technology expertise their organisation requires to maximise media investment
For the agencies of the future, media buying alone will no longer be enough.
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