There has been lively debate about the future of media agencies, especially as much seems against them: direct deals between owners and clients (overriding the agency’s role), reduced commissions in place of the agreed-upon 16% agreement and issues of procurement. These factors have depleted the media agency’s image and worth on the media platform.
Where the media agency falls down
Media agencies have very little direct contact with consumers. Their knowledge of the target market comes from information provided by client – which is often off-target.
Media agency knowledge of consumers’ behaviour is the demographic profile provided by the All Media Products Survey (AMPS) which is based on claimed and not proven involvement. The media agencies have very little hard information about what media consumers interact with daily: billboards, activation programmes, word-of-mouth, public passenger vehicles, in-store displays, wall posters, sampling and more.
In addition, their knowledge of communication strategy is limited. Their advice is based on Telmar’s algorithmic evaluation of AMPS data. Media agencies do not fund any research at all. All that they do is massage AMPS data.
Abroad consumer media habits are directly related to the product category and the most used media forms the media plan. No media agency in this country digs this deep. It’s easier to use the Telmar/AMPS demographic segmentation.
If the Media agency is only a manipulator of AMPS data then it is only messenger, rather than a partner that is in touch with current consumer media behaviour. Ask an agency about the current media habits of the urban black consumer, where the money is. The chances are you will get a blank stare.
With the advent of new media, consumers change their behaviour, almost overnight. The digital behaviour of consumers is a classic representation of this and is showcased on Twitter, Facebook and other social networking sites. The information about mobile usage is scant. What marketers need to know is what media consumers interface with now, not yesterday.
The media agency needs better support
A shift in perspective is needed and the media agency needs to come to terms with certain truths. Yet, they face a hostile financial environment
The Problem of Procurement
Marketers are looking at the problem from the wrong perspective. They want to cut media and creative costs the same way they cut the cost of nuts and bolts. This doesn’t work because media and creative bring emotion into the picture. There is no emotion involved in nuts and bolts.
For example, the creative used in the Louis Vuitton ads appearing in Vogue matches the mood created by the magazine. That ad appears in Time magazine and the match is the same. Both magazines appeal to the elite.
Rembrants’ media negotiations were classic. They were negotiated by a team that understood emotive value. Media agencies operate on slim margins and to generate additional revenue they need to use their collective buying power to negotiate confidential discounts.
Why the role of the media agency and the creative is still paramount
Advertising isn’t seen as an investment and an essential tool for success, but rather as a steep financial cost. Marketers might punt advertising, but when the former runs into cash flow problems, the first cut considered is advertising spend. The primary reason for this is simply that return-on-investment can’t be measured in pure financial terms.
The bean counters know the consumer’s memory of a brand doesn’t stop the day you cut off its advertising support. The brand can be kept visually alive by activity at retail level: maintaining a strong shelf presence and in-store promotions. Small ads do get noticed.
But, what astute marketers have learned is that if a brand stops advertising, collectively the noise created by its competitors will cause its presence to fade and eventually it will vanish from the consumer’s shopping list. It is only through trial and error that the more successful marketers learned that in a competitive world, you must continue to promote brand value.
A classic example is the launch of the iPhone. As a product it knocked the socks of the competition by capturing the public attention and becoming a must-have brand.
NOTE: This opinion piece was written in response to a function organised last week by Wag the Dog Publishers in association with the Advertising Media Forum (AMF) and the Advertising Media Association of SA (AMASA). A panel, consisting of media agencies and owners as well as clients, debated the salient points affecting the future of the media agency.
A link to the original article written in about the event can be sourced on the site: http://themediaonline.co.za/2011/03/top-media-players-congregate-mull-industry-future/