Many media owners are bringing specialists and planners in-house to oversee operations. Michael Bratt finds out why this is happening and how it is changing the media agency game.
If media owners bringing talent in-house is indeed a trend, it signifies many important changes for the media industry with numerous possible consequences. One of them is that clients could potentially shift from spending their money directly with media owners. It also blurs the line between the two groups, moving away from media owners offering a constructive service to agencies, to owners competing with agencies.
The danger for clients is that they may be deprived of a key service that only media agencies can offer – the ability to optimise budgets across media types and within media suppliers. But just how common is this practice?
Understanding the challenges
Celia Collins, MD of Carat South Africa sheds some light. “This trend is becoming more prevalent, particularly among the larger media owners. I believe that the tough operating environment that media owners are working in is the reason for the shift,” she says, adding, “As budgets become tighter and clients demand more return on investment, media owners have to compete for every cent. It will become more and more necessary for media owners to have access, not only to good data, but also to people who understand how this data should be used and the challenges that media agencies face.”
CEO of Spark Media, Gill Randall, also cites the influence of international trading practices, the different ways in which media deals are structured around the world. “Particularly in Europe, deals are mainly based on guaranteed delivery of an agreed price or audience, with the implementation of plans shifting to the media owner. This way of buying media is spreading in South Africa, where ‘gut feel’ is shifting to the more scientific approach of cost of delivery,” she explains.
But, is this move necessarily a bad thing for agencies and owners? Collins doesn’t think so. “If managed correctly, both agency and media owner will benefit from this shift. Clients should also benefit from improved campaigns. The main advantage for media owners is the substantial value that an experienced planner can give to them.”
Maximising the benefits
One of the most recent examples of this happening is the creation of Spark Media by the Caxton Group. Randall says, “Even before the creation of Spark, the marketing services/research team offered support grounded in media analytics and metrics to the sales team.” They’ve also taken the process one step further with the creation of a ‘Big Ideas’ department which offers a media strategist position – someone who advises in-house on how sales can work better.
Randall describes the recent move as a must. “Media owners need to be more informed and strategic about their platforms and also have the ability to advise on how to creatively use the media type to maximise its benefits,” she explains, adding that agencies cannot be expected to know everything about the multitude of available channels that are now present.
So, experts now employed by owners can assist and guide them. Randall definitely sees this trend gaining traction in various forms and continuing in the future. “I see it as really positive for both media agencies and media owners – a way to upskill staff on both sides, create specialists and ultimately work together to maximise communication in this fast-changing landscape. I’m hoping that if we upskill our entire industry, we’ll begin to attract higher level professionals back into the media and communication industry,” she asserts.
Media agencies must remain relevant
Speaking from the perspective of the OOH industry, Jacques du Preez, managing director of Provantage, says this trend is happening in television in particular and he expects it to take off in the OOH industry soon. He adds, “It hasn’t happened at Provantage yet but it will. The reasons for the shift in the OOH industry are slightly different from why it’s happening in other forms of media. Media agencies are understaffed and under severe margin pressure. There are also too many OOH media owners and a lack of OOH media planning tools and data.”
Du Preez sees this shift as offering more value to clients and brands. He says, “The future for media agencies is not about protecting themselves but rather, better collaboration with media owners that offer it as an added service. The bottom line is that OOH media owners who bring in media specialists and planners will assist media agencies with resources, time and skills.”
Tanya Schreuder, director at Vizeum South Africa, has also witnessed this trend happening, particularly in television and amongst digital media owners. She reckons that it’s not necessarily a new thing and has been offered as a service for many years.
She affirms, “In the online space, due to its specialised nature and the resources required, it’s gong to happen even more.” But, she believes media agencies still have the advantage, saying, “The strategic role still sits with media agencies. Media owners cannot offer a consolidated service across multi-channels. Our specialisation is understanding the consumer journey across multiple touch points, which media owners cannot offer. The media owner should continue to be the expert when it comes to their specific channel/s.”
Client objectives are priority
Collins believes that in order for media agencies to remain relevant they need to, “Build constructive relationships with both their suppliers and their clients. If a media owner feels that they’re being treated as a partner, are given sufficient information about a client’s objectives to deliver appropriate proposals and are given a fair hearing, then they’ll be less likely to try to bypass the agency.”
Also, they need to consider the value they offer clients and become more than just a company that buys media space. They must be able to deliver more strategic and business guidance to ensure their continued relevance. But Collins adds, “Media owners have a role to play in the shift. They must ensure that they do not alienate media agencies in their struggle to obtain a larger share of the budget. They need to understand that delivering on clients’ objectives should be the ultimate priority and that not all media are equal.” Randall agrees that in order for media agencies to remain relevant they need to embrace this shift as another information and support resource.
Josh Dovey, CEO of Omnicom Media Group South Africa, gives a different spin. “Media owners may be employing ex-agency people to give them a better insight into sales, but I don’t see this becoming a trend. Clients don’t want to deal with 3000 media owners – they want to deal with their agency who advises them about how they should spend their money,” he says.
One thing is certain, the way consumers make decisions around brands and services has changed and the process of communicating with them about what companies offer also needs to change.
Collins concludes, “The traditional models of both thinking and operating need to be adapted. The communication industry is very dynamic and media agencies and media owners need to build this flexibility into their businesses.”
This story was first published in the November 2015 issue of The Media magazine. Read the digital version here.
