It’s a fact that the role of media agencies in today’s world is changing, that their functions are morphing as business models and the way in which they operate is questioned.
Wavemaker SA CEO ,Lwandile Qokweni, and Wavemaker’s global president for market development, Ajit Varghese, recently shared their insights into what’s happening in the space.
Varghese points to a common set of challenges agencies are facing around the world.
“Agency models are being questioned, the way they work is being questioned in terms of new ways of working for clients. And it’s not just agencies. Digital media is being questioned on its effectiveness and efficiency,” he explains.
Incumbents losing long-term clients
Media agency reviews are more common, and many incumbent agencies are losing long-term clients. Varghese says this is the natural cycle in the industry, but admits much of the action stems from increasing client/brand challenges in the market. These include financial constraints, concerns around fake news, true views, safe advertising environments, true return on investment (ROI), and dictation from client executives and shareholders.
“Clients are facing tougher environments at a financial level, a sales level, an economic level, and even at a government policy level. It’s natural that the biggest item on your balance sheet is being questioned and different ways of working and partnerships are being explored,” Varghese elaborates.
Much attention has been paid in the agency world to in-souring by clients of tasks that traditionally sit with agencies.
Varghese recognises this may be happening, but sees it as a positive. “It’s an opportunity and forces us to think ‘what if business goes away?’ It throws up new ways of working and makes us look back at what our core strength is,” he says.
Audience planning, understanding the content eco-system and the ability to tell clients what works with which segment of the audience and whether all of it is performing, are the strengths of agencies that clients cannot match at this stage, hence the role of the strategist never goes away. He compares media agency in-sourcing to the financial sector, where people are getting rid of financial advisors in favour of making their own investments. Just because this is happening, doesn’t mean advisors are out of a job, just that their role has to evolve.
Qokweni points to the fact that in-sourcing is nothing new, and encourages agencies to “read and understand the trend, and find and own their role in it and make sure that they are the true expert in their space”.
Consultancies eating agencies’ lunch
Much talk in the media agency space has also been about the threat of consultancies. Qokweni admits that they are “definitely competing”, with “credible backgrounds and research and information that agencies may have in different ways”, but pinpoints the thing that gives agencies an edge.
“While you will get competition, you will only become strong when you focus on what it is that defines you and how you’re better. Our understanding of marketing and media is the thing that’s going to help us win. Consultants may understand business and business growth, but it often doesn’t quite translate,” he explains.
Not enough agency talent
Many agency people have pointed to the challenge of talent retention, with both clients and consultancies swooping in and snapping up people, as they can offer higher salaries.
But Qokweni has a different view. “The conversation we should be considering is, how much talent is there really … The bigger problem is that there’s only a handful of them, so when they do go elsewhere, it’s hard to find other people. What we should be doing as an industry in general, including clients, consultancies and agencies, is we should be growing the talent pool,” he believes.
He wants more promotion of careers in media agencies as well as lower costs for becoming media specialists, which at present are quite high.
The Wavemaker journey
In May last year, Wavemaker was officially launched in the South African market, through bringing together MEC and Maxus. Qokweni spoke about the journey since then.
He also elaborated on some exciting projects that the agency is currently working on.
Creativity has been dialled down
With the explosion of data and digital, Varghese believes that creativity has been dialled down by agencies, with them moving their pendulum more to the logical, data-driven part of the business.
“We forgot that our biggest difference on the table is actually creativity and marketing solutions … We realised we had to get the balance right between logic and magic to ensure benefit for the clients,” he explains.
Wavemaker is a big fan of partnerships and Qokweni sees today’s environment as more collaborative.
“The more we work in silos, the more clients businesses are affected. Whether its creative agencies and media agencies coming together, media agencies and publishing houses coming together, media agencies and technology companies coming together, or media agencies and data companies coming together, the more we work in silos, the more we are not being productive to clients’ businesses,” Varghese comments.
“At the end of the day, if the client is not successful in the market, there’s no business, none of us gets the business,” he adds.
He encourages agencies to focus on three primary elements: the consumer, the business of clients, and the product with new ways of thinking and doing things.
Supporting the global CEO
In his current position, Varghese plays a support role to global CEO, Tim Castree, focusing on the developing markets that the business operates in.
Heading up 60 to 70 countries is too wide a role for a global CEO to give attention to all the markets, so Wavemaker split the role. Castree focuses on the top 10 markets, which give the business two thirds of its work, while Varghese oversees the other almost 50 markets, which provide one third of Wavemaker’s business.
“We use a lot of technology to connect with our markets. We have formed a community way of working, for example we’ve created a content community across 20 countries. They talk every month and disseminate learnings, discuss issues and how they grow the business,” he says.
Follow Michael Bratt on Twitter @MichaelBratt8
Want to continue this conversation on The Media Online platforms? Comment on Twitter @MediaTMO or on our Facebook page. Send us your suggestions, comments, contributions or tip-offs via e-mail to email@example.com or firstname.lastname@example.org