Media Agency Programmatic Future
Consulting, Digital Transformation, Trends

The Role of Agencies in the Programmatic Age

The “Media” discipline has come a long way over the years. Media, back in the 50ies and 60ies, was mostly done in dim-lit rooms by accountants and secretaries. Over the years, the discipline has transformed into a stand-alone multi-billion industry all by itself. Technology and a cultural shift towards mass procurement enabled the steady but hefty growth in which media agencies offered the compass to navigate through a rough and stormy sea. But when was the last time you used a compass in the age of GPS and Google Maps to find your way?

While most people can do without a compass nowadays, it is still a tool of high importance in high- performance jobs such as professional climbers or pilots who still rely on mechanical instruments. Just as Wolfgang Riepl’s law applies to media channels not being completely replaced by newer ones, it also holds the truth in the fields of technology but also the way that the communications industry will shape up over the next decade.

Putting the Client in the Spotlight

When looking at the market capitalization of the big global advertising holdings, the pattern is clear: an industry-wide decline while independent players that blurry the borders between channel, agency and vendor like Google, Facebook and Amazon soar. Agencies, as we know, them are under attack from all flanks: it is not only about the GAFA flexing their muscles, it’s tech companies such as IBM and SAP, consultants like Accenture Interactive and Deloitte Digital, as well as clients among others that identified the market need for something agencies often fail to offer: absolute client-centricity and full transparency.

The root of the issue stems from the business model that agencies are still mostly paid by volume of media booked. Which seemed like a great metric for auditors to justify their pitch recommendations, has come back to bite agencies as that all they are doing is being commoditized behind a fee percentage on bought media. In the end, all the nice analyses and slideshows boil down to agencies being paid for pushing through volume, regardless of what the client needs. When in doubt, media agencies will always find creative new ways to spend whatever money one throws at them.
This is the age of subscriptions and pays for performance models. We know it from Netflix and Amazon. And this has rendered media buying a commodity everyone can offer.

For agencies to evolve, they will need a deep shift in culture that invites price transparency on all levels to orient themselves towards the client of tomorrow. And this starts by waving percentage-based commissions goodbye and finding leaner models to monetize.

Culture Beats Establishment

Besides pricing models, the modern client needs expert orientation to navigate through the vast sea of today’s possibilities. The need for extensive knowledge of the systems, the formats and the underlying technology is acute, yet talent is often hard to find. The war for the best navigators is ongoing as agencies, advertisers, vendors and players from other industries try to win over the best brains. A solution to the problem is partnering up for expertise. adverserve offers an existing team with long-standing experience, technological know-how and the dynamics you need to thrive and grow sustainably in the future.

As much as specialization is important to go in-depth, it is the generalists that have been a dying breed throughout the industry. Strategists and planners seem dispensable in times of stagnation but especially in turbulent times of upheaval, the general lack of generalist talent is ever apparent in the lack of direction agencies have themselves in dealing with their very own core business.

The key to today’s best heads is transferrable knowledge and experience. Being able to see what clients themselves often cannot see is the prime asset of any good consultant. The ability to come up with solutions that also work form the rare kind of employees everyone is looking for right now, regardless of where they currently work. In this regard, the agency of the future needs to create an environment in which those talents want to express themselves.

A dimension often overlooked is the impact millennials and the Gen Z have on the industry as they often break, challenging structures created by the Baby Boomers and often find themselves in agile structures at start-ups or tech shops. To get the best out of the best educated, most curious and digitally native generations means to challenge the corporate hierarchy: It’s not anymore about job titles or spearheading a team, it’s about impact, purpose and balance. The future rests on a generation that wants to collaborate inter-disciplinary but working agile towards a common goal.

The agency of the future is much less hierarchically driven than they are today. It’s about working in settings that appreciate output over hours, creative problem solving over knowing it all and leading a successful project instead of having a flashy title on the business card.

Agencies need to embrace the changing culture of working to find, nurture and keep their best heads. Otherwise, it will be a hard task to satisfy the coming generation of marketers.

Where All the Roads Lead

We believe that building the agency of the future right now is not optional, it’s a necessity for survival. The end of media buying is nigh in due time as the programmatic world brings transparency, efficiency and accuracy into the old media world. As adverserve, we are the programmatic pioneers. We have successfully done programmatic radio and OOH campaigns with our clients and we are currently developing a programmatic revolution for the print market. We have seen what’s possible on the technical level and the cost improvement for clients will progress these young fields into our future sooner than we think.

When media buying across channels will become accessible to everyone instantly, on the go and with absolute transparency, being experienced buyers does not suffice anymore. Agencies will inevitably have to become consultancies, facilitators or on demand capacity. The key to future success is being part of the current change in buying automation. We are currently seeing slight pushes into this field, especially by consultancies and specialist agencies while the traditional networks see the future centralized within their own holdings instead of independent technology.

So, what is it that we are talking about when we mention a programmatic future? Easy put, the ability to buy every kind of media instantly, transparently and automatically. Regardless of whether it is digital, TV or print – everything will be available on a centralized marketplace at market prices without any third-party mark-ups. The trend might not be the game changer, what follows, is, though: when buying is completely taken over by new technology, an industry must define its role again as there simply is no need for media buyers and no need for middlemen. It will be a time for people who know what makes sense to buy to interact with other things to buy: the media planner of tomorrow will be, more than ever, someone who can complete a puzzle.

Clients have the biggest upside in progressing the programmatic future. Ultimately, it will bring them more transparency than ever, the ability to buy for market price as well as being absolutely in control of every Euro spent. Agencies will need to adopt new business models around this new setting and a good guess is to bolster up consulting capabilities as well as strategic thinking across departments.

What Characteristics Should the Agency of the Future Have?

  • Consulting – Consultancies are the new advertising agencies. Agencies should dispose of extensive knowledge in their field and be able to offer strategic services to brands.
  • Customer-centric – Keeping the agencies’ and the clients’ worlds separate belongs in the past. adverserve works hard to deliver a positive customer experience, acting as a true partner and counselor to our clients.
  • Creativity – Creativity in all its forms remains at the core of every agency practice – creativity of ideas and account development, creativity in media strategy and execution, and creativity in technology evaluation and deployment.
  • Curiosity – Digitalization has turned the marketing sphere into an amazingly dynamic field. While it is impossible to learn and know everything, showing interest and an eagerness to learn is the most important step.
  • Data-driven approach – Data is often described as the oil of our times. It can help in almost every stage of an agency’s work: from segmentation and targeting to campaign optimization.
  • Ad technology – Making the most of the available ad tech systems can be a short way to success. AI-powered technologies help marketers to better understand and predict the user journey and optimize results. In our last blog post, we wrote about what exactly Artificial Intelligence in marketing can do for you.
  • Digital Natives – There is no opting out of the digital transformation. A future-oriented agency needs to be on top of the movement and breathe digital.
  • Innovation – For true success, agencies must part of disruptive movements and integrate innovation into their corporate culture.
  • Transparency and Safety – Small agencies can use this as a distinct opportunity: Full transparency can set them apart from the big players. The GAFA dominate the marketing sphere but fall short in their integrity and accountability of online data practices.
  • Trust – Trust encompasses a broad variety of concerns, from data privacy and security protection to ad fraud prevention. Agencies that master this multi-level equation will thrive and form sustainable businesses.
  • Speed – From Digital out-of-home over addressable TV to programmatic audio: the new solutions in the programmatic landscape are manifold. The advertising world does not stop spinning and the agency’s reactions need to be immediate.
Media Agency of the Future

Where To Go From Here?

Things take time. As much as the death of media buying is approaching, this is not something we can expect to happen immediately. Still, focussing on transparent remunerations, having the ability to keep the best talent and knowing where to put a focus is already the deciding factor that makes agencies more successful than others nowadays.

Clients should evaluate closely what agencies can deliver for them to have the maximum impact for mutual happiness and ease of mind. There is a lot of untapped potentials to draw from.

At adverserve, we constantly re-invent. Not only our clients but also ourselves. If you want to find out more about the programmatic shift and how you can bring programmatic capabilities in-house to unlock the ability to buy media more effectively, please get in touch with us.

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