A little over 20 years ago, I picked up an industry trade publication for the very first time.
Its pages were filled with headlines on integration ("full service"); advertising accountability; agency as partner vs. vendor; agency consolidation (the advantages of big vs. small); and, of course, client turnover.
I received an email alert from the very same industry trade just this week and found myself in some sort of time warp, scanning headlines about the very same issues.
How could this be possible? Was I reading a "throwback" issue? Will our industry confront the exact same challenges in 2015 as we did in 1995? Have we solved nothing in 20 years?
The answer is yes and no. While many of the headlines sound the same, the details (along with the specific challenges and potential solutions) have evolved significantly.
Here’s what things look like in 2015 and what it means for media agencies:
Integration (full service). By 1995, marketers had gotten used to having their creative and media agencies under separate roofs, with creative shops most often taking the lead. Since then, the two players have become more equal partners … sometimes voluntarily, sometimes begrudgingly. The rise of market fragmentation, digital and social media, over the top content, the branded newsroom, big data and more have produced an extreme need for sophistication and a deep understanding of how individuals behave across the spectrum of channels. This is where media agencies shine.
In 2015, clients will look to consolidate more responsibilities with fewer agencies, and we expect media agencies to take an increasingly central role.
Advertising accountability. Twenty years ago, "accountability" was a term most often used in the context of direct marketing. Today, if you’re a communications agency of any sort and you’re not delivering measurable results, don’t bother. In 2015, more and more clients will turn to advanced analytics like media-mix modeling to guide their decisions: holistic modeling that can incorporate efforts such as PR, social and sponsorships. Media agencies will continue to offer and grow such in-house measurement capabilities as a part of their core offerings.
Agency: Partner or vendor? While nearly all agencies yearn for strategic partnerships with their clients, what this means has always been vague and therefore difficult to achieve. In 2015, such a partnership will be defined as one that helps clients achieve profitable growth. Media agencies will use their analytical capabilities to change the conversation from brand vs. sales communications to a more comprehensive view that delivers the right mix to sell more products and services, and they won’t shirk from being accountable for those sales.
Agency consolidation (big vs. small). Small agencies are nimble but have limited resources. Big agencies are slow but have everything a client might need. The holding-company model is doomed. The holding company
is alive and well. In the end, who cares?
In 2015, the increasingly important currency will be ideas: ideas that will come from all kinds of places, with the best ones attracting clients and investors. The exception to this rule is media agencies, where the importance of infrastructure, publisher relationships and technical expertise
is immutable; the ability to understand the market, access first-mover opportunities, accumulate and evaluate data, and apply leverage to make data are all affected by scale.
In other words – when it comes to media – bigger is better. With that said, to be credible in the central role to which I referred earlier, smart media agencies will join the ranks of those differentiating themselves by the quality of their ideas, rather than just buying efficiency.
Account reviews. Agencies win business and agencies lose business; particularly in times of economic uncertainty, this is an issue that’s not going away. Two positive signs, however, include the fact that CMO tenure has stabilized a bit, and there is a growing realization that organizational disruption can drag down sales performance. 2015 will see an increase in the use of agency-evaluation and relationship-enhancement tools that reward partnership behavior and discourage churn. (Okay, I admit this one may be wishful thinking, but MediaCom has been using these methods with very positive results.)
So there you have it. It may seem like the more things change, the more they stay the same, but headlines can be misleading. Focus on what lies beneath; that’s where you’ll find the new year’s biggest challenges and opportunities.
Best of luck in 2015!
Adam Komack is chief client officer of MediaCom USA.