Technology is vital for media agencies’ future

As the race for greater accountability gathers pace, those media organisations which have invested in proprietary software and IT that measures effectiveness of sales and profits will lead the field. By John Perriss. John Perriss is chairman o

In recent years, our industry has greatly increased its commitment to researching ad effectiveness at every level. The IPA has played a pioneering role through its Advertising Effectiveness Awards. Recent comment has centred on how a greater element of profitability measurement can be built into the awards.

In media, we’ve long been accustomed to being measured and audited for our results. The assessment of buying by client and agency dates back to my entry into the industry 30 years ago. The emphasis within these performance audits has nearly always revolved around a rather mechanistic view of price versus a market benchmark; and the efficiency of reach and frequency against a defined target audience. These fairly simple criteria have shaped media accountability in our industry for the past 20 years.

The consequences have been predictable. A gradual shift of buying assignments to the top performers, the emergence of off-the-shelf software to evaluate reach and frequency, and the establishment of several competing media auditing companies have been among them.

Inevitably, this pooling and sharing of market data has caused a narrowing of differentials and a gradual consolidation of buying into the better, usually bigger, media agencies. Soon 80 per cent of TV buying will be in the hands of five players.

Zenith has broadened its range of skills and services, as well as expanding geographically, to ensure a competitive product. The investment has primarily been targeted in two areas: quality of people and information technology systems, particularly proprietary software, under the brand name of ZOOM (the Zenith Optimisation Of Media). However, competitors are moving in the same direction, and I believe that the next big battle in our sector will be over software systems, which will not simply improve buying efficiencies, but increase the effectiveness of media strategies.

Indeed, this trend may be so significant that it will allow companies lacking buying volume, but with the deep pockets necessary to develop original software, to compete with the larger volume players. Carat’s purchase last week of Media Marketing Assessment in the US appears to be part of that trend. Carat significantly outguns Zenith in volume in Europe, where it has concentrated on developing ZOOM software, and now Carat has some smart ZOOM software to compete with Zenith’s volume in the US.

Myers Reports, a subsidiary of Jack Myers Inc in the US, recently said: “Between 1996 and 2000, companies… will become increasingly focused on researching the effectiveness of advertising in generating sales results and less focused on researching audience size and media pricing comparisons.” A survey by Myers of 300 executives in major marketing companies in the US found that 81per cent of respondents believed organisations are abandoning price-based media decisions, in favour of sales impact. PC-based modelling systems are playing a key part in this.

A survey by Asia Business News, among agencies and advertisers, found 71 per cent of respondents believed the development of proprietary software was not keeping pace with the Asian media scene.

With increasing demand for accountability, proprietary software and systems which can demonstrate sales and profit effectiveness will be a key ingredient for media agency success in the next few years.

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