It is an interesting word. For most mere mortals it is usually associated with action and effect; “thanks to his agency the job was done and everyone was relieved”. We marketers, however, have long thought about agency as a very particular, organisational noun. It is the company that acts on behalf of clients to get the advertising job done; “the agency was amazing”.
In our world, there are clients and customers and, in between, agencies that work to allow the former to communicate effectively with the latter. Initially, those agencies were a one-stop shop, or “full service” as it eventually became known. They allowed any client the chance to conceive, create and then execute an advertisement.
Gradually with the globalisation of both agencies and clients, the traditional full service agencies became part of global advertising holding companies and those companies began to spin off their media agencies into separate entities. These media agencies were tasked not with the content of the advertising, that was left to their increasingly marginalised brothers and sisters in the ‘creative’ agencies, but rather with planning and buying media. From the 1980s onwards the power, and much of the money, was not in making an ad but making it appear in the relevant media where consumers would encounter it.
But in the last two years it has become increasingly apparent that these gigantically successful businesses have been asleep at the wheel. While they have wheeled and dealed their way through the last decade, the context of media buying has changed forever. Unless you have spent the last 24 months under a rock you will be aware of two distinct, but very much connected, elements of the modern media and marketing malaise.
First there is transparency – the idea that a client’s media money is not being spent in a manner they are fully cognizant of and, in extreme cases, in a manner which is not in their best interests either. It would be unfair to paint the transparency issue as being clients getting fucked over by agencies – not because that is not happening – but because it’s so murky and complex out there in media land no client knows whether they are getting fucked or not. They think they might be. But they cannot be sure.
Second, there is the uniquely worrying risk of brand safety. Once upon a time we bought advertising against media options. Today, we buy against a target client and the hundreds of thousands of pages, publishers and platforms where they spend their time. That consumer centrality is problematic because as we follow them to a diaspora of different digital places there is very real chance that our advertising and our brands appear against, and indirectly fund, a rogue gallery of risky and illegal entities that run the gamut of terrorism, homophobia, fascism and paedophilia. Marketers are worried about it and traditional media mastheads have become expert at making marketers even more worried about it.
In the last two years it has become increasingly apparent that media agencies have been asleep at the wheel.
The connective tissue here is programmatic buying. With the number of digital sites increasing exponentially there is no way to avoid buying media this way. But the current methods with their multiplicities of exchanges and murky systems mean client mistrust is an unavoidable by-product. Big advertisers have to buy programmatically, but they are also forced to expose themselves to transparency and safety issues as a result.
At this point you might imagine that media agencies would step in. After all, it’s an industry that employs some of the biggest thinkers in marketing, one that is worth billions, and one that is cut-throat competitive for client accounts. Surely with both brand safety and transparency issues top of the list for most marketers, the media agencies would have fought to stand out and protect their clients best interests while demonstrating their superior level of service?
But none of that happened. The big media agencies sat in big chairs on big stages at big conferences and made a big deal about transparency. But, as the eminently critical expert Bob Hoffman has noted, they talked about transparency but did little to lift the gloom. They made big statements about the need for transparency but the glass stayed opaque. Quasi-transparency replaced media transparency. We still fucked the client over, but we went to conferences and talked earnestly about how the fucking had to stop.
It was the same story with brand safety. This was a perfect opportunity to demonstrate both senses of the word “agency” and help clients avoid and prosecute brand safety issues. Inexplicably the big media agencies remained silent. They were no more than spectators as the big clients and the big platforms and traditional news media tangled over the topic. They had nothing to say despite this being the biggest, newest and most important media topic of the year.
Now these agencies will reap the commercial outcome of this inaction and uncertainty. These most un-agency like agencies are now sensing a very big change. The threat comes not from the other media agencies – each is as inactive and out of touch as the others. Like a field of big brontosaurus watching the meteor strike Earth 1,000 miles away; they see it, they know what it means, and yet they are powerless to act.
The threat comes from the clients these agencies once served. Last week a new study from the Association of National Advertisers (ANA) in the US noted that 35% of marketers in their survey took more of their programmatic media buying in-house in 2017. That’s more than double the number from the ANA’s same survey a year earlier. And this was a big sample (149) of marketers working at big clients (more than half operate with more than $100m media budgets).
Adobe has observed a similar trend in Europe with 38% of marketers confessing that they will take some of their programmatic buying in house in the next five years and an amazing 62% stating that eventually they plan to take all their programmatic buying in-house.
What this signals is a sea change in the world of media over the next decade. The big clients, the 20% of advertisers who pay for 70% of the world’s advertising, will use their scale and size to bring their buying in-house.
Infectious Media found a similar story from the 200 global marketers it interviewed across America and Europe, the Middle East and Africa and Asia Pacific this year. 86% of marketers said they planned to take some portions of programmatic in-house. A total of 68% of the marketers cited programmatic’s lack of transparency, 65% said control was a concern and 71% believe they have more qualified employees to handle programmatic.
“Without a doubt, more marketers are taking programmatic in-house so they have full transparency,” Bill Duggan, the ANA’s executive vice president, told Adweek last week. “There’s hidden costs, reports that only 25% goes to the publisher… And marketers don’t always know where their ads are running.”
What this signals is a sea change in the world of media over the next decade. The big clients, the 20% of advertisers who pay for 70% of the world’s advertising, will use their scale and size to bring their buying in-house. They will do that to ensure brand safety. They will do that to avoid a legion of unnecessary costs and markups. They will do it so they can turn the lights on in a room that accounts for most of their marketing spend. They will do it because their partners at Accenture, PwC and KPMG are all lending their agency to help them do it.
Despite what you might think, markets are eventually efficient. If you do not give them what they want or, worse, you rip them off with murky transactions and a lack of responsiveness – ultimately you pay the price in a capitalist system. Clients are voting with their feet, and the footsteps are turning 180 and heading back inside.