What Does This Mean for the Media Agency?

Mobile marketing will go from being a niche media channel to being a high-reach and high-segmentation channel. We know that mobile phone users typically choose ad-funded content in favor of content they have to pay for, which bodes well for advertiser opportunities. Although there will naturally be some crossover between mobile and fixed-line Internet, the different opportunities on mobile, such as geo-targeting, will lead to mobile specialists working within media agencies. At the very least, we will see one or two digital planners/buyers who specialize in mobile planning and buying. At the very most, we will see the launch of independent specialist media agencies that do nothing else except plan and buy mobile marketing campaigns.

Blur 3: Entertainment and Advertising

With the increase in the number of TV stations around the world, we have witnessed a huge surge in the amount of advertising inventory available. This has placed, and will continue to place, growing pressure on the creative industries for quality content. But, with the explosion in the number of channels and the resulting drop in audience figures, many production teams have seen their budgets slashed as TV stations grapple with falling advertising revenues. This is where advertisers have a perfect opportunity to step in and lend a helping hand, both by creating more quality content, through branded content, and driving up program makers' revenues, through product placement. In many markets, regulators are continuing to relax the current rules on product placement, which will only serve to increase this channel's importance.

Online and on interactive TV platforms we have also seen a growth in marketing campaigns which bring brands to life through applications such as games. The early forays into this area have seen an increased level of engagement, resulting in dramatic increases in brand preference scores, albeit for smaller audiences. Internet gaming enables games to reach much larger audiences, but to date the cost has been prohibitive. However, this is set to change with some of the major games producers starting to embrace the ad-funded model. For example, in January 2008 Electronic Arts was able to launch its first free online video game, Battle Heroes, due to ad-funding. The major tipping point for advertising within games is predicted to arrive between late 2009 and early 2010, when a new streaming high-definition gaming site launches called OnLive. OnLive is set to dramatically reorganize the gaming sector by allowing users to play the highest quality games without buying. And because it is live, advertisers will be able to place ads into games by region with as much ease as placing an online banner campaign. We are also expecting to see game designers no longer hard-coding in cars and other products and instead having them as caching opportunities. Thus, Mercedes can insert different models by region, even after the game has been launched. So, by 2014 ad-funded gaming will be commonplace.

Another major growth area is ad-funded apps -- an app being tech-speak for an online application that can be downloaded onto a social networking site. Ad-funded apps have already been created on social networking sites like Facebook and mobile platforms such as the iPhone. We believe it will not be long before we see widgets become brands in their own right. There are signs of this happening now. One example is RadicalBuy, a classified sales site on Facebook where users can buy and sell items from/to their friends, as well as selling their friends' items for commission.

What Does This Mean for the Media Agency?

Creating content will become a much bigger and more important part of a media agency's remit. At present, all of the major networks have content creation departments but, by 2014, these will be sizeable revenue generators. In fact, these departments will grow to become mini quasi-creative agencies, taking on more creative tasks and working alongside or even in competition with creative agencies. Media agencies will offer their clients a channel-led, full-service approach.

They will be staffed by a vast array of specialists, from product placement experts to software developers. The latter will be tasked with creating innovative digital assets and have close relationships with third-party software houses, working with them to create ad-funded applications. Software was heralded as "the new media" at the 2008 Consumer Electronics Show. By 2014 this will no longer be a "new" concept, but rather an accepted part of the media mix. Pioneering media agencies will also be seeking to share in the value created from these new branded products.