Albert Einstein once said "Life is like riding a bicycle. To keep your balance, you must keep moving." It's clear that media agencies are at a crossroads, so for those of us in the industry, as we begin 2017, it's great time to reassess our role so we can continue to, as Einstein advised, move forward.
Complicating matters further, there is a heightened state of distrust threatening the relationship between agency and client, and many are questioning the role that agencies play. So, what is the purpose of the media agency in a post-digital world?
There seems to be three prevailing schools of thought:
Nothing will change (aka "Please, God, let nothing change")
This feels like trying to stop the tide from coming in at the beach. And as enticing as it might feel, the reality is that the world has evolved and isn't going back anytime soon. The business model of the old media agency was built on buying and trading media and that's what has glued the system together. Many are fighting hard to keep that cemented in place, and the current malaise is being exacerbated by the need for agencies to make money through their trading functions.
But, clients are wising up to the "savings guarantees" that agencies have made over the past few years, and as they wake up to bot fraud, arbitrage and agency-owned inventory, clients are no longer settling for the illusion of value. The model isn't dead, but the patient is extremely sick.
Clients will take all of their media buying back in-house
We have certainly seen some of this happening, especially with digital media, and particularly with programmatic. But, I think this has less to do with perceived impropriety and more to do with data management.
Clients are quite rightly seeing data as a competitive advantage and one that potentially needs to be kept entirely in-house. That said, as with most technology, the challenge for clients is to keep what they've built up-to-date. And while a couple of years ago having direct deals with Google and Facebook seemed like a good idea, there is considerable reassessment of whether this is the right approach today. An analogous situation exists with how clients manage pensions and investments.
The media marketplace is looking increasingly like Wall Street in its execution, and I predict that trend will continue. In the long term, clients will want to build and maintain the skill sets required to be competitive, while data ownership is manageable via contract.
The creative and media worlds will remarry
Maybe, but not in the way that many of the advertising agencies think or hope that might happen. Media decoupled from the creative function more than a generation ago, and I think it's unlikely that the current and coming crops of media leaders are interested in playing second fiddle to creative.
They manage their own business affairs and have built their own client connections, both in procurement and in the marketing department. So today, who really needs whom?
So, what do I think the answer is? I think it's time to redefine what the role of media is for a business. In a post-digital world, the CMO's most important relationship is with the CIO. After all, that's the intersection of understanding the consumer, and, more importantly, grasping marketing's impact on the performance of the business.
The CMO is driven by business performance, and the connection between action and impact is now provable. Media today doesn't simply deliver eyeballs; it also generates huge volumes of data about the consumer, the market and performance.
Media deals in the future are going to be informed by both the price of the audience and the value of the data generated from the buy. Marketing choices are being made from data management platforms, not focus groups, and keeping ahead of technology is what will differentiate success and failure.
Media sits at the heart of decision-making about marketing and driving the overall business, and as a result there has never been a better time to be in the media industry. It just won't look like the model many are hanging on to, and it's time for those on all sides of the equation to get comfortable with the fact that data and media are inseparable.
So organize accordingly and stop looking backwards—the future is furiously hurtling at you head-on.
A former rugby player, Martin Cass, CEO of MDC Media Partners and Assembly (@mediaassembly), still enjoys tackling tough industry issues and new business wins like 21st Century Fox.
This story first appeared in the January 16, 2017 issue of Adweek magazine.
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