The Year of the Media Agency

Comments Off on The Year of the Media Agency

Wordpress_A_Eifler_V1

The first part of Q1 – aka “Ad Tech Prediction Season” – is one of my favorite times of the year.  For these few weeks, our industry comes together to share thoughts on the new technologies, trends, and three letter acronyms that will define the year to come.  Companies are funded, partnerships announced, and everyone fills the blank, officially declaring this the year of ___________ .

Consolidation!…  Cross device attribution!… Video!… Mobile!… Programmatic TV!

However, amidst these more exotic predictions, I feel that sometimes our industry overlooks some of the less sexy topics.  So allow me to take a subversive stance: I believe that 2015 will be the year of the media agency.

I’ll explain.

Amid all of the noise about ad tech companies selling direct to marketers and marketers taking programmatic ad buying in house, I’ve seen two subtle, but important, changes start to happen in the media agency.

1) Traffickers are Becoming Traders

When I worked in the media agency world (in the 2000’s), the job of the ad trafficker was pure execution.  The media planning team would make a very detailed (and very complicated) excel spreadsheet called a “traffic sheet” and hand it to the traffickers.  The traffic sheet told the traffickers exactly where to place each ad, each size, each pixel, click through, and the cost of each media placement.  The job of the trafficker was to take those instructions, push the necessary buttons in an online trafficking interface (typically DFA or Atlas), and email tags to the publishers on the media plan.

Today, the role of the trafficker has started to change.  Rather than carrying out orders, they’re starting to select the media themselves.  Instead of using a first party ad server, they’re starting to use more intelligent ad buying technology.  The shift has begun: traffickers are becoming ad traders.

In this transformation, they are taking on a much more valuable role in the advertising ecosystem.  Rather than simply carrying out orders, they are responsible for monitoring analytics, optimizing ad placements, adjusting bids, and for maximizing the return on investment for their advertisers.  In 2015, I think we’ll see a lot more focus on these traders and increasing visibility of the difference a good trader can make.  The last few years have been filled with hype about “automatic optimization” and “machine learning” – but next year we’ll realize that the best performance can only be achieved through the union of advanced technology and a highly skilled trader.

2) A Focus on Media Investment

Media agencies are really good at buying most media channels.  For instance, I can’t think of a single marketer who has taken television buying in house.  Agencies are just too good at it.  If a marketer were to take TV buying in house, they’d simply be wasting money, compared to what they would be able to accomplish through working with an agency.  So why is there so much hype about marketers taking programmatic in house?  I think the answer is simple:

In programmatic advertising, media agencies haven’t yet been able to create value from heft.

Let me say it a different way: the way I see it, agencies today manage more than 90% of digital spend, which gives them incredible heft and influence in the market.  But due to the complexity of digital media, they haven’t yet figured out a sustainable way to turn their heft into differentiated value for their clients. In 2015, that will change.

Partially due to the pressure from direct-to-client competition, agencies will start to embrace a new product category called “Media Investment Platforms.” Media Investment Platforms will allow agencies to aggregate their digital heft and negotiate preferred deals with publishers.  Using a Media Investment Platform, agencies will be able to negotiate preferential pricing on media, and private access to publisher inventory and data.  Those large, high level agreements with publishers will allow agencies to create a media ecosystem whereby they are able to outperform any buyer going out into the open market alone, without the benefit of agency preferred deals.  Ironically, I believe this will also be a positive step for publishers who will be able to do fewer, larger deals with agency holdco entities, and avoid the high cost of sale that currently plagues the highly fragmented programmatic landscape.

So – what is my prediction for 2015?

In short: advertisers will continue to buy media, publishers will continue to sell media, and agencies will still be the best way to connect the two.

Filed under 15for2015 and tagged , .

Comments Off on The Year of the Media Agency

Comments are closed.