Toby Elkin wrote an article on June 15, with quotes from three industry players, exploring if anything has changed in the marketing world since the release of the ANA Media Transparency Report about one year ago.
The three quoted industry players (John Donahue from Sonobi, Jason Beckerman from Unified and Henrik Busch from Blackwood Seven) all represent ad tech firms, and all three firms operate independent from one of the big four global agency networks. Their reactions can be read here https://www.mediapost.com/publications/article/302849/has-anything-changed-a-year-after-anas-report-on.html and can be summarized as: “not too much has changed, marketers should do more to retake control of their ad dollars in digital LaLaLand”.
And while I do not disagree that marketers probably could do more, I do not agree with the tone of this and other industry reactions on the one year anniversary that not much has changed. From working direct with some of the largest advertisers in the world I can tell you that a LOT has changed.
- Digital Marketing is no longer the perceived silver bullet. The dismantling of the wisdom of digital advertising as the only smart thing to do as a marketer had been underway for a while, and the ANA report kind of pushed it further faster. On top of that, the ANA report coincided with Facebook and Google being confronted with poor measurement results, poor advertiser placement content protections, Fake news challenges, ad blocking and other “misdemeanors”.
At the same time, both the ANA and the World Federation of Advertisers showcased how much the middle men, in many cases owned and operated by the big agency holding companies, where making/withholding from the marketers’ ad dollars.
All of this has not lead to a decrease in digital ad dollars, but is causing a major shift in both where and how these dollars are placed. Marketers have become much smarter very fast, and now take much tighter control over what goes where and for how much. And more manage most of the process in house.
- There is a new sheriff in town: contractual terms and conditions. Almost all marketers we work with or speak to have already, or are in the process of updating and changing their agency contracts. And sure, media is a very large part of this as it typically represents the largest envelop of marketing. But do not underestimate the impact of production decoupling and off-shoring, and creative agency account consolidations (remember, production is under scrutiny as well, by the DOJ!). Some of these efforts are addressed in a pitch but many more are managed through not-visible-to-the-public meeting room negotiations between the incumbent agency and marketers. The new contracts significantly touch the most profitable parts of agency holding companies.
- Agency Holding Companies are feeling the financial pain. Sir Martin Sorrell was quoted in Campaign this week as saying that the industry is facing its biggest upheaval since media split from the full service ad agencies. One WPP response has been to merge Maxus and MEC, two of their media agency brands, to be more productive (read: save money). None of the four global agency holding companies reported any significant growth over the first quarter of 2017. And this while advertising budgets, mainly driven by digital, remain robust and are growing. So there is more money sloshing around, but the agency holding companies are making less. Not much impact from the ANA report you say?
Flock has been “in the thick” of the debate, and we have been especially active with our clients on re-designing and re-structuring their agency contracts and agreements. If you have not yet taken action, we would be happy to get you started. It is too important an issue to ignore.
[Maarten is a featured contributor to MediaPost, this article was originally published here]