Omnicom Media Group team – Lee Smith (CEO, Platforms – APAC, Omnicom Media Group) and Jonathan Mackenzie (Director, Platform Strategy, OMD International) – make a valid point when they say that ‘change’ in the industry has to come from all stakeholders (marketers, creative agencies, media agencies, design, digital and so on) working from the same side rather than wearing different team colours that can limit what can otherwise be a ground-breaking thought process.
The team takes the thought a level up to say that collaboration should get a score from marketers/clients when they measure an agency’s performance. This would encourage the contribution of an idea, even if the execution was done by another agency on the client’s roster.
On the face of it, the argument holds water because if the filter of ‘my idea versus your idea’ was to be removed, the phrase ‘an idea can come from anywhere’ would truly mean something for marketers. And perhaps it would mean something for the evolution of the agency business itself. But here is another question: is that a real solution for some allegations against the agency business model, that some believe is still stuck in the same place that it was at two decades ago.
The backgroundLee Smith, Omnicom Media Group
Media agency models from the 90s to early 2000s were around the commission based remuneration system. Over a period of time, procurement was added to the equation in a bid to get more value out of what marketers were spending. Many client-agency relationships moved to fee based structures as well and amongst the many different discussions that have been attempted, performance-based business models too have emerged but the practice, due to the complexity of the model, is very limited at present.
As the media agency business evolved, so did the audience measurement sector that moved from the ‘intuitive model’ of pre-1930s to an early rationalised model up to the 1970s, where measurement was largely about market size. The period post 70s brought granularity to the data, creating new insights into understanding a consumer’s behaviour.
With the growth of technology, data is now available from all kinds of online and offline streams creating an information reservoir which when observed, leads to never seen before insights into a consumer’s life. The question is how is the industry using this data and learning more about audience shifting. “With access to all this, how do we move forward as an industry,” asked Mackenzie.
For Smith, the change in the manner in which consumers are responding today, that includes avoiding ad messages at every stage and hence making it difficult to segment services or products, changes the rules of the game. “As audiences absorb messages across different platforms and the utilities enhance further in social space, how do we make sure we are creating something that utilises the screens together,” added Smith.
The ChallengeJonathan Mackenzie, OMD
Digital natives are defining the future impacting all aspects of the media landscape. With this, the channels to connect with audiences and the messaging that it accompanies become crucial with an added layer of the advertising monies spent in creating these.
Agencies and marketers need to revisit many facets of their business to gear up for the immediate future. Many have taken note of the task at hand and address it. As Sir Martin Sorrell of WPP puts it, one of the biggest challenges ahead is horizontality – how does a company look at all that it has access to, and get it all to work in the same direction, at the same time.
“The challenge is not only how we get different skills from different people of different parts of the business to come and create something together but also stay relevant in a consumer’s world while doing so,” summed up Mackenzie.
One clear move seen is the investment that marketers and agencies are making in technology and in talent that can write algorithms than just understand the nuances of marketing. “This means a big change in how we are going to market with our clients’ investments. But we must not forget that there are others who would have access to this core skill set and hence to data, which is leaking out in the ecosystem right now,” explained Smith.
For instance, when Accenture bought over a data company, the clear message was that no one owns this territory. The rise of programmatic buying, where 60 per cent of display ads are coming through some kind of biddable trading mechanism is another indication of the changes in the ways of reaching out to consumers.
Collaboration in a converged world
The challenges and the changes seen lead to one obvious solution – collaboration. As procurement makes advertising and marketing a number-driven game and hence become a barrier according to some, or fragmentation leads to new trustworthy sources for consumers which may not be the advertiser’s messages, a new organisational structure needs to emerge that can combat any such contingencies.
Companies are experimenting with breaking down silos and making different functions work together. And the Omnicom Media Group team also believes that individual strengths combined will be the solution to get the best possible results. Giving a single brief to agencies and putting a score to collaboration are some of the suggestions that can lead the change, according to Smith and Mackenzie but is that enough when the scenario itself demands a reinvention of business models.
The Omnicom Media Group team believes that some changes are already happening on that front and steps such as these are a good start to evolve the model further. Conventional wisdom however would indicate that there is still some time before agencies can truly look to shed their ‘team colours’ and work as one unit for the client because agency revenue models still demand some answers, which are unlikely to come from a collaborative approach.