With the advent of digital advertising channels does the media buying agency model continue to serve the requirements of advertisers well? Jasmine Butler-Burnham shares her summary of the recent Forum event.
John Broughton of Confused.com argues that there is no reason that many businesses cannot bring this function in-house, allowing them to cut cost, capture data and more effectively measure investment in advertising against company objectives.
Luke Bozeat, COO of Mediacom UK disagrees and believes that companies cannot disregard the scale and power of the agency in keeping a view on the entire market and driving prices in favor of their clients.
Rachel Aldighieri, Managing Director of the DMA, is concerned that programmatic may be pushing the customer from their seat at the table. Rachel argues that companies should remember that advances in programmatic advertising and the opportunities it offers shouldn’t come at the expense of the overall creative and brand story.
In recent years, media buying and planning in the financial services industry has changed immeasurably. Significant innovation and advancement in the way that ads are served to customers – programmatic buying and pay-per click (PPC) as the primary case in point – have seen advertisers embrace new technologies, data measurement expectations revised and audiences targeted in ways not previously imaginable.
As to be expected with any shift in dynamic, the relationship between advertiser and agency has also evolved, and not without its own tensions. Many advertisers now find themselves leaning on their agencies for tech-stack driven advertising solutions as well as access to traditional media channels. The advent of programmatic, real-time bidding (RTB) and digital channels have undoubtedly changed the economy of the game.
We were keen to explore this in more detail and invited three experienced panelists with different views to join our debate, entitled ‘Are You Being Digitally Served?’. The event was kindly hosted by Aberdeen Asset Management on 24 January 2017.
Providing the client-side perspective was John Broughton, Head of Performance Marketing at Confused.com. Alongside a dedicated team, John has successfully brought the media buying and planning function of the business ‘in-house’ and believes that whilst there remain opportunities for agencies and advertisers to partner, it is not beyond the capacity of many companies to embrace tech solutions and build a media buying capability internally.
To give a view from the agency, we welcomed Luke Bozeat, Chief Operating Officer at MediaCom UK. With responsibility for a business that provides buying and planning solutions to multi-national brands across vastly differing categories, Luke is evangelical about the role of the agency. He believes that agencies not only continue to drive prices in favor of the client but are big enough to keep a view of the entire market. Their ability to give holistic advice to brands, on how to achieve growth through ad-spend in a new digital world, cannot be replicated.
Finally, to provide the voice of the customer, we welcomed Rachel Aldighieri, Managing Director of the DMA to the panel. In her eight year tenure, Rachel has transformed the DMA from a trade association to a vibrant community of like-minded marketers, striving for continuous improvement and embracing innovation in direct marketing. Rachel believes that businesses must champion the customer in order to drive true success and is fervent that digital innovations in advertising must not change this.
John began the discussion by offering two interpretations on the exam question, ‘Are you Being Digitally Served?’. Firstly, are advertisers getting what they need from digital? Can they prove that their digital media strategies fit business objectives and align themselves with KPIs? Secondly – to be slightly provocative – are businesses being served rubbish by the industry at large? John believes that whilst agencies are by no means insincere, we cannot deny that digital disintermediation has driven a wedge between the advertiser and the agency. Programmatic has created a new structural reality and for many media businesses, an existential threat.
As John highlighted, agencies were traditionally the mediator of the space between the media owner and the client, a precedence that was beneficial to all parties. Strong relationships between agency and media owner ensured that the client received the best possible prices and service without spending unnecessary energy and resources seeking quotes themselves. However, fast-forward to 2017 and tech solutions are now positioned in the role of ‘mediator’, with cost and price options provided in real-time via PPC and RTB. Yet despite this, many advertisers continue to rely on their agencies for buying and planning support.
John noted that should advertisers wish to challenge the status quo, they are commonly told by agencies that media buying is still too difficult, too time consuming, too expensive and with the advent of technology solutions, now also too specialised to be carried out in-house. Advertisers are told that new gates have brought new gate-keepers and that the cost of entry to negotiate terms with the likes of Google and Facebook is substantial, as is the training and employment of staff to carry out the job.
However, whilst it can’t be denied that platforms such as Facebook and Google present new financial barriers, the supply and demand price economies of PPC and RTB auctions cannot be ignored. With digital solutions, there is now little need to negotiate pricing with sales representatives, surely negating the need for a middle-man?
We cannot deny that for traditional media, agency remains king for most advertisers. And for many businesses, the agency model is still best placed to handle planning and buying requirements. But as many budgets continue to shrink, John has a rallying call-to-action for advertisers wishing to take control of their own media buying. With the right people, technology and investment, the team at Confused.com have demonstrated that building a digital buying team in-house is a very achievable venture. John believes that doing so has allowed Confused.com to more effectively measure investment in advertising against company objectives as well as collect data to help better understand the purchase behaviour.
In contrast, Luke believes that tech has not and will not eat the agency lunch. For media buyers, programmatic is not ‘unwanted disruptor’ bu dream solution, allowing agencies to optimise media planning and target potential customers at the right place, at the right time with the right message. Additionally, programmatic allows agencies to demonstrate real rather than claimed behaviour, allowing companies to effectively influence and change purchase behavior in a way that was not previously possible.
Luke noted that advertisers with exceptional knowledge and understanding of ad-tech solutions are by far the best businesses to work with, and it is these clients that are in turn most well placed to drive significant return from their digital ad-spend. Further to this, he believes that when setting out to buy and plan a digital media strategy, the experience, scale and knowledge of the agency cannot and should not be discounted by the advertiser. Not only does the agency possess the knowledge, scale and investment in technology required for client success, but every decision made is focused on driving sales and profit for their clients. Mediacom ties its own internal incentives to client outcomes creating a mutually invested relationship between agency and advertiser and ensuring that advertisers achieve constant growth, therefore fostering a long-term working partnership.
Luke believes that the agency model itself is specifically set up to help the advertisers it serves to achieve growth in ways that they would not be able to achieve should the function be brought in-house. Media agencies bring years of experience and expertise to the table – and coupled with a continuous investment in technology, in turn allowing them to offer cutting-edge solutions, they remain best placed to help advertisers maximise returns on ad spend.
Drawing upon some of his experiences, Luke noted that agencies are able to work most effectively with advertisers who can ensure everyone in the organisation from the board down, are on the same page and focused on the same advertising outcomes. KPIs must be laddered and integrated across different departments and whilst agencies are happy to make recommendations on this process, it is always easier to work with companies who have already put these metrics in place.
Luke concluded by emphasising a key point not to be forgotten by companies considering bringing media buying in-house. By utilising external partners, advertisers are able to remain flexible with who they work with. Such a luxury may not be possible should a company become tied to an internal team.
Rachel was quick to remind the audience that the most important stakeholder in this equation, and in fact, in any business equation, remains the customer. The biggest threat to programmatic is how the brand is being perceived by the customer during targeting and re-targeting advertising activities. We have all heard negative stories from customers who have felt ‘followed’ around the web by brands who are utilising programmatic buying, which in turn raises the question of what kind of brand story is being told to consumer audiences during these operations.
Rachel is concerned that with the rush to adopt new technologies, marketers are forgetting the importance of creativity and a slick, engaging customer journey highlighted by advertising communications that are relevant and interesting to the consumer. For Rachel, it is about transparency – between the advertiser, the agency and the customer – and striving to find the point in which everyone’s value comes into the equation. Advertising is not only essential to driving sales and profit margins but to brand building too. We can’t deliver brand goals against advertising marketing metrics and nor should we try to either. Clarity of purpose is crucial, as is keeping the customer in the conversation at all times.
As the event drew to a close, audience members were offered the opportunity to contribute their own thoughts on the debate as well as challenge and ask questions of the panelists. It was fantastic to have three speakers who were willing to share opposing views, allowing Financial Services Forum Members to gain awareness of a challenging debate. We are keen to get additional thoughts from our community and would invite you to leave your comments on the discussion below.
We look forward to continuing the debate. Thank you to John, Luke and Rachel for sharing their thoughts.
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