The Next Big Thing in Media & Advertising: Simplification

Media Complexity Destroyed AgencyClient Working RelationshipsIn the rush to be digitally and socially relevant marketers expanded their agency rosters to include expertise across all disciplines amp8212 from TV print and radio to sponsorships events and influencers to display search and email marketing This downgraded each agency39s relevance and shifted the relationship39s center of gravity to clients The result disenfranchised agencies that complete with one another for fees rather than provide needed strategic adviceMedia Complexity Drove up WorkloadsAgencies that never measured their scopes of work in any case accepted workload increases with enthusiasm happy to be doing as much work for their clients as possible Media agencies saw astonishing increases in the number of multimedia campaigns requiring briefing planning approvals buys analyses and ROI report generation Creative agencies saw deliverablespercreative increase from five per year in 2004 to 300 per year in 2019 as Facebook posts and their kissing cousins took over from traditional media briefs Creative agencies were like gourmet French restaurants that became fastfood burger shops Not surprisingly many clients felt that they could flip burgers equally well inhouse so agency workloads are now migrating inhouse away from roster agenciesMedia Complexity Destroyed PricingBecause digital and social innovations did not significantly improve brand performance and agencies have been perceived as adding less value procurement routinely cut agency fees The combination of increased workloads and declining fees has destroyed agency pricing for its work Since 2007 according to data from my consulting practice the price of media agency work has declined by 52 percent for creative agencies the workload price decline is 33 percent in today39s dollarsIn Destroying Pricing Media Complexity Reduced Agency CapabilitiesIronically although agencies geared up and mastered the complexities of media fragmentation they also downsized and juniorized their staffs to adjust to price declines Juniorization is a selfdefeating strategy when more and better strategic thinking is required It is a sign of the times that the capability that agencies hire for today is project management to get workload logistics under control Project managers are more affordable and relevant than strategic thinkers in this highvolume environmentMedia Complexity Commoditized the IndustryThe combination of increased rosters growing workloads declining fees and agency juniorization has commoditized the industry making agencies seem entirely replaceable every time a chief marketing officer changes every three to four years or a client reports poor financial performance to Wall Street Pitches are routine and they contribute to continued declines in agency pricingComplexity Has Destroyed Value for Advertisers and AgenciesThere is too much creative work being done across too many channels brands are not really benefiting There is too much nonessential agencyclient communication associated with briefing planning approvals buys analyses and reporting and too little essential analysis and communication devoted to answering fundamental questionsWhy are our brands underperforming in the marketplaceWhat media mix and spend levels are optimal to improve brand performanceWhat kinds of creative are required to improve performance within this media mix and spend levelHow can we refocus and simplify our agency roster to get proper attention to these questionsSimplification Is the Obvious Strategic ImperativeAgencies and clients need to sit down and develop simplification action plans that lead to value creation improved brand performance and cuts in unnecessary and wasteful activities Senior agency executives need to engage in this dialog armed with data that documents the extreme complexity of today39s agency operations Procurement for its part needs to abandon its feecutting obsession and focus as it should on the elimination of nonvalueadded activities SOW pruning across media channels is an obvious first stepquotOrder and simplification are the first steps towards mastery of a subjectquot wrote German novelist Thomas Mann In this industry simplification needs to be the second step amp8212 the embrace of complexity got there first with too many devastating consequencesPhoto credit Paul Noth The New Yorker The Cartoon Bank With permissionDon39t stop now Stay in the know with critical commentary on the advertising industry from Michael FarmerClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNet

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The Next Big Thing in Media & Advertising: Simplification

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Michael Farmer

"About That with Carl Mayer": Involved Media Connected Audience Fall 2024 Report (Episode 5) - By Carl Mayer

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The Next Big Thing in Media & Advertising: Simplification

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Michael Farmer

"About That with Carl Mayer": Involved Media Connected Audience Fall 2024 Report (Episode 5) - By Carl Mayer

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