Turning the Tables: When Advertisers Show Media Publishers the Path to Success

The Media Financial Management (MFM) Annual Conference recently hosted an important panel titled "Understanding the New Economics of Media Buying and Selling." The session featured Ashwini Karandikar, Executive Vice President of the American Association of Advertising Agencies (4A's) as the moderator; Jack Myers, Media Ecologist and founder of MediaVillage Education Foundation; Sonia David, Vice President for the Business Marketing Practice at the Association of National Advertisers (ANA); and Matt Young, Chief Revenue Officer for Vidmob. The discussion focused on the evolving dynamics between the buy-side (agencies and advertisers) and the sell-side (media content and distribution companies) in the marketing ecosystem.

Shifting Dynamics in Media Buying and Selling

Jack Myers began the session by highlighting the significant shifts in the media landscape. He noted the increasing importance of technology and data in media transactions, pointing out that 65% of media expenditure is now automated or programmatic with 80% forecast to be non-human by 2030. Myers emphasized that the buy-side has become more data-centric, with younger professionals driving changes in agency structures and procurement processes. In contrast, sell-side media organizations have lagged in adapting to these changes, often hindered by legacy systems and traditional approaches.

The Buy-Side Perspective

Sonia David provided insights from the perspective of the ANA, which represents 1,600 companies and 20,000 brands responsible for nearly half a trillion dollars in marketing spend annually. She discussed the collaborative efforts within the industry to address issues such as cookie deprecation, data privacy, and cross-media measurement. David emphasized the importance of brand building in B2B marketing, noting that 95% of potential B2B buyers are not in the market for a product at any given time, which underscores the need for sustained branding efforts.

The Role of Data and Finance in Media Transactions

Matt Young shared his experiences from Vidmob, Vidmob is a creative data platform that helps brands to improve advertising effectiveness with creative data. He highlighted the growing involvement of procurement teams in media transactions and the need for finance teams to engage more deeply with sales processes. Young underscored the importance of merging languages between sales and finance to better articulate the value propositions to clients and procurement teams.

Bridging the Gap Between Finance and Sales

A recurring theme throughout the discussion was the need for media sales teams to speak the language of finance. Myers stressed that financial officers on the sell-side must engage more actively with their counterparts on the buy-side to understand and leverage procurement processes effectively. He pointed out that the industry's investment in training and education for sales and finance professionals is crucial but currently insufficient.

The Future of Media Transactions

The panelists agreed that the future of media transactions will be increasingly data-driven and automated. However, they also emphasized the irreplaceable value of human relationships and expertise in navigating this complex landscape. Myers noted a significant shift back to content-focused presentations at major network Upfronts, indicating a renewed emphasis on brand equity and unique value propositions.

David emphasized the transformative power of branding and long-term advertising commitments in B2B marketing. She explained that B2B buyers typically undergo a lengthy decision-making process, often spanning 12 to 18 months. This extended period presents a prime opportunity for sustained branding efforts, which can significantly influence purchasing decisions. To win this business, she underscored that media companies need to help B2B advertisers connect the dots between their campaigns and tangible business outcomes, leveraging data to show cause-and-effect relationships. This capability not only enhances the perceived value of advertising investments but also fosters stronger, data-backed partnerships between advertisers and media suppliers.

Insights on Industry Transformation

Karandikar, having worked extensively in media technology and data practices. emphasized the necessity for both buy-side and sell-side entities to evolve in tandem with the digital transition. She highlighted her extensive background, which included a stint at McKinsey and leading the programmatic group at dentsu, to underscore her deep understanding of the industry's transformation from linear to automated and streaming services. This perspective enabled her to draw attention to the critical economic shifts and the need for better alignment between how media is bought and sold.

Her key observation was that there is a significant gap in education and understanding between what is being sold and how it is procured and utilized on the buy-side. To bridge this gap, she advocated for a more collaborative approach where sales teams are better educated about financial implications and procurement processes. This, she argued, would not only enhance their selling strategies but also align their efforts more closely with the needs and expectations of the buyers.

Karandikar further elaborated on the critical role of data in today's media landscape. She noted that while data-driven approaches are becoming the norm, there is still a lack of comprehensive understanding among sellers about how to leverage this data effectively. According to Karandikar, the key to overcoming these challenges lies in robust education programs that can demystify the complexities of data and technology for sales teams.

She called for a concerted effort to invest in ongoing education and professional development across the industry. She stressed that understanding the financial nuances and technological advancements is not just beneficial but essential for media sales teams to remain competitive. By equipping them with the knowledge to navigate these new economic realities, the industry can foster more effective and strategic engagements between the buy-side and sell-side, ultimately leading to better outcomes for all stakeholders involved. Karandikar's insights reinforced the overarching theme of the panel: the urgent need for adaptation and collaboration in a rapidly evolving media ecosystem.

Audience Engagement and Questions

The session concluded with an engaging Q&A segment. One audience member highlighted the persistent undervaluation of audio advertising despite compelling data on its reach. The panelists acknowledged this issue, attributing it to challenges in verifying business outcomes and emphasizing the need for better attribution models.

Another question focused on the role of finance teams in optimizing revenue and navigating the complexities of modern media transactions. The panelists reiterated the importance of close collaboration between sales and finance teams and the need for ongoing education and adaptation to new market realities.

Conclusion

The panel at the MFM Annual Conference shed light on the evolving economics of media buying and selling. The insights from industry leaders underscored the critical need for sell-side media organizations to adapt to the data-driven, procurement-focused approaches of the buy-side. By fostering closer collaboration between finance and sales teams and investing in comprehensive training and education, the industry can navigate the challenges of this new landscape and unlock new opportunities for growth and innovation.