Magazine article Marketing

Andrew Walmsley on Digital: Changing the Agency Game

Magazine article Marketing

Andrew Walmsley on Digital: Changing the Agency Game

Article excerpt

The importance of data will upset the balance in the uncomfortable client-agency ecosystem.

For as long as anyone can remember in the world of marketers and agencies, the relationship between client and suit has been murky. Often based on personal relationships, disproportionately influenced by opinion, frequently held together by inertia and lack of understanding, the contract between supplier and commissioner is a fragile one. Despite its fragility, however, the rules of the game are clear.

The agency takes on any work it can, exploiting the need to reduce client head-count by fuelling the 'de-skilling' of marketing departments, thus making itself harder to defenestrate. Media agencies create ever-more complex trading arrangements which generate the backdoor income they need to supplement the uneconomic headline price they are charging.

Procurement departments pretend to be unaware of the value the agency brings, picking holes and driving the headline price down to a level they can showboat to the board, while aware that the agency lives off other revenues. Now and then they'll bring in an 'auditor' who will 'find' overcharging, about which procurement knew already, to show their rigour, before everyone gets back to business as usual.

Marketing folk must navigate these choppy waters, keeping everyone onside and seeking to get closer to the objectives they have set without falling victim to the local storms that brew up as the players strive to maintain their toehold. Changes are afoot, however, which could alter the balance of power. The way marketing departments engage with agencies will need to evolve if clients don't want to be at the mercy of agencies with the keys to their underwear drawer.

Across the industry, people are waking up to the strategic importance of data. Capturing, analysing and employing it to power decision-making is rapidly becoming a critical capability

Some agencies are moving faster than others. They pull together the data behind their media operations and create a centralised resource of performance data across the breadth of their digital activity that enables them to change their business model in several important ways.

It allows them to arbitrage media buying, moving down the value chain to absorb some of the margin enjoyed by networks such as Specific Media; buying low-cost media and using data to allocate individual impressions to the most profitable campaign. It also allows models to be created for the performance of media, search and social for each client's business While lots of attention has gone into covering data ownership in contracts, little has gone into what is to be done with the model, which is where the value lies. …

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