Delusions of adequacy: the media kids aren't OK
A new report suggests CMOs don't believe media agencies are capable of dealing with all of the things that really worry them. Is it time for a headmasterly reprimand, asks Dominic Mills.
It's the time of year when nervous parents await exam results and school reports.
The same process is going on currently in the media world: the holding companies are the parents and the results of the mega pitches - Coke, P&G, L'Oreal, VW, Sony, Johnson and Johnson upcoming etc - are the equivalent of the school report.
We can roughly predict what will happen. Last week, Coke US fired Starcom and hired UM/Ogilvy. Somewhere along the line, another client will fire, let's say, Mindshare, and hire Zenith; a third one will fire Zenith and hire PHD; yet another will fire PHD and hire Starcom; and someone else will fire UM and hire Starcom.
You get the picture: it's a giant merry-go-round, and while one agency may end up down a few hundred million in billings, and another up, the results will convince the holding company parents that the kids are sort of alright.
Or, as one headmaster put it in my school report: "Your son is suffering delusions of adequacy. As long as he focuses on the small picture, his future will be small."
The IPA report published last month into agency/client relationships was a taster from the form master.
The latest, from marketing and media analytics specialist Ebiquity, is a survey via the CMO Council of 224 CMOs, mostly from the US but also Europe and Asia, is more like that of the headmaster. You can read a summary or download a full copy here.
And the headmaster is worried about the future of the media agency kids. The main problem is that the CMOs don't believe they are capable of dealing with all of the things that really worry them, namely (and in top five order):
1. Managing the explosion of customer data
2. Analysing and using this data to automate or personalise marketing communications
3. Exploiting new channel and device choices
4. Overcoming financial constraints and demonstrating ROI
5. Generating content marketing
Now, the media agencies will protest that they have always done #3 and 4, are up to speed on #2, and are dealing with #1 and 5.
Indeed, Ebiquity asked the CMOs about their confidence in their media agencies, and the scorecard was ok(ish): 40 per cent said they were 'as confident' in their media agency's performance as a year before, while only 5 per cent were 'much less confident', and 14 per cent 'somewhat less confident'.
So what's the problem?
Well, it's that delusions of adequacy thing, and while the media agencies are a) telling themselves they can do (or shortly will) all this stuff b) fighting procurement-led pitch fires and c) er, 'managing' the transparency/trust tensions inherent in their business models, they're missing the bigger picture.
This, as the survey makes clear, is in issues #1 and 2, that is to say managing, analysing and exploiting data.
Here, CMOs are turning away from media agencies towards what we might call 'performance partners' or 'solution providers': 70 per cent of all CMOs say they will recruit an 'external partner' to do this, and 82 per cent of CMOs in Europe.
Who then are these external entities, who go under the bland label of 'performance partner' or 'solutions provider'?
Well, they're the Deloittes, Accentures, Adobes, Oracles and (possibly) Sapients of this world; they're not some black ops unit hidden away in the holding company portfolios.
The Ebiquity survey quotes one CMO: "Our...agencies are still there...but the focus is on marketing's business performance, and that just takes a different type of beast to take into battle with you."
In the minds of the CMOs, these 'beasts' have successfully seen the bigger picture and moved away from their more traditional tech and automation platform backgrounds.
They're also beasts with intellectual heft. Asked how he assessed potential new partners, one CMO said: "I look for...their intellectual capital and the people they bring to the conversation. I look at the talent they are adding to my business and the thinking they bring to drive my business."
That, for media agencies, constitutes a stern, headmasterly reprimand because while there is some phenomenal intellectual and business-savvy heft inside media agencies, it is very thinly spread: this is inevitable when you have a business model predicated on thin margins, and a steep pyramid structure in which a few senior people at the top are supported by a huge number of lowly-paid, junior staff underneath.
You could say, of course, that Ebiquity has an interest in stirring things up, but these are very real and current concerns, as demonstrated by the huge number of mega media pitches. Clients simply don't open themselves up to the disruption these cause unless they have big underlying issues.
I don't believe that, as far as media agencies are concerned, the game is lost. Far from it: media agencies have as many strengths and virtues as the 'performance partners' and 'solution providers' have weaknesses (pushing their own proprietary platforms, cookie-cutter solutions box, lack of inherent creativity, no natural understanding of consumers, undiversified talent base, etc).
But to succeed, they need to regain that element of trust that the new kids seems to have appropriated.
Indeed, that is pretty much how 'headmaster' Nick Manning, Ebiquity's chief strategy officer and a former media agency CEO himself (OMD UK, for those who don't know), sees it: "This is what the CMOs want, and it's what the media agency networks should provide...if they can."
If you're interested, you can read the reaction of a US agency intermediary Avi Dan here, and the inimitable Bob Hoffman's secondary take on it here under the headline 'Agency Business Committing Suicide'.
Note: The CMOs surveyed were from businesses including Samsung, Virgin Atlantic, Target, Volvo, Pfizer, AB InBev, Ikea, Mondelez, Ralph Lauren and T-Mobile.