The new ‘Mediapalooza’: how and why it’s different this time
In the midst of a flurry of media agency reviews, Nick Manning assesses what's changed across the pitching landscape
Doesn’t time fly? It’s six years since the first ‘Mediapalooza’, when media agency reviews came fast and furiously. We are now seeing another big flurry but this time the causes are different and the nature of such reviews has changed dramatically.
One different and unexpected aspect is that media agencies are being highly selective about which pitches to take part in. It may have been assumed that they would chase every opportunity to restore revenues lost to the pandemic. This isn’t happening.
The pitch intermediaries universally report that they are having to persuade agencies to take part in tenders. The use of the word ‘unprecedented’ is, well, unprecedented but we have never before seen media agencies being so selective, and rightly so.
One welcome result is that pitch lists have reduced in size, so fewer agencies are burning people’s time fruitlessly. They are under great pressure from the competing priorities of existing client needs, headcount reductions and disrupted communications.
Pitching over video-calls is a pretty terrible experience but preparing for a pitch is even worse; you can’t wander over to someone’s desk when they are eight miles away and ideas are harder to share over Zoom. Remote co-ordination is a nightmare.
Those 3am cold pizzas the night before may not be missed, but that’s no real comfort when the teamwork that makes pitches great is so hard to achieve.
Media agency people are having to work harder than ever and ‘Zoom fatigue’ has replaced commuting angst.
Pitches are tougher and require ever more effort for uncertain reward. Understandably, the agencies are turning down any opportunities without a decent chance of success.
More pertinently, the causes of this year’s pitching frenzy are very different to 2016.
Some clients are shifting their business models to be more ‘omnichannel’, there is pent-up demand from the lockdown period, more emphasis on digital as e-commerce grows and a general ‘fear of missing out’ as media consumption changes and the media agency market evolves rapidly. Change is in the air.
However, one of the biggest single drivers of current pitches is the changing face of advertisers’ internal structures and the extent to which they are taking control of media. This comes in many shades of grey.
Having spoken to the leading players in pitch management (AAR, The Aperto Partnership, Ebiquity, Flock and ID Comms), I found there was broad consensus that advertisers are changing their organisational structures and operational processes first and only then looking for external partners to fit around their new shape.
There are also many more flavours of client, ranging from the traditional brand-owners to the newer players, many of whom direct-to-customer, with different needs and purchase journeys.
There are still big international pitches that are ultimately media cost- and fees-led as these are the criteria that can ostensibly be compared on a multi-market basis. This remains a race to the bottom.
However, domestic and more enlightened international advertisers are looking at building a customised portfolio of external partners and are regularly mixing and matching agencies according to specialisation and internal resource. Briefing is becoming more precise.
Most are looking at a range of options for some degree of in-housing, often around data and measurement, sometimes digital activation.
Very few want to get to full ‘hands on keyboards’ and they value the market exposure media agencies bring as well as resources in mass media.
The days of looking to simply replace one media agency with another are over, while media pricing and fees are being down-weighted in scoring criteria in favour of strategy, digital capabilities, analytics and team.
There is a better balance of marketing versus procurement needs, and there is some long overdue change in remuneration and reward procedures, rewarding better thinking.
Advertisers are looking for partners who have capabilities throughout the purchase funnel, and especially in the difficult mid-funnel sections where brand-building and activation media converge and sometimes collide.
Strong digital capabilities are a sine qua non and this has to cover a wide range of channels, with native fluency in all a must. Quite often digital content solutions are featuring more as the gap between content and channel narrows.
With so many channels available, media agencies now have to be the equivalent of decathletes, capable of competing at a high level in all disciplines.
Broadly, the media agencies have achieved a high level of competence, with all capable of outstanding performance on their day. Resources and technical capabilities are obviously of paramount importance but ‘talent’ is cited universally as a discriminator, whatever the agency.
Some things never change; a great team backed by the right tools and resources is still the right answer.
The arms race is for the right people when tools and techniques are broadly comparable.
Clients also want longer-term partnerships, especially as data becomes more integral, agencies get embedded in shared systems and tools and the dove-tailing of agencies around the client structures leads to greater cohesion. This will reduce the number of pitches in the future.
The issue of media transparency does not feature as strongly as may be expected, suggesting that the general issue of lack of trust which had some influence on the 2016 ‘Mediapalooza’ has dimmed compared to more immediate pressures, and possibly because more clients have tackled it in some way.
They recognise that the trust issues are associated with the buying groups and not the frontline media agencies and this should be dealt with at a contractual level.
The ISBA standard template, while not universally applied, has certainly helped improve transparency for some advertisers.
While there has been some progress on this, there is still a way to go. To quote one media consultant, clients want partners who make money for them, not from them. While everyone wants to pay the right rate for expert services and performance, they don’t want to have to police agency revenue-driving schemes that turn up on the plan without explanation or the right evidence.
One area that features regularly is the question of programmatic transparency; this remains a thorny problem that strains client/agency relationships and one that should be resolved.
The current ANA study in the US (where I am acting as an advisor to the ANA in partnership with my colleague Tom Triscari) should build on last year’s ISBA report that raised significant questions about the opacity of data and money flows in the programmatic market.
As spend grows in programmatic and it becomes the de facto trading mechanic for other media, resolution of its many shortcomings is required.
All of these trends are stimulating the market for consultancies who can help advertisers with impartial support across the vast new array of needs, and this is transforming the niche market for pitch management.
The old style approach of lining up a set of agencies, drafting a couple of ‘strategic’ briefs and creating some cost grids is dying out.
The services being offered by the pitch intermediaries are becoming more nuanced, customised and of higher value. While the infamous cost grids are still a common feature, this will decline with the growth of biddable channels given that media pricing comparisons in these is meaningless.
Nowadays the independent media consultants need to be suitably qualified in multiple disciplines. They don’t have to be decathletes but they do need to be coaches, well-versed in the same disciplines as the media agencies in order to help advertisers evaluate offers.
They have to cover the whole range of client questions and have a strong point-of-view on them all. Independence isn’t the same as neutrality.
They have to be experts in digital in all its diverse guises. This has not been a strong suit among pitch management specialists hitherto, but it is increasingly vital given the array of agencies who can address digital briefs, including the new breed of ‘digital-first’ (or only) agencies.
The market is ripe for independent media consultants who can support advertisers continuously (not just at pitch) with a range of advisory services covering all the bases, including the all-important contractual expertise.
Analytics capabilities should include the ability to use statistical techniques that go far beyond the Excel years and tracking platforms that help improve optimisation should replace the outmoded benchmarking tools.
The consultants will include pitch management in multiple disciplines (including, say, adtech) but increasingly the model will be more broadly-based as clients needs change and classic media pitches diminish.
Better pitch management invites the tendering agencies to address tomorrow’s challenges as the media world transforms rapidly. It stretches the pitching companies’ capabilities and brings out the best in them.
It should also help the industry transition its flawed business models by encouraging advertisers to reward brilliant thinking and results while improving behaviour.
The right kind of reward schemes would in time solve the issue of media transparency; they would produce a win-win scenario where media agencies rise to the challenge of transitioning their own business model towards more effective advertising with a reduced focus on media pricing and volume-led income.
Mediapalooza 2021 may not be welcome but it’s a necessary step on the road to improved standards in our industry, including better pitch management itself and a higher standard of independent media consulting.