Why many advertisers feel so bamboozled by their agencies
Bob Wootton argues that asymmetry between agencies and their clients undermines trust and hinders the relationships - and it might need a radical response.
It's become a truism that 'there's never been a more interesting and exciting time to be in media'.
The creatives and suits may still be in denial about this, but the once 'meek' have truly inherited the earth.
As a media practitioner for over 40 years, I can't say that this doesn't give me a small glow of satisfaction.
It's as axiomatic that media deployment and management have never been more complex and challenging.
Despite enormous commercial pressures on them, agencies have responded pretty well, investing in the new skills required and creating or acquiring new businesses. But how are the advertiser clients faring?
I've had several multi-territory / multi-discipline conversations recently where major advertisers have candidly shared their suspicion that their agency (network) was running rings round them.
Not on the basic, short-term bread and butter procurement metrics, of course, they're all fine, if also of arguably diminishing import to marketers. No, on the strategic issue and future. They're suddenly realising that their agency networks - big ones - have been and are continuing to develop in ways that hadn't been discussed with them and probably don't align much with their needs as a 'client'.
Of particular concern :
- agencies taking on the characteristics, if not all of the activities of a media owner by buying media on their own account, sometimes called 'Inventory Media'.
- vertical integration, which sounds like a very sensible business evolution and diversification plan.
- and no transparency, whether of mark-up on bought media or on who's taking what as the money flows through the value chain. Especially in online.
Cue my regular diatribe about clients not being agencies' most important revenue sources any more, when another thought crossed my mind...
The best agency networks are run with a tight grip, if not by a single figurehead leader, then by a pretty small, tight and highly-motivated group of senior executives who are actively involved in all aspects of the business and see their company's big picture. Similarly, the integrated all-embracing agency network pitches which are now a big part of the landscape.
Whereas advertising budgets are typically run by middle management, who may be excellent on detail but may not even be privy to the big picture stuff. That's real asymmetry, and is as good a reason as I've yet come up with as to why advertisers are feeling bamboozled by their agencies.
This isn't to say that much better, tighter contracts should not be put in place to minimise unwanted practices. There's also a big role for performance and compliance auditors, though there are some questions as to whether they're up to it. How can a media auditor square up to and challenge a media buyer with significant, maybe 25%+, market share and the intelligence that comes with it? Or a highly-sophisticated and rapidly-evolving online trading platform?
But the only way an advertiser is going to address this asymmetry effectively is by mirroring their 'partner'. In other words, the advertiser CEO is going to have to mirror the network's, and so on.
Radical stuff, but as things stand I'm not sure I can see another way.
Or maybe we should look the other way...
Reverting to the old 'Magic vs. Logic' debate, it seems to me that online and programmatic are not art, but rather pure craft. They deliver tangible, measurable outputs, and often outcomes too.
So surely it doesn't matter how they're delivered, provided it's within the advertiser's parameters - reach, frequency (effectiveness of any cap), cost, sales, ROI, engagement. Only the last of these is in any way subjective, and even then industry has long used a wide range of metrics, usually around dwell, as surrogates.
So instead of involving themselves in the complex detail (and too often mind-numbing hype) about how intermediaries' offerings actually work, might advertisers not be better off simply measuring empirically by end-results?
For example, running everything in constant beta test, using multiple partners simultaneously and always rewarding the latest winner.
This might see an agency network's offer pitted against an independent (already a fashionable setup) and even a white-labelled or in-housed solution too. Constant review, re-evaluation, adjustment and optimisation.
How would this impact on agency and independents' models? Will they become white label suppliers? No wonder agency networks are snapping up every independent that moves, WPP's December 2015 acquisition of Essence being the most notable and recent.
You could take this further and suggest that, rather than worrying about something we might never get to the bottom of (like transparency), why not simply brutally maximise and continuously improve the end results and let that end justify whatever means?
...er, as long as it's on brief and legal.
A recent online newspaper article about the hacking of billboard sites during the recent Paris Climate Summit offered another illustration of the problem with much current online advertising - too many highly-invasive ads all over the place, greatly hampering reading and navigation.
No wonder adblocking is gaining ground - there simply has to be a better way than this and the sooner the whole ad industry engages on it substantively and wrestles it to the ground the better. (ISBA has just produced short, sharp guidance for its advertiser members which should help).
Then over the weekend I was trying to find a recent but unsatisfactory purchase which I'm challenging on my eBay, only for the thing I was looking for to be obscured by a persistent skyscraper overlay with no visible 'close' button from a very well-known high-street bank.
Grr. It's my job to defend advertising but I honestly find these hard to defend and am genuinely surprised at reputable media continuing to carry stuff like this.
Maybe it's me being overly hopeful, but I sense that industry finally 'gets' this and each link is turning to address its part of the problem. I sure hope so.