Quandary for Media Agencies: Golden Eggs from a Sick Goose

These deals and the income from them haveamp160for many years been crucial to their parents the major holding companies The media agency divisions have been their star performers but now the engine that39s been keeping the whole enterprise flying along is sputteringA major fix is needed but it39s hard to replace an engine at 30000 feetSomeone once described these media agency networks to me as being like casinos There39s the frontofhouse dancing girls the glamourous waitresses the charming croupiers And then in the backroom away from the light and the thick carpets there39s the money menamp160You39re persuaded to enter by the glamour but at the end of the day the odds are not in your favor The house never losesAgencies are full of experts or so they claim A few years ago every serious agency talked up its marketing science capabilities World class we were told But as the agencies themselves have pointed out in a different context there39s a problem marking your own homeworkNowadays every agency has brilliant ad tech capabilities World class Well if the GoogleYouTube story shows us anything it seems the muchvaunted brand safety systems might not be all that they39re cracked up to beGo back further and several major agencies claimed they were the communication world39s equivalent of McKinsey World class consultantsamp160We39ll see how real that claim turns out to be as the likes of Accenture turn their attention to helping clients tackle the intricacies of online advertising by in many cases building inhouse tech stacks for major advertisersRemember the agency sneers when a few advertisers started on that journey It will never work it39s too complicated they39ll soon find it39s more productive to use us real experts in the agencies and so onA few years ago an agency CEO told me that in his opinion agencies faced a binary choice Either invest in planning I use the term loosely to encompass nonbuying activities and become true consultancies or close the agencies39 London offices fire all but the traders invest in the same sort of technology used in stock market trades and move to an industrial estateA couple of weeks ago that door too seemed to start to close as The Drum reported on a plan to trade online media on a NASDAQstyle exchangeAccenture Deloittes and the others have said they have no interest in media buying They do though have an interest in planning and technology They have the reputation the trust of senior clientsamp160and the budgets to attract top agency talent a la Google and FacebookThe network media agencies on the other hand currently have the wrong sort of reputation and a serious trust deficitUnder attack from both sides the major media agencies face a huge problemamp160Their owners the holding companies risk killing the goose that laid the golden egg When or rather if the obituaries ever get to be written the unrelenting focus on shortterm trading revenues over the building of long term profitable business relationships will be seen to have been at the heart of the problemThe golden eggs may yet keep coming but what we have right now is a sick gooseClick the social buttons above or below to share this story with your friends and colleaguesThe opinions and points of view expressed in this article are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated bloggers

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Quandary for Media Agencies: Golden Eggs from a Sick Goose

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Brian Jacobs

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Quandary for Media Agencies: Golden Eggs from a Sick Goose

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