Turning the Advertising Agency Business on Its Ear – Mike Drexler

What Iamp8217m writing about today some in our business may consider blasphemy But I donamp8217t think so because we see a trend emerging that suggests things arenamp8217t going as well as they might be for advertising agencies Clients are showing more disappointment and agencies are complaining about being financially squeezed So whatamp8217s wrongTo begin with clients are asking agencies to do more for less money The old shibboleth about agency media amp8220cloutamp8221 never really was entirely accurate because most media deals were based on client spend not agency spend and most clients established a base with the media that served as a benchmark for increases unless considerably more money was invested with the particular media company Yes agency amp8220bank accountsamp8221 have something to do with it as they amp8220threatenamp8221 the media but media companies arenamp8217t going to lose money and give away inventory either And the really big advertisers arenamp8217t happy about using their leverage for the smaller accounts at the agencyNow that digital media companies are doing overall agency deals and trading desks are set up to negotiate in real time the push for media efficiency gets more acute Even so clients are keeping agency servicing fees front and center and agency operating costs are getting tighter So whatamp8217s an agency to doLetamp8217s get back to agency compensation Most media agencies are building their offerings beyond just traditional and digital media planning and buying They are adding Account Directors and new divisions specializing in such areas as sports healthcare entertainment PR retail and other categories Media agencies are also creating content divisions and branding units and now taking the amp8220ownershipamp8221 lead with clients with account handling Most of these functions are fee based with incentives or performance metrics attached to them Itamp8217s now less about billings and more about income profits and costs Yes cost management and cost control are critical Clients demand lower servicing fees and agencies must focus on operational efficiency So where does the creative function come into play Hereamp8217s where it gets interestingAs holding companies have grown bigger and have been on a spree to add all sorts of digital expertise to their assets creative boutiques have also increased Really top notch creative people who decided they had enough of the corporate money game and want to reach out on their own to do great unusual breakthrough creative work Taking on assignments from all brand advertisers Often when they are asked to pitch and a client wants amp8220full serviceamp8221 they need a media agency to go along So they look for a media agency either with a holding company or an independent because itamp8217s not likely they would hire a staff of their own media people Hereamp8217s where the blasphemy part comes inWhat if the full service media agency becomes the lead What if media agencies start adding amp8220creativesamp8221 to their organizations as employees or strategic partners Interesting isnamp8217t it And not so far fetched because the digital world has also made media and creative almost inextricable Creatives reporting into media agencies Wow Media agencies today have more data resources and consequently more consumer insights available to guide creative and more media channel opportunities to explore than ever before Iamp8217ve been asked about this from media agencies and creative people Will creative people even think about it let alone embrace it I donamp8217t know But it sure seems possible and will definitely turn the agency business on its earMike Drexler is cofounder and Managing Partner of DrexlerFajen ampamp Partners a media consulting and agency review firm that works with advertisers to evaluate their agenciesamp8217 performance He can be reached at mikedrexlerfajencomCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates at MediaBizBloggerThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries

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Turning the Advertising Agency Business on Its Ear – Mike Drexler

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Turning the Advertising Agency Business on Its Ear – Mike Drexler

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