Welcome to $30 Billion in Media Agency Reviews

Fewer than 100 marketers dominate network television advertising. Many of these marketers are now reviewing their media agency relationships, and many others will announce their reviews in the next several months. The advertising priorities and focus of these 100 companies, and the resources available to fulfill those needs, are undergoing a radical shift, empowered by technology.

MEDIA REVIEW ISSUE #1: Transparency

Whatever the reality of the transparency issue, my colleague at MediaVillage Brian Jacobs points out that transparency and rebate issues will inevitably be part of the agency/client conversation. Any media seller that has benefitted from "under-the-table" negotiations with agencies will find those conversations are now on-the-table and less effective in driving deals. Agencies and media companies need to shift from being a service business with pre-determined revenues and profitability, to having the upside of a share of growth and success. This is a radically different business than what's in place today. With all the emphasis on new metrics in this year's TV Upfront market (as explained in detail by my colleague at MediaVillage Charlene Weisler), less than 0.1% of total Upfront investments will have an actual connection to the sales results they generate or contribute to. Transparency needs to be a two-way street with a quid pro quo. Yes, require that agencies be fully transparent in their business dealings impacting directly on their clients' businesses. And let the clients be transparent about the results and impact of their media investments on their business – and give the agencies an upside when goals are surpassed.

MEDIA REVIEW ISSUE #2: The 4Cs -- A Core Corporate Communications Culture

Media companies and agencies have failed dismally at building differentiated brands that clearly define to their business-to-business clients their unique attributes and value. Like P&G and Unilever, agencies and media companies are struggling with past organizational models that focused on individual divisional P&L's with little to no focus on or investment in a core corporate communications culture.  When any agency pitches itself, how do they describe the core values of their firm, and how does that description conform to the core values of the parent holding company? A "brand" is defined by clear differentiation and value, well presented, and consistently fulfilled. The agencies and media companies that will thrive in the future will be those that clearly define, communicate and deliver on unique brand value.

MEDIA REVIEW ISSUE #3: Bridges, Roads and Tunnels

Like our nation's roads and bridges, the infrastructure underpinning the media and advertising business needs to be overhauled and fortified. Many current business models simply can no longer hold the transactional weight now required. Much of today's basic ad business foundation was constructed for an industry of three TV networks and a dominant print industry. It's an industry for which the fax machine was a huge leap forward (an antique that remains in use in many parts of our business). As marketers make decisions impacting billions of dollars in media spend, their compensation formulas and the resulting pressures for cost efficiencies placed on media sellers must recognize the investments that will be required to fulfill their demands.

MEDIA REVIEW ISSUE #4: Data, Data and More Data

Integration of multiple new data streams, along with accompanying analytics and interpretation, require investments. Marketers can make demands that will require new investments by their agencies and media sellers, but these agencies and media companies should require a revenue upside before they agree to invest. It's not about the data. It's the analytics, interpretation and application. Data costs money; intelligent analytics, purposeful interpretation and effective application of data deserves financial rewards.

MEDIA REVIEW ISSUE #5: Innovative Native Content and Cause-Based Marketing Solutions

Marketers will seek content solutions, creating opportunities for agencies and marketers to partner in new business relationships. These relationships will include non-traditional compensation models. These compensation models will open the door to new conversations around transparency. One of those compensation models will include sharing equity participation in new media and content properties with clients. Circles, upon circles, upon circles.

MEDIA REVIEW ISSUE #5: Gender and Multi-Cultural Diversity

Marketers, agencies and media companies cannot hope to relate to shifts in media consumption realities unless they hire and empower a young, gender diverse and multi-cultural workforce. These young team members need to be quickly elevated in authority and responsibility --- to have a meaningful voice in decision-making. Aging white males may be making the decisions that will drive the $30 billion in media reviews, but the young employees who will be responsible for implementing the campaigns need to reflect the future, not the past. The winning pitches will be those that understand and embrace these emerging consumers and audiences, and demonstrate in their pitches their understanding of this new reality.

The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillage.com management or associated bloggers.