AD AGENCIES COULD BECOME AN ENDANGERED SPECIES!
Conde Nast's recently launched Studio 23, is a branded content studio that will allow advertisers who buy major programs to access their editorial assets. In other words, Conde Nast's stable of award winning editors would help create ads for advertisers! This is a major game changer. It is a brilliant move that other major media companies i.e. Meredith, Hearst, Time Inc. and others are certain to follow. Native advertising started to take down the separation of church (editorial) and state (business). Studio 23 and what follows will make every editor now responsible for helping to generate advertising revenue across all platforms.
Grayden Carter, Editor-in-Chief of Vanity Fair, is already a savvy marketer of cultural tastes, owning several successful restaurants, a movie producer and hosting the major after Oscar event. Whatever the ad category, most editors of successful magazines better understand how to connect with customers than any ad agency or branding company. Imagine a TV commercial for a major automotive company that was helped created by a Car & Driver and Road & Track editorial team which Hearst now owns. Whatever the marketing/advertising platform, print, TV, digital, events, etc. most media companies have greater expertise and experience than a traditional ad agency creative head who main objective is to win an award versus sell product.
In some ways magazines becoming a creative marketing force through their editorial support has been a long time coming. Every fashion and shelter magazine have offered editorial credits to major advertisers as part of their ad sales presentations for decades. Many magazines offer advertisers a free facing advertorial page opposite their ad; often the advertorial page is created by the magazine's in house creative team. That's because every major publisher has their own highly talented business side creative groups that put together special sections for advertisers. Often times a publication can use its clout to get major celebrities to participate in their themed ad sections.
Major media companies live or die by their ability to connect with consumers and obtain both readership and viewership. Imagine a major TV program producer such as a Sony or Mark Burnett helping advertisers produce TV commercials. Or a Google, Match.com or Facebook helping companies produce digital ads. When Carol Smith was Publisher of Elle she helped launch the highly successful Project Runway TV Show.
Media companies already have an existing structure that is in most cases profitable. To create a new marketing capability for major advertisers would add little to their operational costs and be highly profitable. Ad agencies are finding it tougher and tougher to stay profitable given how fee structures have been greatly reduced. Often a major publically traded ad agency will take on a major new client at a fee that will not be profitable. This is done to generate favorable news that can positively impact their stock short term.
The other major function that ad agencies have is media planning and buying. With the advent of automated buying for TV and digital this function and capability is no longer that needed. Print is in most cases negotiated and usually bought through major corporate programs with a Conde Nast, Hearst or Meredith. Thus, the media function of agencies has already changed and will continue to do so.
Ad agencies will continue to exist but their roles in both creating and buying of advertising could become diminished. The challenge to ad agencies is to rethink their current structures and become better branding partners for clients.
Steve's most recent book You Can't Fall Off The Floor - The Insiders' Guide to Re-Inventing Yourself and Your Career chronicles his 50 year career working for over 25 different companies with 189 lessons learned and insider tips from Gayle King, Cathie Black, Chuck Townsend and 28 others; Blacker is still going strong today as a partner in Frankfurt & Blacker Solutions, LLC. His web site is blacker-reinventions.com and e-mail address is email@example.com
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