The Five Reasons For The Media Agency Pitch Avalanche

One of the big talking points over the last few weeks has been the flood of agency reviews announced by many large U.S.-based and/or global advertisers. I think these reviews are driven by a combination of factors, not just the much-publicized murkiness of many media agency dealings.

Death-by-agency deals. Although not the only reason, the fact that the ANA and  many other advertiser associations have shed a light on unsavory aspects of the way agencies are allegedly buying and (re)selling media deals to their clients is a major factor.

And it is not just media deals that are to blame; the way that agencies have managed trading desks is seen as equally bad. Advertisers are, at minimum, highly suspicious, and want to explore if there are better options out there.

Marketers are more digitally educated. Many marketers are becoming much more digitally marketing-savvy than before.

Last week MediaPost’s Joe Mandese reported that the fastest growing category of Ad Exchange seats (those in the programmatic media-buying marketplace)  was marketers, and not agencies or content creators .

Marketers have created social media competencies that are becoming true business drivers (think travel, banks, insurance and other service providers). Plus, many marketers now offer products that have digital baked into them (think cars, TVs, watches, phones, wearables, etc.). So while in the past agencies could perhaps claim digital superiority, marketers now very often know more about digital and data than their agency counterparts. Some of these reviews are driven by marketers looking for smarter partners.

Better integration. Marketers are also demanding more fully integrated, screen- and touchpoint-neutral strategies and plans. Agencies will argue that many marketers say that they want better integration, but their briefings are still very directive and silo-ed. I would agree this is often still the case. But at the same time, marketers are actively seeking solutions through reimagined internal structures and processes. The reviews are probably a reflection of that.

Cutting perceived fat. It is certainly a fact that all media agencies have recently reported decent to very strong Wall Street results, leading to the marketing procurement folks thinking there is still “fat” to be stripped. It doesn’t exactly help in the “woe is us” storyline that agencies like to bring up when talking about fees and profit margins that WPP’s Sir Martin Sorrell is actually the highest-paid CEO in the U.K. Add to this the perceived significant income from non-transparent media deals as outlined in the first point above, and another argument for a media review is created.

The macro-economic environment. And finally, the economy is relatively strong, and perhaps some marketers had put off looking for a better agency solution before. Others are still trying to stage a comeback from the economic downturn, and a third group is feeling serious pressure in today’s economic environment because their consumers have recovered but have developed alternative purchase behavior more aligned with their lifestyle and life stage.

As history has taught us, seismic shifts are seldom explained by one major reason. Far more often, it is a whole bunch of reasons that all of a sudden lead to a tipping point.

What does not make sense to me is the list of agencies included in the reviews, as many marketers seemed to include the “same-old, same-old” usual suspects. If you truly want a different outcome, change the ingredients!

By Maarten Albarda
Maarten has lived in five countries across three continents and honed his integrated marketing communication skills at JWT, Leo Burnett, McCann-Erickson, The Coca-Cola Company and AB-InBev. He now runs his own integrated marketing consultancy in partnership with Flock Associates, and has written the book “Z.E.R.O.” with Joseph Jaffe.
Courtesy of mediapost