Are media agencies under attack?
An Q&A with founding partner Gustav Goosen on whether in house or outsourced buying is preferred in SA agencies.
Why would a client prefer to do this rather than go through an agency?
It comes down to control. Ad networks, ad exchanges and buying ads programmatically has many technology platforms involved in executing the buy (as well as limited IP readily available to understand the complexities) and this has created obscurity; clients are becoming more aware of the associated risks and looking for oversight of these type media buys to ensure transparency and procurement governance is adhered to, just as it adheres to procurement governance and protocols elsewhere in the organisation.
Data ownership also underpins the move. Advertising clients are realising that media consumption, conversion and ultimately, customer data, are all assets they ought to own instead of trading off a data set they helped create and pay for, yet they don’t own.
Integrating this data into their businesses, existing processes or business systems, e.g. CRM or others, become taxing if the data doesn’t belong to them and the integration thereof hasn’t been purpose spec’d from the outset.
Will this trend be coming to South Africa anytime soon?
There are a few clients who have embarked on this already, albeit not at full scale or full solution deployment, but I’m sure it’ll gain momentum as skills become more readily available and the veil of complexity is lifted.
Do you see this trend as a threat to South African agencies?
If their business model is heavily dependent on media procurement services, then yes. Effectively media buying moves closer to standardised procurement processes and their related efficiency drivers, i.e. integration with existing business systems such as SAP, SalesForce, or others.
These environments resonate much more with IT, technology, finance and procurement processes than media ever did and alternative agents/business partners/consultancies are much more entrenched in these parts of clients’ businesses than advertising agencies have historically been. This is the space the Accenture’s of the world are comfortable playing.
What do agencies offer that in-house digital buying won’t?
Media IP. Media as part of the total advertising fulfillment value chain. But this IP can be bought and in some instances that IP is becoming less relevant in the changing landscape.
Historically, media agencies could also extract economies of scale through consolidated media buying or media owner negotiations and pass that benefit on to respective agency clients. The changes in the way media is being procured sees it moving away from a scaled approach (think – TV, print, radio ad buying), to a single instance approach with the price point determined real time when procuring that instance (think – this ad, on a specific, pre-qualified, customer’s mobile phone, right now).
The ability to determine and evaluate the value of that instance, in the moment, and decide whether it’s worth buying (or selling by the media owner for that matter) or not, and then executing that buy in a fully integrated business process is powerful. Technology is now enabling these decisions that require a new skill set, new IP and it doesn’t have to be based in an agency.
Opinion | Gustav Goosen | To read the original article and opinions of media experts, visit Media Online.