Media agencies and new competition
(Media) Agencies vs the competition: who will win? Siting on the outside provides a view. Competition includes consultancies, creative agencies, media vendors/partners, and advisors. The group (s) that best creates value will win. Consultants take top down approach, agencies typically are bottom up. In the end value is derived from outcomes and requires ideas, IP, process and talent. Agencies spend a lot of time talking about their investment in talent. Starting pay is low; the actual work in the first few years can be summarized as “administrative plus” (necessary but focuses on inputs not outcomes); little real training (memorizing concepts is not training; hearing great story tellers talk is not training). After a few years we expect this talent to “manage clients”, deliver value and drive vision. Consultancies, creative shops and media vendors don’t work or hire like this. Mergers will create interesting models but many agency employees are not prepared to make the shift….Change or die….
When Sapient was purchased by Publicis I wondered how we would integrate our services...they were positioned as a tech company/consulting firm. In Canada we figured out a successful model but it required compromise from all parties. Holding companies tend to work from the bottom up, focusing on marketing initiatives like creative or media strategy and execution and keep financial silos in tack. But management consultancies work from the top down, offering services around total business transformation, which inevitably touches marketing and advertising strategy and have better margins to invest and "play within".
Here is a view from adexchanger .
When agencies talk about business transformation they are trying to change the game...hard to do that when the bulk of business is about buying things....but perhaps they can do both. Can agencies hold onto services like digital...see this.
Finally CMOs now understand that a data-led strategy -- not creative alone -- is driving top-line growth. And this is where there are some interesting changes (struggle between top of funnel and bottom, brand vs performance). See