By Yesudas
Will advertisers continue to pay commission to media agencies?
This is a big question and soon some media agencies will find the tough answer. These agencies took birth in 1995 to address audience fragmentation.
While cost saving was the primary objective, they also provided sophisticated optimisation tools and techniques. This broke the tradition of 15% agency commission. Although it was initially broken down into 12.5% and 2.5% in favor of creative agency, clients soon started questioning the relevance of commission for every ad exposure. And so, creative agency commission vanished.
In the next four years, a lot will change. A larger digital ecosystem will be a reality. While TV is not dead even in a market like the US, Netflix consumers account for approximately 37% of bandwidth.
In India too, content consumption will change. Digital complements traditional media today. But we will see brands being launched and sustained only on digital.
In 4-years, India will have 300 million consumers buying online. Digital advertising will touch US$ 4 billion.
Data becomes the key to all decisions
I’m talking real data and not sketchy extrapolated audience measurement. There will be a handful of platforms/companies, like Google, Facebook, Twitter, some of the e-commerce players Amazon, UIDAI and perhaps the DTH and OTT, which will own large scale consumer data.
Will advertisers still be motivated to pay commission to the “agent” to facilitate interactions? Google, which has been consistently investing huge resources on data, today earns revenue, more than the Top 5 global ad agencies. Incidentally most of its revenue comes from Ad Words.
Many advertisers engage with Google directly and/or work with very creative and specialised boutique service providers. One can take refuge in the fact that such consolidation is sometime away and clients still need hand holding. But whose hands will the clients hold? Advertisers are already setting up internal programmatic desks even for ad placement across platforms in order to save cost and control data.
What happens when we become a sizeable digital market? Will global headquarters of large clients mandate Indian operations to go this way? There’s no “agent” needed here either. Will traditional TV also move the programmatic way? Yes is the answer in all likelihood with rich and real data.
Get the fundamentals right
Media agencies must possess the ability to unlearn and stop thinking short term. It needs a reexamination of marketing in a world, where linear purchase funnels do not exist. Many get confused between process automation and digital transformation.
There are many discussions around SEO; most believe it is the soul of a marketing strategy. But the core premise: that it is all about improving web experience gets lost. A supposed search specialist’s explanation on how schema markup works, at a client meeting the other day, took me by surprise.
This is the result of treating symptoms as against root causes. Traditional TV planners, barring very few sparks, remain TV planners despite forced Google certification. A digital planner with 2 years on the job feels he/she is the master of marketing.
Consequently recommendations for “innovations” end up being front page of a newspaper, slit open or a site capture. “Content” will be a video produced based on some topical events, entirely lacking connect. How can you ever advise a client on “After-ShopMarketing” through such transactional, short-term thinking? The time has come to make meaningful investments in people.
Let this be beyond revenue correlations. Create and use data on staff, basis historical evidence on their ability to think and come up with relevant solutions. Give them additional responsibilities by recrafting scope of work. Encourage them in the journey for ideas that will get brands in the middle of consumer conversations.
Good people with thinking ability will ensure deeper client engagements. Let such clusters, with people from multi disciplines, become part of all clientfacing teams.
Leaders from pre-digital era must have a plan
At a recent industry debate, senior leaders spoke for and against a motion: is digital marketing more hyped than real. I wonder what “digital marketing” is about. Even people speaking in support couldn’t articulate their points with conviction. While I personally don’t agree with the view it is hyped, I liked points made by those who believe it is. Digital is a mandatory tick box for many.
Leaders, in addition to equipping themselves with deep knowledGe, must ensure there are maximum integrated marketing conversations with clients. Media agencies must start offering accountability to businesses and not just for delivery of theoretical numbers. They must accelerate investment in data and encourage clients to create engaged communities. This can bring in money for clients against the current trend of them only spending.
The right media agencies can become intrinsic and irreplaceable if they stop thinking like trading “agents”. They can also protect their rightful fee for brand building. Let “commission” and “agent” disappear.
(The author is managing director and co-founder, triggerbridge. Views expressed are personal.)
Will advertisers continue to pay commission to media agencies?
This is a big question and soon some media agencies will find the tough answer. These agencies took birth in 1995 to address audience fragmentation.
While cost saving was the primary objective, they also provided sophisticated optimisation tools and techniques. This broke the tradition of 15% agency commission. Although it was initially broken down into 12.5% and 2.5% in favor of creative agency, clients soon started questioning the relevance of commission for every ad exposure. And so, creative agency commission vanished.
In the next four years, a lot will change. A larger digital ecosystem will be a reality. While TV is not dead even in a market like the US, Netflix consumers account for approximately 37% of bandwidth.
In India too, content consumption will change. Digital complements traditional media today. But we will see brands being launched and sustained only on digital.
In 4-years, India will have 300 million consumers buying online. Digital advertising will touch US$ 4 billion.
Data becomes the key to all decisions
I’m talking real data and not sketchy extrapolated audience measurement. There will be a handful of platforms/companies, like Google, Facebook, Twitter, some of the e-commerce players Amazon, UIDAI and perhaps the DTH and OTT, which will own large scale consumer data.
Will advertisers still be motivated to pay commission to the “agent” to facilitate interactions? Google, which has been consistently investing huge resources on data, today earns revenue, more than the Top 5 global ad agencies. Incidentally most of its revenue comes from Ad Words.
Many advertisers engage with Google directly and/or work with very creative and specialised boutique service providers. One can take refuge in the fact that such consolidation is sometime away and clients still need hand holding. But whose hands will the clients hold? Advertisers are already setting up internal programmatic desks even for ad placement across platforms in order to save cost and control data.
What happens when we become a sizeable digital market? Will global headquarters of large clients mandate Indian operations to go this way? There’s no “agent” needed here either. Will traditional TV also move the programmatic way? Yes is the answer in all likelihood with rich and real data.
Get the fundamentals right
Media agencies must possess the ability to unlearn and stop thinking short term. It needs a reexamination of marketing in a world, where linear purchase funnels do not exist. Many get confused between process automation and digital transformation.
There are many discussions around SEO; most believe it is the soul of a marketing strategy. But the core premise: that it is all about improving web experience gets lost. A supposed search specialist’s explanation on how schema markup works, at a client meeting the other day, took me by surprise.
This is the result of treating symptoms as against root causes. Traditional TV planners, barring very few sparks, remain TV planners despite forced Google certification. A digital planner with 2 years on the job feels he/she is the master of marketing.
Consequently recommendations for “innovations” end up being front page of a newspaper, slit open or a site capture. “Content” will be a video produced based on some topical events, entirely lacking connect. How can you ever advise a client on “After-ShopMarketing” through such transactional, short-term thinking? The time has come to make meaningful investments in people.
Let this be beyond revenue correlations. Create and use data on staff, basis historical evidence on their ability to think and come up with relevant solutions. Give them additional responsibilities by recrafting scope of work. Encourage them in the journey for ideas that will get brands in the middle of consumer conversations.
Good people with thinking ability will ensure deeper client engagements. Let such clusters, with people from multi disciplines, become part of all clientfacing teams.
Leaders from pre-digital era must have a plan
At a recent industry debate, senior leaders spoke for and against a motion: is digital marketing more hyped than real. I wonder what “digital marketing” is about. Even people speaking in support couldn’t articulate their points with conviction. While I personally don’t agree with the view it is hyped, I liked points made by those who believe it is. Digital is a mandatory tick box for many.
Leaders, in addition to equipping themselves with deep knowledGe, must ensure there are maximum integrated marketing conversations with clients. Media agencies must start offering accountability to businesses and not just for delivery of theoretical numbers. They must accelerate investment in data and encourage clients to create engaged communities. This can bring in money for clients against the current trend of them only spending.
The right media agencies can become intrinsic and irreplaceable if they stop thinking like trading “agents”. They can also protect their rightful fee for brand building. Let “commission” and “agent” disappear.
(The author is managing director and co-founder, triggerbridge. Views expressed are personal.)
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