Reviewmaggedon!

Mediapalooza!

MEDIA AGENCY REVIEWS

What happened?

THE NEW NORMAL

Projecting Agency Reviews Going Forward Survey of 420 marketing executives who represent 90% of the top 100 U.S. advertisers and 118 companies in all.

• Are you planning an agency review in the next year? – Creative Agencies: 66% said yes

– Paid Search Agencies: 65% said yes

– Media Agencies: 64% said yes – Digital Agencies: 61% said yes

REASONS FOR AGENCY REVIEWS

PROCUREMENT BEST PRACTICES

• Agency compensation >>> & media pricing

• Competition improves the incumbent

• Eliminate non-transparent media buying • Trading desk mark-ups

• Rebates of any kind

AD-TECH MATURES AS MARTECH COMES OF AGE

• Programmatic/RTB systems going forward • MarTech stacks and DMPs move in-house

MEDIA STRATEGY LAGS BEHIND THE CONSUMER

• Digitally empowered audiences/consumers

• Mobile media consumption

• Brand equity still matters!

MARKETERS ARE FRUSTRATED

"It was inappropriate that the 4A's issued its press release with the unauthorized use of ANA member company names. That use implies that the ANA and the companies named in the release endorse the principles of the 4A's -- which they do not. The ANA requests that their names be removed from the website of the 4A's, followed by apologies to the companies it unfortunately identified…The implication that the ANA members are endorsing that is blatantly false."

from the May, 2016

ANA Financial Management Conference

ON TRANSPARENCY:

“It is about conflict of interest in a double-sided business model. So agencies cannot switch to transparency on a per-client basis.

They should decide between being doctors or pharmacists.

Today, they are both. Because so much money is at stake, clients are understandably risk averse.”

Observation:

With every media agency review, the media agency service becomes less of a “doctor” and more of a “pharmacist”

An Independent Study of Media Transparency in the U.S. Advertising Industry

5.1. Client Pricing Pressure (Page 50) • A former Agency Holding Company executive who left the industry within the last

two years reported that, approximately ten years ago, client media pitches were led with discussions about campaign strategy and an agency’s ideas. He reported that

this dynamic has now shifted to one in which discussions about price take the lead. He noted that “many” clients entering into

pitches currently send out large spreadsheets asking agencies to produce detailed

pricing information in advance of a presentation on strategy. He describes this practice as a “buying model, not a thinking model.”

Evolving Business Practices: Agencies guilty of bad behavior but…

marketing departments must own new and better business practices

July 18, 2016

• Advertisers should take ownership of data, and exert control over media planning and how technology is used on their behalf… (page 5 & 21)

• Advertisers are responsible for more active stewardship of their media investments… (page 11)

• Advertisers should adopt processes for the selection and continuous evaluation of marketing technology partners to meet changing needs… (page 22)

Non-Transparency is Only One Part of The Problem

4.3.4. Media Purchased Programmatically (page 40)

Marketing Technology

Stacks

Corporation Media Agency Media Company

Marketing Executive

Media Buyer

Media Seller

MarTech is different than Ad-Tech

AD- TECH

IBM, Accenture, Salesforce.com, Google Analytics, Adobe, Microsoft, DataXu

Cadreon, Xaxis, VivaKi, Accuen

= Information

= Data Sharing

THE HIERARCHY OF KNOWLEDGE

KNOWLEDGE + CONTEXT = VALUE

2 Types of “Muscle Memory” for Sellers

Agencies: Data & Information

• Want to guard information

• Thrive on complexity

• Want access to lots of

resources

• Want sales people to

talk first

Marketers: Insights & Wisdom

• Want to share insights

• Focus on solutions

• Want one executive to

represent their needs

• Want sales people to

listen first

PLACING YOUR BETS

Investors have SaaS fantasies

Media agencies are becoming machines

Marketers are looking for strategic solutions