The media landscape has evolved dramatically in the last couple of years, thanks in no small part to technology as a powerful new enabler in the buying process. But while technology may be an enabler, it’s also fundamentally reshaping the media landscape, creating a new high-tech, high efficiency model in its wake.
But is it? And how much more complex will it get? Are marketers really seeing added value in this new media landscape, or do marketers just think they are? How are media owners faring? And how is the agency role shifting to accommodate new media models that are emerging?
While programmatic buying is perhaps the biggest (and most high profile) tectonic shift being experienced in media today – it’s not the only complexity that marketers are facing in today’s media landscape.
The automation of buying, using real-time systems and algorithms to automate media buying has become a hot topic in and of itself. While programmatic buying technically cuts out a lot of manual work, there are any number of technologies (and companies) that take their fees or commissions along the way. And this has marketers questioning how hard their marketing dollars are really working.
Fragmentation and Competition
With the increasing number of media channels across the paid, owned and earned ecosystems, competition for marketer dollars has never been more fierce, and marketers have never been more engaged in where and how their dollars are deployed.
Fuelled by a rapid change in media consumption and the rise of all things digital, the media landscape has changed rapidly – particularly in print and broadcast. Media consolidation has become a necessary requirement for survival in Canada and around the world, as media owners take radical steps to protect their revenues.
Simply put, marketers want transparency around how much their media agencies are paying for their media buys, coupled with verification their advertising has actually run when and where it was supposed to. The rise of technology in the media business has marketers asking more detailed (and sometimes uncomfortable) questions than ever before.
Media Audience Measurement
When you couple programmatic buying and transparency questions, it’s logical that marketers will want to push for stronger, more robust methods of audience measurement. New media channels and a lack of robust ROI methodologies have fuelled a wide variety of measurement metrics across platforms. This lack of standardization only adds to the current media industry confusion and uncertainty.
Tracking Media ROI
With budgets under pressure, marketing dollars have naturally come under close scrutiny, generating greater need for improved tracking systems and stronger ROI calculations. The requirement to prove effectiveness of new and traditional media channel activity has never been stronger – and it’s here to stay.
Media agencies subsiding fees through rebates, commissions or sometimes non-monetary incentives from media owners has become a hotly debated topic – something we’re now actively helping address through our media verification offerings.
Recruitment and Retention
Finding and retaining the highest quality resources to support and meet this new, high tech, high pressure, low cost media landscape is putting incredible strain on the entire media ecosystem. Media agencies in particular are having to work exceptionally hard to find and the retain the brightest minds for their clients.
All of the issues described here from fragmentation and competition, to recruitment and retention, are putting financial pressure on every area of the media ecosystem. Factor in middlemen throughout the programmatic buying chain and revenues begin to shrink. And that leads us to…
The Race to Zero
The downward pressure on media costs where agencies are remunerated on cost of planning or executing respective media buys rather than value, is causing a myriad of issues. Quality of resources and staffing retention being just two consequences that are diminishing value all round. I’ve written before on the Race to Zero, because marketers, media owners and agencies must quickly reach a consensus on how everyone can make a fair profit in this business.
So What’s Next?
Think today’s climate is complex? I’ve got news for you – it’s going to get even more complex in the years ahead and in my view, these are the headlines:
Marketer demand for knowledge and insight. Marketers are getting more sophisticated and more demanding in their expectations, and are no longer willing to pay for media that’s not working or doesn’t have a meaningful or logical ROI calculation tied to its genesis.
Programmatic moves into mainstream media. Programmatic buying has only scratched the surface with digital – get ready for programmatic to move beyond digital media into mobile, television and other traditional media channels.
Tighter contracts. Marketers are already taking greater control over their media buys in an effort to create greater transparency when managing programmatic buys. And if it’s not already underway, marketers will be rewriting contracts to ensure they know where every dollar is going and where it’s spent.
Technology rules. Expertise in data and technology is now one of the most valued currencies when it comes to media capabilities and media differentiation. Great media resources are soon going to become scarce and very expensive and marketers are going to have educate and support themselves with a much stronger understanding of the technologies that power their media buys.
While some marketers, media owners and agencies are already scrambling to reinvent their processes, approaches – even their businesses – to grow, protect or halt a decline in revenues, none can achieve their objectives on their own.
Three Guiding Principles
If you think media is a complex business today, it’s going to get a whole lot more complex in the years ahead. To deal with this complexity, I believe there are three fundamental shifts the industry needs to make:
- Build bridges not walls. Marketers, media owners and agencies must work together to create a workable ecosystem that creates transparency, fairness and a reasonable profit for everyone.
- Embrace technology. Instead of fearing technology – embrace it. Learn everything you can about how it works and how you can use the data that drives it plan, buy, analyze and adjust with more knowledge than ever before.
- Nurture and reward talent. As an industry, we’ve got to start hiring, training, growing and retaining the best talent there is. To do that, we’ve got to recognize media value pay fair value the media we want and for the technology and resources that make it all work.
Anything less and media complexity will rapidly become media chaos. The choice is yours.
Stephan Argent is founding partner of The Argedia Group, Canada’s leading agency search and management consultancy. Read more like this on our blog ‘Marketing Unscrewed’. Follow me on Twitter @ArgediaGroup