Why marketers need to embrace their media agency

“Don Draper wouldn’t recognize 75 per cent of what we do,” said WPP founder Sir Martin Sorrell last month, referring to its revenues from data and digital marketing, over pure creative ideas that the Mad Men TV series ad agency boss is famous for.

Brands’ demands for digital marketing, programmatic buying and big data means these services – rather than simply big ideas - now make up about $14 billion of WPP’s $18 billion in yearly revenues.

While big ideas still thrive, they are no longer the preserve of the ad agency alone, Sorrell added. Media networks are becoming ever more innovative, creative and technology-focused, and clients are turning to them more than ever.

For instance, PHD’s ‘all-Lego ad break’ for the toy bricks feature film which recreated big brands’ advertising campaigns in Lego won two Gold awards at Cannes Lions last month, while Carat and MediaCom were both shortlisted for agency of the year at last week’s Marketing Week Engage Awards.

With simpler ad buying becoming more automated, media agencies are able to offer not only in-depth understanding of channels, data and technology but increasingly becoming the originator of the creative idea too.

Marketers are turning to media groups for creative ideas, social media activity, automated advertising and business metrics that go beyond media measurement.

Tracy De Groose, chief executive at Dentsu Aegis Network UK, which houses media agency Carat, says that while media used to be a subset of advertising, now advertising is a subset of media.

“Media as a business has diversified. When I joined Carat five years ago we offered around 15 products and services; we now have nearly 80, because in a world of paid, earned and owned media, paid media in the traditional sense is only a third of the story, so media agencies have had to evolve to reflect that,” she says.

Content marketing is a hot topic, with clients debating what actually defines it and agencies clamouring to provide films, publications and ‘thought leadership’ for brands under its banner. However, until recently it has been unusual for a media agency to lead the charge on content but Havas Media won the Content Marketing category at the Marketing Week Engage Awards last month (June).

It was always the creative agency’s planning director that knew a brand best. Now that primacy and dominance has been blown apart

Havas Media helped to negotiate a deal with Sky that resulted in the East Coast Trains series. But the train operator had to be brave because the broadcaster had full editorial control, which emphasises the ingenuity needed in the market to cut through and make an impact (see case study, below^[1]). 

It is incumbent on media agencies to be at the forefront of innovation, says East Coast head of marketing Natalie Cowen.

“The media landscape is changing all the time and so too are the opportunities as businesses continually look for different ways to connect with consumers. If a particular insight points you in a certain direction, I would expect a media agency to be at the forefront of that thinking and to be looking out for those opportunities,” she says.

Unilever has also stepped up the digital planning capability of its team at Mindshare and how it looks to buy media, according to UK & Ireland media director Sarah Mansfield.

The FMCG business, which owns brands including Lynx, Dove and Marketing Week ’s Brand of the Year Marmite^[2], launched its own trading desk within the WPP agency that operates separately from its centralised Xaxis offering.

“People think of programmatic as a method of increasing efficiency and that is an important part, but it also drives digital effectiveness by enabling us to create bespoke, addressable audiences for targeting,” says Mansfield.

Turning data into insight is now the key challenge. She says: “There is so much data available and one of the main things an agency can bring is focus on the metrics that matter in terms of driving media effectiveness.” 

Rival Mondelez aims to buy all of its online video ads programmatically after finding campaigns for brands such as Creme Egg yielded a better return on investment online than from TV ads. 

However, there have been rumours of media agencies fixing results to make campaign metrics seem more favourable while playing down the effectiveness of an identical campaign run by the ad platform, resulting in some ad tech firms looking to cut out the middle man. Mansfield, however, does not believe that would be wise.

She says: “Every media owner in the world wants to have a direct relationship with clients but agencies are there for a reason. We employ them to provide advice and best practice. They are experts in media buying and planning capability, which we could never look to replicate in-house.” 

Talent and innovation

Daren Rubins, chief executive at media agency PHD, says that although he would encourage clients to have direct relationships with media owners, he believes they would be missing a trick if they use only their own data.

The big challenge for agencies is to keep recruiting diverse talent he adds.

“If you keep attracting the same talent as 20 years ago, you’re going to keep doing the same job you did 20 years ago and that is not appealing to clients. It is incumbent on us to be braver and more ambitious in the people we hire,” he says.

This focus on talent and innovation led to the creation of an all-Lego ad break to promote the release of The Lego Movie earlier this year. It featured well-known ads for Confused.com, Premier Inn, BT and the British Heart Foundation, which were recreated using Lego bricks.

Each brand paid the same rate as for an ad break during ITV’s Dancing On Ice and also covered the cost of reproducing their ads in Lego. 

The broadcaster ran a 10-second trailer at the beginning of the break explaining the concept and two-second Lego Movie ‘blips’ flashed between ads before the full trailer was shown at the end.

As a result, the Warner Bros movie had three minutes and 20 seconds of prime time TV advertising but paid only the equivalent cost of showing its trailer and some short clips.

PHD says viewing for Dancing On Ice increased during the ad break and within four days of it airing it received an additional 700,000 views on YouTube. Four months later it has reached 1.1 million views.

While innovation is one focus for agencies, getting clients to emphasise their own media is another. 

Last month, Publicis-owned media agency ZenithOptimedia made the move to realign its business and advise clients to adopt an ‘owned first’ approach to communications planning.

The strategy means that brands will use paid media to drive consumers to their owned assets and platforms such as videos, photography and written content, which it claims produces higher levels of engagement than a traditional paid-for media approach.

De Groose says globalisation and convergence are two factors reshaping the media agency’s role.

Clients are looking to consolidate their media agencies into regional or global hubs, she says, highlighting the fact that the number of local UK media pitches is down by 20 per cent this year while global pitches are up by around 40 per cent.

Technology is also facilitating the ability for brands to engage consumers and convert to a sale at the same time, which is leading to a rethink of payment models.

“We are beginning to create remuneration proposals with clients that are getting closer to payment-by-results models. In future, more of our fee will be linked to our ability to deliver against certain metrics, and increasingly they are business, not media, metrics,” says De Groose.

To push this agenda and encourage clients and agencies to move from time-based to value-based remuneration and business models, the IPA and ISBA are hosting an event next week to debate the merits of a new industry standard based on performance management and investment.

Although the agencies do not like to admit it, brands are conscious of a rivalry between media planners and ad agencies.

Joe Clift, chief marketing and communications officer at the CFA Institute, an organisation for investment professionals, says when the concept of the communications planner began to emerge on the media agency side 10 years ago, it was not met kindly by creative agencies.

“I was senior vice-president and head of brand management at Visa Europe at the time and I sensed that the creative agency felt that the communications planner was there to steal their thunder and take their territory,” he recalls.

“Prior to that, it was always the creative agency’s planning director that knew a brand best. Track forward to now and that primacy and dominance has been blown apart thanks to the proliferation of media channels and the opportunities they provide.”

As a result, the discipline of communications planning has grown exponentially, meaning the ownership of the client relationship is dispersed evenly across ad and media agencies and in some cases it now lies on the media side.

“Smart media agencies have focused on communications planning as a discipline and having their hands around the maximum number of consumer touchpoints, therefore gaining a bigger share of responsibility in the client’s mind,” Clift, a former Lloyds marketer adds.

Unilever’s Mansfield does not believe there is any real rivalry between ad agencies and media agencies since they operate in different spaces but agrees that the level of creativity in media planning is immense.

“We like to think that as a business we are open to new ideas and are innovative in how we market our brands, so we are always willing to think about beta testing and being first to market to drive competitive advantage. A media agency at its best should be driving that agenda by bringing new ideas to you all the time and being proactive in that space.”

Pippa Glucklich, co-chief executive at Starcom MediaVest Group, believes the role of a media agency has become more important in clients’ eyes as they increasingly use technology to operate in real-time, rather than looking at survey-based planning and econometrics, as was the case historically.

“When I started in the industry, creative agencies had the upper hand and if you were lucky you got 20 minutes with the client at the end of the meeting. But because we operate in an increasingly complex media landscape, clients are looking for agencies to simplify the process and help their audience make clearer decisions,” she says.

The power of data

She believes it is often the smaller, emerging businesses that are smarter with their data.

King.com, creator of the Candy Crush Saga game is a relatively new business but has experienced phenomenal growth. It has tripled pre-tax earnings in the first quarter of 2014 to $249m (£146m), because as a digital business it understands the power of data and how to get people engaged with the brand, says Glucklich.

As co-founder of one of the largest independent agencies, The7Stars, Jenny Biggam says that the rise of digital media almost removes the argument for needing big volume to buy well.

“It’s about technology and having the skills to optimise campaigns, which ultimately gets the lowest cost for clients. It’s nothing to do with media agencies having buying clout,” she says.

Not being tied to a big group that might have its own agenda can also be appealing for brands, says Clift.

“I need to always be confident of the purity of the recommendations being made by my media agency. I don’t want its advice to be influenced by a big group-wide media buying deal that encourages it to maximise certain sales across its client base. That’s no good as it is not bespoke to my brand or my consumers’ needs,” he says.

There is no denying that the media landscape is getting increasingly complex but the brands that prosper and grow will be the ones that embrace the changes and take advantage of new opportunities.

“Change is a constant,” says East Coast Trains’ Cowen. “The challenge is going to be keeping up with what’s changing and, as a client, making sure that you understand your objectives. Never jump on the bandwagon without having a true understanding of how it will benefit your brand,” she advises.

Case Study: East Coast Trains

East Coast Trains was keen to boost brand awareness ahead of being handed back to the private sector in 2015.

Working with media agency Havas, the brand embarked on a project to create a 10-part behind-the-scenes documentary, providing unprecedented exposure for the company, which head of marketing Natalie Cowen says highlights the breadth of creative input that media agencies now have.

“Havas came up with an idea for ad-funded programming but we didn’t feel that would imbed the brand or give us the credibility we required. The idea evolved and we worked closely with our agency and production company Cineflix to put the meat on the bones and develop the idea.” 

The result was All Aboard: East Coast Trains, a series funded by Sky 1, which also had total editorial control.

The train operator’s marketing push included TV spots using Sky’s AdSmart platform to regionally target consumers along its route. The show reached 3.3 million adults, which had a media value of £4.9m, according to analysis by Repucom.

Two-thirds of viewers said the series improved their understanding of the brand and its services, and brand image scores across emotional and service quality metrics doubled. East Coast has seen a 63 per cent increase in brand preference and a 21 per cent rise in advanced bookings.

The results show branded content can create financial advantage, says Cowen, but a close working relationship is critical.

Q&A: Craig Inglis

Director, Marketing, John Lewis

Marketing Week (MW): How has the relationship you have with your media agency evolved over the past few years?

Craig Inglis (CI): The role of our agency has become increasingly strategic.

Media is much more complex and fragmented now and that provides us with endless opportunities to connect and engage with our customers. It is the role of our agency to understand and navigate us through those choices in a way that is creative, effective and, most importantly, true to the John Lewis brand.

In essence, it simplifies the complexity and identifies opportunities that can work for us across different channels, devices and platforms. To deliver this, Manning Gottlieb has to stay close to both our internal teams and our other agency partners to ensure that we are fully integrated.

MW: The number of products and services that media agencies offer today has increased dramatically. Where do they
add most value?

CI: They do offer more services now and we pick and choose them depending on our needs. They offer specialist services and they have the benefit of being able to integrate them together under one roof, but these services have to be best-in-class if we are going to use them.

We rely on the core team at Manning Gottlieb to pull in the right talent and skill from within the agency. At this moment in time, we are working with its content agency (Drum) and experiential team (Fuse) as well as its mobile strategy team. 

MW: To what extent do you think media agencies are now rivalling ad agencies in terms of creativity and innovation?

CI: They have always been creative and innovative but in different ways to ad agencies. To some degree the lines between them are blurring, which is why it is important that creative agencies and media agencies collaborate.

References

1. ^{^} see case study, below (www.marketingweek.co.uk)
2. ^{^} Marketing Week ’s Brand of the Year Marmite (www.marketingweek.co.uk)