2010 – the year of consolidation


Right now I’m doing a lot of planning around 2010 for clients and I’ve had a lot of discussions around there being simply too many digital suppliers that do the same thing.

The solution. Cut back in areas that you can – do you really need to deal with 5 ad networks? Do you really need to deal with ten News sites? Or 10 sports sites? Or 15 ‘web 2.0/social networks’ … or 25 tiny magazine sites. Or 30 third party networks?

My answer. No, you don’t. And you don’t have to cop the sh*tty service many dish out and hide behind ‘it’s a new medium Ben, you’ve got to understand we’re all still making errors.’ Rubbish – it’s a 15 year old industry worth almost $2b dollars. Get your operation in order. Actually, all of us need to be more professional.

This year a lot of my thought and work has been around scaling right back on my suppliers and working with those that offer great service, ideas, understanding (real understanding) into their users and a commitment to more than putting their hands out for entitled money.

Less dealing with operators that skew their figures, make empty claims around their audience (“the most engaged”, “the most premium”, “the most elusive” blah blah) and fail to deliver even the basic elements of the contract.

And I am bloody wrapt to say, it’s paying off and 2010 is looking great in terms of partners. Service Level Agreements are becoming a reality as is a longer term view and working harder at things that really matter. I’ve worked out – you can’t be friends with everyone and you can’t keep spreading investment across every dude who is running a web business. It makes no sense and there’s no compelling reason or research to do it.

Anyway – I wrote this post about 6 months ago and thought it was worth revisiting. Enjoy!

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One issue that is commonly spoken about is how many resources marketers and agencies can handle in regards to suppliers.

It’s a valid question.

There’s web publishers. Ad Servers/Ad Technology. Mobile suppliers. In Game suppliers. SEO. SEM. Research and data.

There’s some claims that media agencies have 150 touchpoints alone when it comes to publishers or third party sales companies.

With digital the thing that makes it great and difficult at the same time is the huge amount of choice. An agencies role is to evaluate all options and come back to the client with the best way of investing their budget.

However with constant downward pressure on fees and resource you have to ask the question how long is this sustainable.

Can a planner look at 150 different options with diligence but also do it in a way that makes sense financially for the agency? This might take 80 head hours … but what if the client doesn’t want to pay for 80 head hours? Or what if the budget is small and the agency is on a commission percentage?

And can an agency come back with a final plan that has 25-35 suppliers on it and also manage this – delivery, optimisation, trafficking, negotiations, added value etc – in a way that means it’s not costing them money to adequately represent clients?

Automation isn’t the answer as almost everything is done manually.

Maybe an answer is looking at the companies that effectively sell the same properties/audiences etc and cutting back your preferred supplier list.

Or setting trading demands and rules of engagement around billing/trafficking/pricing upfront and consolidating efforts within these partners.

This post originally appeared on May 20, 2009.

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7 responses to “2010 – the year of consolidation

  1. A very thoughful post Ben. It also offers up a delicious irony.

    Maybe ‘old media’ are structured the way they are for a good reason – because it is simply the most efficient way of conducting an effective buy within that medium. Could it be that when ‘new media’ start to operate like ‘old media’ that the ‘non-search’ ad dollars really start to flow? I realise that is heresy that will probably have me burnt at the stake, but it may be worth thinking about.

  2. Hi Ben
    I sympathise with your problem and broadly agree with your views here – and I hope that MCN Connect is one of those ‘preferred suppliers’.
    I think that part of the difficulty for buyers in doing what you are doing is that the categories are so broad.
    If one just takes sport as a category, I would hope that Fox Sports would be on most buys. But beyond that, limiting the buy across the year to just two or three preferred sports sites could be difficult. What if you need integration with press or TV, can your preferred sports sites offer this? Do the preferred sites all offer video – and enough of it – if that is what your client is after? Perhaps in some campaigns you want to reach grass roots sports participants, but in others you want to reach people that view top flight, professional, sport sites. Maybe some advertisers want to specifically target NRL and others lawn bowls. Do your 2 or 3 preferred suppliers cover all these options?
    That is why I broadly agree with your principles here, but sympathise with the difficulties you guys face putting those principles into action when trying to buy the absolute best fit for each and every client.
    Perhaps the answer is an amalgam of a few preferred suppliers in each category, along with some other targeted sites on each campaign?

  3. Where have you been all my media life!? I’ve sat on the supplier side in sales and publishing across all media. Like any newby to online I was excited to soak in everything and learn the ways of the force. But, with over 12 years hard yards in other media under my belt, I realised “the emperor has no clothes!” Yes online is a pioneer of the digital galaxy but other mediums can claim a stake on their ground too! With that in mind, I’m excited about what makes online worthy to users and advertisers and I see some smart operators in online publishing coming out to lead the charge in 2010.

  4. talkingdigital

    John mate, I think you’re onto something. The barriers to entry ‘old media’ has (ie investing in broadcasting licences, printing presses) serves a very valuable purpose.

    I think too much choice scares advertisers. i think too much choice in anything probably scares most people! If a decision becomes too hard often you avoid making it.

  5. Rob, you will always have niche tactical elements of a plan. That won’t change. However the beige sites that trade on audience volume and not much else will struggle to differentiate themselves. Being the biggest doesn’t mean anything now … Or at least is a lot less relevant.

  6. Great post Ben. Also, now that the ABA have their web auditing service up and running it makes sense for us agencies to demand audited numbers as well as good service – surely that isn’t too much to ask?

  7. Pingback: The year of professionalism? - mUmBRELLA

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