There’s no secret media agencies right now want to be in a lot of businesses that aren’t strictly media related.
I guess the term ‘media’ means so much now that it kinda has lost most of its meaning, and media agencies have been broadening out the service they offer beyond straight media buying for the best part of the last decade.
The last few years have seen media agencies starting to eat into the traditional domain of the creative agencies – ideas, planning and creation.
The next few years could see them starting to move more into the media vendor side of things.
Over the past 18 or so months many media agencies overseas have set up their own ad networks using various exchanges and technology. So, instead of buying off external ad networks (think Adconion, DrivePM, Google) they compete against them on the ad exchanges and then sell this inventory back to their own clients.
It’s a bit weird when you think about it – media agency is paid by client to offer independent, impartial, channel agnostic advice to clients … but then has its own ad network to sell. On the flipside, they are probably in a position where there could be a cost benefit (not to mention a transparency one) for their clients. No one should better know the audience of a marketer than their agency.
Coming from a media agency background, I understand why this is appealing. From a media vendor position, I think it’s about to get a bit complicated.
The end game of these networks is to increase the pool of ‘relevant’ inventory and ultimately drive costs down for advertisers. What is happening now is agencies are interested in speaking with publishers about re-targeting their users elsewhere on the Internet.
An example – an advertiser may be interested in someone with a passion around music and the latest releases. The Hype Machine is a site that has these sorts of people – so an agency may come to us and want to ‘re-target’ these users across their owned network. So when this user leaves The Hype Machine they are targeted across the rest of the Internet within a pre-defined time window (14 days, 30 days etc).
The idea is the networks create profiles around higher value consumers and use their networks to reach them in other areas across the Internet.
Here’s where it gets interesting.
For a media vendor, their audience and their context is the most valuable thing they have. Will they open up the gates and allow a third party network in to access all their users and reach them elsewhere for cheaper?
AND … wouldn’t it just be easier to reach these people on the site they are on? If you want someone passionate about music and new tunes, why not just reach them on the Hype Machine and other similar music sites. ie – why not just rely on context and not technology?
As someone media vendor side the first thing I think about when these sorts of things are proposed is the cost to the business. In an industry defined by an almost crippling abundance of inventory why would I add more to the pile and potentially remove the reason advertisers turned to our portfolio of sites.
The second thing I think about is the user – how would a loyal user of a Sound Alliance site feel if I was selling them off to the highest bidder through a complex web of external networks and exchanges?
Third, there’s an uncomfortable feeling around the repercussions if you don’t co-operate. Will it result in a negative to the business? Will we lose campaigns? Do we have to play ball given the space we’re in?
The next 12 months around this space will be interesting to watch and be a part of as the issues around consumer buy-in and vendor buy-in are compliated and intricate. The ad market online in AU is super competitive and it could end up that saying no to an advertiser that wants to tag and retarget could mean a loss of revenue.
It’s also going to be interesting as the concept of retargeting/following becomes more topical with the media and privacy advocates.
And could we see media vendors become media advisors to clients – given the media vendors have the inventory, the technology and the real-time insights … all things the media agencies rely heavily on others to provide. Might media vendors go direct to clients with their own audience profiling, insights, branded content and platform and avoid the agencies? For a Sound Alliance this would be difficult, but for a Google it’s not the dumbest idea.
It’s just another layer to add to the increasingly complex world of media.