Media agency as media vendor … or media vendor as media agency?

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.


12 responses to “Media agency as media vendor … or media vendor as media agency?

  1. Creative or website retargeting isn’t new mate – what is new is the ability to do so within exchanges, so as to do it with supposedly minimal wastage.
    There are no really massive players in the exchanges (at least in this market) so it’s not surprising that media agencies (particularly the global ones) are rushing to fill the void, it still fits in with the ethos of ‘saving the client money.’
    This more complete service offering isn’t just for agencies though – more publishers have creative arms, and more of them are becoming more savvy at going direct – and if they do it well who can blame them?
    It’s just indicative of a crowded market with too many players vying for too little money

  2. Great article Ben and I agree with your thinking. Impartiality should be a given in the relationship – the media agency’s recommendations to their clients should be what’s best for the client. A captive relevant audience that meets the objectives is what the sites are selling – seems so simple….yet complexity grows.

  3. i know creative/site retargeting isn’t a new thing Les … it’s moreso that agencies now want to own that data (or co-own) and retarget specific users of certain media properties. some even want to revshare.

    for me it feels really blurry. as you rightly point out – the whole ecosystem is getting blurry (media as creative, creative as media, agency as media, media as agency) and that is probably why everyone is giving everything a crack. it seems right now being really excellent at one thing isn’t enough, you have to be competent at many things.

  4. Yes I agree, it will be interesting if/ when agencies insist on owning all the data – what does this mean for the networks in particular?
    What I find even more interesting is if these large groups share this data across their gamut of agencies – not only will this be greeted with enthusiasm from their clients, but will it work with all the politics inherent in these large groups?

  5. Les you raise some very juicy points. I am always curious at just how the networks get their data … and how transparent it all is. ie – if a site is running remnant via network x on their high end business property, is network x then retargeting these high net worth people across their cheap and cheerful exchange stuff? same with advertiser site retargeting … if advertiser y engaged network x to retarget prospective home loan customers, does network x use this data to sell onto other advertisers?

    can site x start retargeting users of theirs that click on an auto ad (let’s say for car brand z) to competing auto clients? how are these profiles made up and how is the data compiled? and who has granted permission for this?

    Les these are questions that undoubtedly keep both of us up during the evening.

  6. I haven’t slept in weeks

  7. Hi Ben, Is the hype machine ABA audited?

  8. hi alex – not yet no but it will be happening (we don’t own the property, we have exclusive comm. rights in AU). the site doesn’t practice auto refresh so there’s no inflated inventory which is the main issue.

  9. Thats interesting Ben.

    I assume you could put Hype Machine into the “smaller site” category. In which you talk about in this article:

    You seem to state in this article that for smaller sites its not just about auto-refresh, but much more than that. That the main issue is not just auto-refresh. Is hype machine visible in Nielsen? OR do we have a bit of double standards happening?

  10. talkingdigital

    Hi Alex,

    To answer your points

    – would i put into the smaller site category?
    I’m not sure – AU only it does just under 100 UBs and over 1m PIs. Is that small? Compared to some of the 18-29 sites who aren’t in Nielsen and reporting GA figures it’s a lot larger than most of the sites who like to claim they are genuine competitors to Sound Alliance properties.

    – re auditing.
    Like I said before, we have had hypem for just over 4 months – it hasn’t been audited, yet … but we are working on it.

    – re Neilsen for
    Well … I assume you don’t have Nielsen as hypem is on Market Intelligence and reporting accurate numbers. it has been since May when we secured local rights.

    – double standards?
    No. I can’t see how that is the case.

    My issue in the post you refer to is around Auto Refresh, Google Analytics numbers and multiple ads per page. Hypem does neither – it’s on Nielsen and has 3 ads per page. We don’t target AU ads to O/S IP either. To be honest I can’t see what you’re getting at.

    This back and forth is irrelevant to this post so please email me direct if you have any more questions, happy to address those I can. bshepherd at thesoundalliance dot net

  11. Is it “just under 100k UB’s” or 70K like you say in this post?

    In my book, 70K is a good deal less than 100k.

    Seeing you are all about accuracy and transparency around numbers I thought I would check?

  12. talkingdigital

    “Tom” (Alex or whatever you’re calling yourself today) … it is whatever it says in Nielsen. look it up. In your book I assume 70k is 30k less than 100k which I’d say is correct. Can I get a copy of your book so I know to ensure I stick to its fundamental rules just in case. I am sure it’s awesome.

    I am concerned about accuracy and transparency – that is why our sites are on nielsen. most of the sites that compare themselves with SA aren’t … that’s my point.

    Any other questions for me or are you done for the time being? Maybe send me a big list of all the burning issues you have around the Internet and I can get cracking. Like I said I’m happy to address these via email and my address is below. But I assume the answer isn’t the point ….

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