Don’t confuse strategy with access to a self-serve platform

Don’t confuse strategy with access to a self-serve platform

Direct-to-consumer and digital-first brands are turning to TV, while tech giants are hiring agency talent. As the media ecosystem changes, advertisers can’t afford to engage with agencies without a well-defined strategy

Structural challenges are are increasing all over commercial media.

Procurement pressures and the wildfire rumours throughout boardrooms of lower cost-per-acquisition (CPA) channels are driving short term-buying. Meanwhile, client-side decisions are further squeezing the agencies and operating companies.

While WPP’s recent interim results point to growth, it’s notable how topline success was attributed to the acceleration of “digital” selling.

“The like-for-like revenue less pass-through costs growth rate of 19.3% in the second quarter is our highest on record, as clients reinvest in marketing, particularly in digital media, ecommerce and marketing technology”, the company proclaims.

Is this not a red flag?

Given the Darwinian ROI climate of ad investment in the past 18 months, shouldn’t the larger networks be worried about the longer term?

Pretty much all the main direct-to-consumer players have grown through performance media first. And established brands went relatively quiet in the pandemic and mirrored with similar behaviours.

Digital-first activity and ruthless “growth hacking” of the customer journey has been the DTC companies’ wheelhouse. Hence their penchant for controlling acquisition costs, and planning/buying where there is the immediate measurability and CPA control (cue Facebook, Google and any ‘self serve’ channel).

The ease of self-serve on the tech giant platforms has lent itself to smart and efficient growth in these businesses.

The ongoing challenge for companies like WPP is how do the bigger agencies showcase their value, and command greater project fees and full-time employee scopes for biddable actions which, often, can be delivered in-house by the advertiser?

In the right guise, intermediation is a great thing. The privilege of being able to tap into scale savings, particularly from above-the-line and mass reach campaigns, makes trading sense and has obvious efficiency gains. Even my own consultancy turns to an independent media investment arm to buy and activate its traditional media campaigns (properly planned first, of course!)

But “digital channels” are a different beast – where a pound is a pound regardless of whether the button presser works for an agency or not.

The importance of strategy

It is now increasingly important to redefine the agency opportunity and relationship.

With larger brands and agencies in particular, I am regularly seeing three inherent divides in their setup:

  • A division between traditional and digital media
  • A division between comms and performance teams
  • A division between strategy and activation.

Are these divisions really there because it’s best for the advertiser? Shouldn’t brands prefer alignment in these areas, or at least the right horse for the right course?

It depends on whether there is a good and solid strategy in place. One that is easy to understand, is actionable, and aligns all stakeholders (across these divides) towards the advertiser’s priority business goal (usually sales growth).

But the delivery mechanism of this strategy can only be delivered by effective and experienced human planners.

Advertisers should not not confuse access to a login on a self-serve platform with a strategy (useful data points aside).

And here we get to the agencies’ ‘unfair’ advantage: there are literally hundreds of media planners working across agencies every day. Agencies are also where the learning and the adoption of the less ‘performance-focussed’ channels can be adopted.

I have seen some exceptional outputs from the big established players. My old colleagues at Essence are adapting to evolved major client needs and impressing with their consulting division. For example they truly embraced the hybrid team with the digital lab for the L’Oreal business, a dedicated in-house and agency talent mix.

Tapping into Group M’s marketplace of economy of scale, ATL trading agreements mean that brand ads (notably in traditional ATL channels) can be bought efficiently.

However, Amazon, Facebook and Google have a straight-line strategy to Tier 1 and Tier 2 advertisers.

Enter stage left Reddit, which is aggressively moving into Europe and targeting large and mid-market customers as well as a secondary focus on agency holding groups. Meanwhile, Yahoo’s new breakaway from Verizon will likely light a fire under their direct sales strategy.

It’s no surprise that these digital platforms are raiding agencies for talent – only this week Snap hired an IPG strategy chief to head their comms planning in EMEA.

But do not let the tail wag the dog. Each of these platforms will have the delivery mechanism, investment and talent to deliver a cogent marketing strategy.

And be careful. The Google Manager will likely recommend YouTube for Brand Growth with a DV360 retarget, the Facebook rep will discuss creation of Reels. Keep the cynical hat on;  their planning will be (dare I say) ever so slightly biased towards their owned properties.

Plan, tap into scale and embrace digital talent

Whatever your views on media, your agency relationship or intermediation level, your strategy needs to ensure agencies are held to account and their talent is properly positioned to deliver for your advertiser needs.

This boils down to three things which are not a panacea but a solid start:

  1. Strategy and planning rigour – devised between advertiser and agency – that all can buy into each side, and easily implemented agency/consultant side.
  2. To activate, tap into economies of scale in ATL buys e.g. OOH/TV/Radio and the trading benefits, with an eye on the data points
  3. Digital talent should be able to execute/implement and understand data/systems from creative management platforms to ads managers.

This is underpinned by something a top UK retail CMO shared with me the other day, about CMOs also needing to be CFOs/CTOs/CFOs/CPOs and, if all that wasn’t enough, to market internally within their organisations, too.

This means it will be increasingly important for agencies to get the ear of an educated procurement team.

It will also be increasingly important to have a number of department stakeholders who are cognisant of the challenges of holding data and what it means, and how to activate effectively.

And it will be ever more vital for brands to enable people, team and talent recruitment to really drill down into whatdigital skills are available. Alongside the agency or consultancy, they will need to sell the importance of joined up-thinking to futureproof agencies and to extract maximum value from the tech giants.

Of course it isn’t easy and there is no silver bullet. But by using your strategic talents available to devise the what, when and why – and leave the how to the digital bidders and the scale broadcast teams – you should have a good chance of getting a truly future-facing agency relationship.

Simon Akers is a marketing consultant and media strategist, and founder of Archmon, a performance and growth marketing consultancy


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