Aurora Magazine

Promoting excellence in advertising

The changing role of media agencies in Pakistan

Published in Sep-Oct 2015

Will the looming threat of the big data companies wrong foot the media agencies?
Illustration by Creative Unit.
Illustration by Creative Unit.

As the media marketplace reinvents itself, traditional media agencies will have to keep evolving. Experts at understanding the changing face of their landscape, media agencies have over the last decade moved quickly to embrace both digital and social media. However, like every other marketing function, media agencies too will continue to face new challenges in adapting to a world where communication evolves dramatically and where paid media strategies have been replaced with a combination of paid, owned and earned media.

The fact that over the last seven years TV spend has overtaken print is due to the tremendous increase in the number of TV channels while the number of new print publications has not increased significantly. The internet is the only medium where advertising is growing exponentially, and this is because the base is small and the potential is huge.

Although spending wisely on TV is a top concern among clients, they cannot overlook the fact that TV ratings are shrinking due to increasing media fragmentation causing people to shift to other screens.

Media agencies need to be more agile (and transparent) in selecting the solutions within an integrated media space. They must be experts in technology, data and content planning along with creative and media.

Larger agencies offering a suite of services are able to bundle together the buying, planning, technological and creative sides of their business to give clients a better deal in an increasingly competitive landscape. In a traditional world, size mattered because this generally translated into more business volume, the logic being that greater clout means cheaper deals for brands, leading to yet more pitch wins and increased revenue for further acquisitions.

On the flipside, flexibility is antithetical to large sized traditional agencies as it conflicts with their ability to generate profits because they are burdened with a legacy business model. Large agencies have typically been in the business for decades. They are good at creating a certain set of deliverables, typically TV spots and standard banner ads. But the fact of the matter is that the industry has been disrupted by technology and agencies need to help clients shift from interruptive messages to immersive experiences.

An agency saddled with legacy skills, legacy expenses and a holding company that enforces a minimum net margin every quarter can have a difficult time generating and executing groundbreaking ideas. What is good for the client’s brand may not be good for the agency’s bottom line. As brand growth is increasingly driven by innovative approaches to marketing, many large agencies may increasingly provide solutions that run counter to the brand’s goals.

Small agencies tend to be newer and less beholden to the older ways of doing business. It may be just as challenging for small agencies to develop and execute ideas, but at least they are free from the constraints of a legacy system. They can focus on the needs of their clients rather than on their own short term net margin requirements. They can shift roles and deliverables based on the target audience and not on their internal business model.

Success for small agencies depends on their ability to leverage flexibility and develop fresh ideas.

Every team member must be an expert at his or her job and develop additional skills, depending upon the project; an account person may expand into social strategy, an art director may create information architecture, a tech lead may assist with content strategy. Every person is exposed to a broad array of tactics and learns when and how to use each tool to solve a range of client challenges. Every team member is focused on the goals of the client and not necessarily on his or her defined role – and this is critically important because marketing is being redefined every day. Flexibility is the key to success; every touch point, from retail to social media, provides an opportunity to expand the definition of advertising. And flexibility is wired into the DNA of very small agency from the start.

Furthermore, the evolving nature of media agencies will require them to allocate resources more efficiently across traditional, display, social and mobile platforms, while ensuring that all the dots connect to a single brand communication objective. The term ‘media agency’ no longer best describes the full diversity of their offering, which is why other terms, such as Marketing Investment Managers (MIMs), are being explored.

With their superior data mining and consumer insight management capabilities, there is an increasing fear in the industry that tech giants, like Google and Facebook will cut the agency out altogether and the continuous rise in their stock prices is a strong indicator that both creative and media agencies must challenge their own traditional roles. Global media agency networks, such as Publicis and WPP, have started to partner with Google, Facebook and even LinkedIn to develop exclusive proprietary media tools aimed at giving their network offices the ability to develop potent marketing solutions based on real time consumer insights, derived from online brand searches and consumer interactions. As a result, they will be able to develop more holistic brand strategies as well as allocate marketing resources effectively based on market research data coupled with real time consumer insights from brand engagement on Google and Facebook.

Furthermore, traditional media agencies are also facing new competition as technology consultancies, such as Accenture and IBM, offer executional platforms for digital ad campaigns along with their strategy consultancy businesses. In fact, some analysts consider them to be a greater threat to agency revenue than Google and Facebook. In this respect, size will help agencies deal better in a Google or Facebook dominant world.

To evolve and expand, media agencies will have to attract bright new talent experienced in delivering cross-channel, consumer-centric campaigns.

They will need mobile experts, social media leads, video specialists, data analysts, and software developers as well as traditional copywriters and media buyers. To keep pace, agencies will need to go even further; for example, digital teams and social teams should not operate in silos and agencies should be developing centralised marketing teams able to support a holistic strategy.

Media agencies will continue to play an important role for advertisers so long as they are able to reinvent the way in which they work. In an increasingly complex digital world, using data to become consumer focused, restructuring to reflect today’s ecosystem, and collaborating with other providers will enable them to deliver first rate integrated solutions that will add value to their clients’ businesses. The media agency has evolved – but it’s not done evolving yet.

Sohayb Anwar is Head of Planning, Adcom Zenith Optimedia.