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THE MEDIA SEP 2018 e-book

MEDIA AGENCY Alarms soundinG for media agencies A recent survey of multinational marketers revealed startlingly high levels of dissatisfaction with their current agency roster arrangements, and brands around the world have initiated media agency reviews. BRITTA REID asks South African agencies their views on what’s going on. Headlines in the international marketing press are sounding alarm bells about the future of media agencies. They speak of media shops facing identity crises. They warn that agencies might follow the dinosaurs if they do not tackle transparency. They announce that clients are creating their own hybrid media models, taking elements of their business in-house. They caution that consulting firms are now a serious alternative in the eyes of advertisers. The survey results are not surprising, with multinational marketers scoring their current agency roster arrangements at 5.7 out of 10. (Source: The Future of Agency Rosters by the World Federation of Advertisers and strategic partner The Observatory International). Agencies were even more downbeat in their view of the arrangements, scoring them at 5.2. Media agencies are but one of the disciplines in the spectrum of marketing services, which face the underlying paradox highlighted by the survey: six out of 10 clients indicated they were looking to reduce the number of agencies they worked with, but five out of 10 claimed to be intending to increase the number of specialists they use. Specialisation has been the focus of the network agencies. Besides identifying new markets as strategic priorities for growth, the WPP 2017 Annual Report highlighted the importance of new media and technology, data and content. It is not alone in developing these areas of specialisation; Omnicom, IPG, Publicis Groupe, and the Dentsu Aegis Network have similar focuses. Moving from the global level to a local one, media agency heads also share a similar view of the threats they face. Chris Botha, group managing director of Park Advertising, part of IPG Mediabrands, believes “there are two big threats on everyone’s lips: one being the dangerous duopoly of Facebook and Google, and the other being the consultants (PricewaterhouseCoopers, Accenture, Deloitte and the like).” Josh Dovey, CEO of Africa for Omnicom Media Group, South Africa, concurs on the tech company threat, and also mentions programmatic advertising, an area where the consultants are investing. Also wary of the latter is Anne Dearnaley, CEO of PHD South Africa, who points to “transparency as an ongoing threat to the entire industry”. She acknowledges that the advertising and media industry has and is undergoing profound change – “the whole ecosystem is in a pretty tricky place right now”. Ana Carrapichano, founder and CEO of homegrown Mediology, agrees on the issue of transparency. This has “led marketers to cut out the agencies and deal directly with the media owners”. In addition, she sees automation as another big threat, “With AI and machine learning becoming more and more prevalent, the ability to produce results without human capital P 22 The Media | wagthedog.co.za Federico De Nardis “There are two big threats on everyone’s lips: one being the dangerous duopoly of Facebook and Google, and the other being the consultants (PWC , Accenture, Deloitt e and the like).”


THE MEDIA SEP 2018 e-book
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