TheONEThing

If you do one thing this week:

Arrange to meet with at least one of the media owners you spend a reasonable amount of money with. Use it not only as an opportunity to understand their business better but also to see if you have any similar business objectives.

Important
 Developments

• The Office of Fair trading has recommended that the CRR scheme is relaxed. The CRR mechanism currently protects advertisers from ITV1 abusing its dominant position in the UK TV ad market. It was introduced in 2003 when Carlton & Granada merged to create ITV plc as a way to compensate advertisers if ITV1's audience share dipped and since that time ITV have been complaining that it has harmed their business - advertisers do need some protection in this area though!
• The IAB in the UK have developed behavioural targeting guidelines for internet advertising in conjunction with the leading online companies, such as Google and Microsoft. Ofcom have also backed the best practice principals, which aim to "empower" consumers! This could deliver a great deal of value for advertisers, as they should be able to identify and reach specific types of consumer much more easily, but this type of self-regulation needs to work before more enforced regulation of internet advertising is put in place.
• ITV announces record losses of £2.6bn for 2008 and states that ad revenues are down 17% in the first quarter of 2009. Things are definitely in a bad way at Gray's Inn Road, but Channel 4 and five are also struggling. There could be big changes ahead in the structure of the TV media owners in the UK!

Are Agencies in the way?

By Tony Squires
 

It may be stating the obvious, but the ways in which Marketers have of reaching their potential consumers have changed monumentally since the first Ad agencies set themselves up the mid to late 1800's. The ad agencies were there initially to place ads in newspapers (the birth of media buying) and then grew in to providing content for advertisers (the birth of the creative or full-service agency).

Today, agencies are still focused on creating ads and placing the media. Admittedly, they have changed, or at least tried to change, to encompass every single form of communication channel that has come along over the last 150 years, but ultimately they still just make the ads and buy the space.

For some companies, that is exactly what they want them to do. But for some advertisers, and not necessarily just the big ones, more is needed.

Disintermediated?

Advertisers are continually looking to engage with potential consumers in whatever ways works best. The explosion of media channels and the companies that own them bring numerous ways to reach those ever-more elusive consumers, so would these media owners and the advertisers be able to work together to deliver mutual benefit to both parties? A number of high-profile companies seem to think so.

At the recent Association of National Advertisers annual conference in America a number of Chief Marketing Officers vented their displeasure with media agencies and acknowledged the growing role of media owners. Becky Saeger, the CMO of Charles Schwabb commented "If I were an agency, I would be really worried about being disintermediated. More and more, agencies are almost in the way sometimes" Other than using the word "disintermediated", she may have a valid point!

One interesting example is Hewlett-Packard. Gary Elliott, VP of corporate marketing at HP, is working with the likes of Time Warner "because they have relationships with customers and can build that quickly and immediately and give us feedback". Immediacy and customer feedback are not traits that traditional advertising and media agencies are known for!

It doesn't have to be digital!

It may be inevitable that digital media is towards the forefront of these developments. The likes of LinkedIn, Facebook and MySpace are all built around relationships that help deliver a better understanding of consumers for advertisers. They also provide speed and can deliver feedback from customers - although this can be a double-edged sword, as negative feedback can appear extremely quickly!

But it's not all digital-driven. FMCG advertisers have used the relationships that magazines have with their readers to help provide potential consumers with positive experiences of their brands. A good example of this is Clorox in the States. They teamed up with Meredith Corp., the publishing company, who ran a series of house parties with readers of their Better Homes and Gardens magazine, as part of the launch of a new range of cleaning products, which they claim helped to deliver a 10-fold increase in positive comments vs. typical product launches.
 

So should I fire my agency?

Well, no, but it is worth knowing that they are not the only ones to help you communicate with your consumers. Working with your marketing colleagues to understand where these direct relationships could prove beneficial would be a good first step, but there are a few things to bear in mind:

1. Understand the need - what broad business or specific marketing objective could this direct media owner relationship deliver on?
2. Understand the cost & expected return - fees for agencies are relatively simple, but paying a media owner for their ideas, access to their consumer relationships and ultimately developing an ongoing partnership where you both benefit is altogether a different thing.
3. Understand the time involved - don't underestimate the time required to develop a mutually beneficial partnership. It is not as easy as giving a rough brief to an agency and letting them do all the hard work for you!

 

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