Five years ago I found myself as an executive of an ad serving business in Europe, competing against the likes of Atlas and DoubleClick for mostly agency clients. The pitch was about delivery speed, reporting functionality and how quick you could traffic 30 placements with 20 creatives after a martini lunch. The agencies spoke our language and the brands did not, allowing the agencies to not only make a handsome profit from our technology (often $0.05 to $0.50 CPM above cost), but also to own the client’s data and the pixels on their site, making it hard for the client to move their account in the future.
Most clients failed to understand why that could become a problem, and most agencies failed to see how quickly it would change.
Roll the clock forward and the landscape has indeed changed. Now on the media supply side I work with both agencies and direct advertisers and we work with the ad servers that those clients tell us to (mostly Dart) - but in most of these situations, it is now the client that owns the technology license, not the agency.
The enablers of this change are the demystification of what ad serving is and the influx of cheap labor that understands how to use it. Ask most CMOs and they can tell you their ad server gives them independent reporting, view-thru measurement and campaign management, and that a low(er) cost resource manages it for them.
More importantly, ask the smart CMOs and they will tell you it gives them the power to switch agencies if and when they want to without losing historical data or needing to re-pixel their website. To this day Dart does not have a feature for porting a client out of one agency’s account into another’s, and probably with good reason.
(Of course it also helps that starting prices for Dart are down to $0.25 CPM, and will drop quick with some volume, and if you can’t afford the annual minimum investments, companies like AdSwerve will step in to give you access for a lower investment level. For the value, that’s a great deal.)
But ad serving is not the only aspect of digital marketing that CMOs are looking at bringing in house as they begin to question the three core value props the agencies have:
- Know what to buy to make the campaign successful
- Manage the buying and implementation processes
- Negotiate the best rates
The first point is critical – in my old agency team at
we had a dozen people who were primarily focused on points 2 and 3, allowing me to focus heavily on innovation and keeping us ahead of the game. Combine that with media planners who took many, many publisher meetings themselves, there was rarely a new tactic we did not know about. And this value was passed back to the clients in the form of better results, (and sometimes just a chance for them to be involved in something cool).
As for the second point, the industry is matured to the point where no brand needs to recreate the wheel in terms of processes – the resource that was being charged out at 3x salary a month ago is now on staff at the brand doing the exact same job!
And for the third point, well the world has changed significantly over the last 3 years. Whilst it remains true that some agencies hold guaranteed access to certain inventory sources at preferred rates, the percentage of media that is being bought through auction tools is rising sharply, and where an auction exists, so does ‘equal’ access (and therefore CPMs).
So if you are a marketer who feels you have the time and connections to stay in touch with this evolving industry, what are you really using your agency for?
Look out for future parts of this series:
Part Three: The Media Agency / Client Relationship - The Unrealistic Client
Part Four: The Media Agency / Client Relationship – Choosing The Right Agency for Added Value