Once upon a time, media agencies reigned over “shrimp and champagne” gatherings studded with celebrities. But by 2018, 78 percent of the members of the National Advertisers’ Association had a kind of internal organization. As streaming platforms are gradually providing more productive alternatives to long-term, traditional television sales, they also increase the data value and leverage of the content.
Maybe the COVID-19 pandemic will allow advertising agencies time to reposition and reclaim traction with their value propositions. Advertisers will, meanwhile, be smart to brace for a modern world of post-agency. We’ve listed six primary takeaways at Kearney.
1.Digital-first
Digital commercials have arrived. For instance, 43% of its 2016 advertising dollars were spent on digital by one consumer packaged goods (CPG) business we collaborated with. That number hit 85%, a compound annual growth rate (CAGR) of over 20% in 2020.
One conventional power of agencies was that they were granted control by huge volumes. But mostly, digital formats are biddable, which limits the gain.
2.The DisinterMEDIAtion
Purchasing digital media is complicated and transparent. It is packed with intermediaries, including automatic marketer purchase programs called demand-side platforms (DSP), supply-side platforms (SSP, which does the same for publishers), bid-shading apps to guarantee that you do not overpay in an auction, brand protection targeting apps that protect your image by keeping your advertisements away from controversial content, and providers of audience data.
3.Data is supreme
CPG businesses currently need to have the opportunity to interpret customer trends and feedback as closely as possible in real-time.
In data processing and insights, your strategic edge relies on your efficacy and agility. Since this remains an ecosystem, it is a challenge. Third-party data vendors support you with macro industry dynamics, comparative assessments, and benchmarks and analytics that cover topics such as audience segmentation, measurement of lifetime value, social listening, and loyalty with consumers. Yet these insights are so important that rather than outsourcing to an organization, they are worth owning.
4.Break the internal silos
Too many, in silos, marketing and e-commerce departments work. As described in conventional media terminology, marketing tests effectiveness through recognition. Immediate profit and loss (P&L) consequence is measured by e-commerce. We also heard one e-commerce executive suggest, “Don’t let Marketing get their hands on my marketing budget.”, in the corresponding dispute.
In the past, the two teams had the luxury of a peacekeeper played by an external entity. The organization recognized that knowledge and e-commerce revenues were rapidly integrated. You accept responsibility for carrying out a good agreement to that end as you bring ads in-house.
5.Keep investments vivid
A specific budget for ads allows a brand to invest all its budget. Whether calculated in cost per thousand impressions (CPM) or total strategic marketing and e-commerce targets, it ignores the effect.
Media funding is linked to outcomes and policy by a diverse investment model. Only after they produce profitable revenues can investments go on.
6.Monitoring and speed
Today, the distinction between winners and losers is determined by pace and power. You will no longer gather thousands of individuals to construct a theoretical approach that takes weeks to adapt and modify. You need to be flexible, close to the details, and assisted by an organization that can pivot and spend where it makes sense in real-time.
A two-way street is today’s advertising: it doesn’t just broadcast the brand; it also produces knowledge. As a corporation, you need to own all that produces data.
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