How big data will transform media agencies
The next few years will see clients look to aggressively leverage the big data wave that is washing over all areas of business says Chris Walton, who argues the changes will see some prosper, others disappear and new data savvy entrants arrive in the market.
Of course you may well disagree that big data is going to have an impact. You may hate all the connotations the term forms in your mind or indeed the label itself (I can’t say I am a huge fan of the term Big Data, but for now it is a moniker that has stuck). If so, this article isn’t for you. And also good luck to you, because if you operate in media agency land and you do not recognise the impact Big Data will have on your business, you will need all the luck you can get.
As media agencies attempt to understand and adapt to the Big Data age, there are several factors that will be fascinating to see play out:
Clients will not need media agencies
Well done, Chris. A really thoughtful and informed piece.
One crucial thing I think you underestimate is the general lack of courage and, particularly, ability, of marketers in Australia. It may be the case in other countries, not sure. With a few high-profile exceptions (who I think are already moving down the paths you refer to), they do not have the vision nor the power within their organisations to pull this off.
The Nestle comment about having difficulty efficiently managing their agencies is a good one. Perhaps if they didn’t have such a ridiculous number of agencies (close to 20 I think) on roster, it might be a bit easier to form respectful, trusting, effective partnerships. And they’re not alone.
Data analytics and customer insights currently coming out of mainstream media agencies are of a mostly woeful standard. They’ve got a long way to go on that front. I don’t doubt some of them have some very capable people, but to be impactful across hundreds of millions of $ worth of business is a major resource challenge.
It would probably surprise (and perhaps terrify) some media agencies to know just how easily their creative agency friends can stretch into analytics, data insights and even things like online trading. And the capacity to directly and seamlessly effect messaging; somewhat owning the ‘effectiveness’ debate . After all, we’ve got the money. But what we don’t have are marketers capable of seeing beyond the current landscape. Not yet anyway. Just saying this is another left-fielder that could be a big part of the future marcomms landscape.
Well said Chris. Not sure that clients won’t need Media agencies per se but agree there is strong amount of repositioning and retraining required. In my humble opinion the current agency remuneration models are outdated and don’t factor in the amount of wasted time we invest for sake of a relationship which is already drifting further apart. A switch to performance incentives will help keep clients and their agencies focussed whilst looking for the best collaborations to deliver a combination of skillsets beyond the agency’s existing expertise.
interesting perspective. ‘agency’ models by design only work when the interests of both parties are aligned. they don’t appear to be in many instances now.
“Clients will be able to directly & dynamically engage their customers in on going dialogue…..”
I can’t wait to have engaging dialogue about frozen peas, stationary, milk, maybe even my local bottle shop. My what exciting times lie ahead. Pleeeez!
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Everybody keeps talking of big data — data has been around for yonks and has always has been modelled. So whats the diff now ? — a bigger machine ? better software ?, which we can ignore by the next question below.
It is a simple metric that tells all — otherwise it is a waste of time for all concerned in this tough market.
What is the ROI ?
For effort all that big expended on data ana lanalysis – it better be good; better than a clourful power point presentation Otherwise I am not interested.
This article is bang on. Lets face it, Media agencies cannot quantify the effectiveness (aka ROI) of what they deliver to clients. ROI = incremental lift in some behavioural measure as a result of media expenditure. Media agencies purport to be experts in connecting brands to consumers, but cannot actually demonstrate if or how they’ve delivered this.
Therefore, in an era of big data, slimmer budgets, greater pressure from CEOs to demonstrate ROI, the days of the traditional media agency making their profits from kickbacks/rebates are numbered – they’ll be required to demonstrate how they impact the bottom line.
The traditional media agency model is on borrowed time and redudancies are imminent. Reality is that they are ill prepared and ill equipped to meet the needs of today’s business world.
Fairfax, employ this man now
Almost without exception the media agencies I’ve dealt with recently still have an appalling understanding of even the most basic digital analytics (and in some cases basic maths). It doesn’t bode well for their futures …
Interesting. I think the future direction and purpose of media agencies is something clients will be increasingly focussing on. They are beginning to scratch their heads and ask themselves more questions about their agencies. Will action overcome apathy?
Great piece. Its about smarts not size.
great article!