The ad agency role has changed

Posted: Jun 25, 2013 in Agencies, Business
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A traditional way an ad agency generated revenue was through a variety of ways such as agency fee, adserving mark up, bid platform fee mark up and preferred partner trading deal kickbacks.

With more and more channels becoming programmatic led where negotiating doesn’t come into it and clients rightfully continue to be protective over their data, ad agencies are finding it increasingly difficult to stop revenue declining.

It’s becoming more popular for brands to include ad data into their existing DMP keeping the data in house and secure, take control of the adserving and bid platform contracts for further transparency and handle all biddable media / programmatic buying in house (paid search, desktop and mobile display (incl. RMTG), Facebook, Twitter, video / VOD….) allowing the brand to react quickly to ROI data and innovative new media options keeping them ahead of the game.

So this leaves a big hole in many traditional ad agency wallets meaning they’ll have to adapt to meet the current demands of brands. So what will the focus be on over the coming years for them:

  • Offline planning and buying will always be an essential part of an ad agency even as offline including TV transitions over to programmatic buying
  • Large sponsorships will also need global negotiating power so although there will be certain levels of kickbacks, ad agencies will always get a far superior deal than a brand
  • Consultation – although many digital agency specialists will move over to client direct, there will be a need across certain brands for support in setting up custom attribution models internally, econometrics and business development (whether it’s advising the CEO to focus on app development, building out their DMP for more insightful data or improving their in house trading desk) all of which would be priced accordingly.

Ad agencies will always be there to support brands whatever their needs, but in future it will be in a more transparent way.

Comments
  1. Small bits of content that explains in details & help me understand about it,Thanks.

    Like

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