Posts Tagged ‘Advertising agency’

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Since the rise of bid optimising / RTB there’s been more of an appetite for advertisers to seriously consider taking the digital media planning and buying function in-house, for many reasons whether cost savings or the function being closer to product.

Due to this, there’s been a shift in why and where people change jobs within the digital media industry.

Neil Middlemass’s recruitment consultancy ran a survey recently asking the burning key questions (below) to industry specialists resulting in the truth about moving in house being revealed.

The Headlines
Why does everyone want to move in-house?
Career
Do client-side roles pay more?
Will working client-side improve my career progression?
Is it easier to diversify your channel exposure in-house?
Are agency acquired skills valued higher than in-house skills?
What draws senior agency people in-house?
Hiring
What are the benefits of employing agency people into in-house roles?
Working Mechanics
Do you have more influence and control working in-house?
Is client-side work too far away from the action?
Is it easier to get campaigns signed off in-house?
Is it more difficult to stay up to date with the market in-house?
Lifestyle
Is the work/life balance better in-house?
How does the social life at work differ?
Where are in-house roles based?
Working Environment
How does the working culture differ in-house compared to agency?
Do you have to work harder at an agency?
How target-driven are in-house roles and how is success measured?
Are the offices more or less impressive client-side?
How big are in-house teams compared to agency side?
How much does the vertical the company works in affect the culture of the company?
Conclusions?
After speaking to everyone, what did I learn?

In house

Ad agencies have offered huge value for advertisers for decades and continue to do so. This will never change.

The key benefits of outsourcing the media planning and buying function to ad agencies include the likes of: global negotiating power, specialist contacts for sponsorship deals, cross client learnings, cross channel integration, deal with the hassle and admin and it’s someone for the CMO or CEO to blame if the business isn’t hitting key targets.

With programmatic buying (Paid Search, Social Media, Display RTB, Online Video, Mobile and Affiliates) becoming the bulk of digital Marketing, the majority of these benefits no longer applies therefore it doesn’t make sense and can be classed as lazy if a brand wasn’t to even consider taking all programmatic buying in-house.

Although rightfully CEO’s obsess about growth, also ‘wastage’ and efficiency across the business needs to be reviewed often.

Let’s look at the pros and cons for taking all programmatic buying in-house:
Pros

  • New digital media team would be sitting next to all other marketing areas eg. CRM, creative, content, web design, product managers.
  • Close to business KPI’s and budgets so they can be extremely reactive.
  • No hidden margins in bid platforms.
  • Can often get cheaper adserving and bid platform rates.
  • Team become specialists in the business sector / vertical.
  • 100% of time and focus will be given to the one client.
  • Learnings and data won’t be shared with other clients with no chance of leakage to competitors.
  • Can turn around new campaigns significantly quicker.
  • 24 hour contact.
  • Will always have the time to stay ahead of the game.
  • Work closely with the data team / in-house DMP optimising on real KPI’s such as revenue / LTV / ARPU.
  • Can openly recommend business requirements to CEO in order to get things done quickly and grow the business.
  • No hidden agendas – everyone aiming for the same goal.
  • Other internal departments can be educated about what role the media buy has on business goals.

Cons

  • Can take six months to recruit team, train grads and setup systems and data integrations.
  • Ad agency would have to make more effort to integrate offlline and online brand with internal programmatic team.
  • The CEO might ignore team recommendations of key requirements needed to improve marketing.
  • CMO would need to find someone who has +5 years experience in programmatic buying across all channels to head up the team and train the grads.

There are certainly plenty of pros and if you’re wondering how to kick things off, speak to some of the recruitment agencies below who will be able to provide an abundance off free advice:

Neil’ Recruitment

Digital Bubble

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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.