Digital agencies used to get paid for unpacking an incredibly complicated digital landscape for marketers. Faced with all kinds of new marketing opportunities, advertisers turned to savvy digital agencies to figure out where to spend their money, and how much of it to dedicate to display, mobile and social channels.
The dingy little secret was that the agencies didn't really plan much of anything. The way it worked was that agency planners would make an Excel template, create an RFP document, instruct the media owners to send back all kinds of creative ideas and fill out the media plan template. RFPs sent publisher teams spinning into action, churning out exciting-looking PowerPoints with screenshots and suggested spending levels.
Not much of this was scientific. Publishers often promised more inventory than could be delivered, knowing they would never get the full budget allocation. Agencies asked for various "budget levels," knowing they would allocate only $50,000 per publisher—but asking to see $200,000 plans to get a better sense of where CPMs might be negotiated.
The World is Changing
Sounds pretty lame, right? Sadly, a lot of media is still planned this way. But, thanks to all kinds of programmatic innovation, times are rapidly changing and digital agencies are going to have to find out how to change with it.
In the old paradigm, agencies largely provided value by dealing with the intricacies of negotiating with vendors, moving data from plans to ad servers and billing systems and keeping clients in the loop on how their digital media "investments" were performing. Optimization was largely defined as cancelling a bad deal and re-allocating budget into a better one.
Today's ad technology has given marketers and their agencies a lot more knobs and buttons to push. We are rapidly seeing a shift away from manual, Excel-based processes to nimble, web-based planning technology, driven by centralized data.
What Should Innovative Agencies Do?
Digital media agencies' legacy business models are expiring faster than a Madison Avenue parking meter. What should innovative agencies be doing to change and continue to provide real value to their clients?
- Planning: "Planning" is not planning anymore. It's investment management. Figure out how to measure beyond clicks and common CPA metrics and try to get inside your clients' real budget numbers. Are you gaining access to the client's P&L and first-party data so you can help them measure by more important metrics, such as net new customers?
- Teaching: Are you schooling your clients on nascent native mobile opportunities or the latest ways to leverage RTB video to enable branding at scale? Agencies need to stop collating others' ideas and start helping vendors translate their opportunities into the framework of the client's business.
- Doing: The manual, spreadsheet-driven world of "22-year-old media planners" where labor, rather than strategy, was at a premium are over. But in a programmatic world, execution is more important than ever. Agencies are perfectly positioned to be in the middle of dozens of systems, reconciling spending and performance against both long- and short-term client goals.
The irony of today is that a lot of systems are starting to make digital media planning less complicated from a transactional and workflow standpoint but the overall digital landscape is more complicated to navigate than ever. The digital media agencies that survive must change the way they plan, teach their clients and execute in order to survive and thrive.