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Restoring trust in client-agency relationships

Opinion, 21 April 2017
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Recent issues around media transparency, fake ads and brand safety issues have put a strain on client-agency relationships. At the recent Guardian Changing Media Summit, Nick Baughan, CEO, Maxus UK, acknowledged the problem, observing that there is a "massive asymmetry of knowledge and practice between agencies and clients". Marketers need to demand more value and "more clients need more chief media officers", he said.

During the same panel session, Gary Bramall, CMO, mytaxi, the cab hailing app (formerly known as Hailo) agreed that there is "blame on both sides of the fence". The industry is "in between a spectrum of greed and negligence", he observed. And while some agencies are operating in a "smoke and mirrors" or "black art" kind of manner, it's also the case that some marketers are not up to the job – some are "incapable of running a P&L". This debate is actually "an opportunity to improve the quality of clients", he declared.

Jenny Biggam, CEO at The 7 Stars, outlined how the independent media agency, launched in 2005, was set up with a "vision of complete transparency". Its only income is from its clients' money and most of that is fees, she said. "The advertiser knows who is working on the business and what they're paying for." Otherwise, there is "an inevitable compromise" if an agency is making money from its client as well as the trading companies.

But agencies may have other things to worry about if the vision of another panellist comes to pass: artificial intelligence (AI) and machine learning (ML) will replace traditional media agencies, according to Carl Erik Kjaersgaard, CEO & co-founder, Blackwood Seven A/S, a consultant company that uses these technologies to predict and achieve optimal effects from paid media.

Kjaersgaard has observed "a new generation of CMO", who are no longer from business school backgrounds. Rather, "the new breed are former engineers, or from a data or technology backgrounds", he said.

"More and more management consultancies are moving into our industry now", he added. Indeed, Accenture, the management consultancy, has recently announced it is helping clients set up their own in-house digital media-buying capabilities. And these developments are "moving very, very fast" with management consultancies having access to new tools and new methods that make the media buying process much more efficient.

AI and ML means the whole media process has been cut from nine weeks (typical timeline for a traditional media agency), he said, to nine seconds. Further, clients can view platforms in real-time, they can see results on a daily, weekly, even hourly basis. "[Media buying] will be taken over by tech" he stated; and within three to five years "half of the media people will have to look for new jobs".

Baughan countered that, at the end of the day, media agencies are "a service business" which "look after all parts of the customer journey". Media agencies do not provide mere data, rather they offer strategic advice and creative service: agencies "need to be more than a conduit", he said. For this reason, Maxus, owned by WPP and part of GroupM, has had nearly $1 billion of investment over the last ten years. We are "dealing with a dual economy" , he said, where everything is traded, measured and consumed differently.

Biggam conceded if she was setting up an agency today, her approach would be closer to Kjaersgaard's tech-driven model. At the moment, The 7 Stars, like most media agencies, has "a level of tech and data people, but they are dominated by people who handle comms and strategy" – a ratio that should probably be reversed. But, she added, a tech-dominant model led by algorithms that are only concerned about the lower cost per sale means "you lose the creativity and value agencies can bring to advertisers". The value of creativity, insights and human interpretation should not be dismissed, she insisted.

"Human contact is something we humans yearn for," Bramall agreed. And while technology will "play a role" it will not lead to extinction. The future agency "will be much more nuanced and blended", he said.

About the author

Lena Roland is Commissioning editor for Best Practice at WARC. Previously, she has held marketing intelligence roles at the IPA and DDB UK.

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