Procter & Gamble has already announced this month that it plans to cut its agency roster by 50% by the end of 2018, and it comes amid new evidence that many other leading advertisers are poised to review their agency relationships.
According to The Drum, media consulting firm ID Comms has calculated that $10bn worth of media business is currently under review and it predicts 2018 may well compare with 2015 when a huge amount of business was put out to tender.
“Our market intelligence would indicate that 2018 will be an extremely busy and congested pitch market,” said David Indo, Chief Executive of ID Comms.
“Many brands have spent the last 18 months seriously considering their media agency requirements and getting their ‘own house’ in order prior to going to market,” he added.
Indo explained that brands have different motivations this year compared with 2015, when “immediate and bankable savings” were among their top priorities.
Now, advertisers are challenging their agencies about what measures they have put in place to deal with ad fraud, brand safety and the associated issues that have dominated debate in the industry since Pritchard’s hard-hitting speech.
“If 2015 was a race to the bottom, 2018 has the makings of a year where the challenge for the agencies will be who is best equipped to race to the top,” he said.
Although several major media groups have introduced measures to reassure their clients – for example, Publicis Groupe’s “Power of One” model or Havas Group’s “Client Trading Solution” tool – some industry practitioners believe there is more work to do.
“The winds of change for agency holding groups have been predicted for some time but the volume of big business being reviewed so early on combined with the simultaneous aggressive challenge from management consultancies was unexpected and will create nervousness from analysts,” said Paul Frampton, Chief Executive of Havas Media Group UK & Ireland until November 2017.
“Brands are demanding both a new strategic model and genuine transparency, but the bigger holding groups seem slow to provide either,” he added.
Sourced from The Drum; additional content by WARC staff