SUMMARY: The media agency world, or at least its biggest players, received a vote of relative confidence from a major analyst group last week, when Forrester issued the latest iteration of its Forrester Wave report analyzing the biggest networks and shops. Not 24 hours later, another report from MediaSense in partnership with the World Federation of Advertisers delivered a cold reminder that media agencies need to figure out new forms of remuneration if they want to see their businesses grow — but even that report delivered an inkling of upside, citing marketers’ willingness and expectation to pay more for media agency services in the future.
The three hold cos that delivered the highest scores in the Wave report as “leaders” were, unsurprisingly, Omnicom (highest total score) and Publicis, since their recent earnings reports have put them ahead of the competition. The Forrester Wave report cited their ability to integrate data and intelligence into well-rounded media offerings, as well as their ability to deliver savings from principal media. Surprisingly, Dentsu also just landed at “leader” level, and was noted for its strategic strengths
Florian Adamski, CEO of Omnicom Media Group, was obviously happy with Omnicom’s position in the Wave report, but cited the fact that client feedback gave the media agency network high marks for trust and transparency was a bonus.
“That package of modern, cutting-edge capabilities and deeply trusted relationships in an industry that constantly is swirling about how trust has eroded between clients and agencies just makes me incredibly proud,” said Adamski.
The “Future of Media Remuneration” report highlighted the disconnect between marketers’ desire for greater accountability and major gaps in measurement and transparency, which are slowing their ability to find new, more outcomes-based forms of remuneration. More than four out of five respondents (84%) cited “lack of data and measurement between the advertiser and agency to measure outcomes” as a major barrier, while, 87% believe agencies are resistant to adopt models that require greater transparency in how they make money.
Adamski noted the risk associated with outcomes-based remuneration, and taking that risk is what can reposition agencies into a better light with clients. “It is an important strategic pivot from where we are now, where still there are a lot of clients that look at media agencies as partners that deliver a commodity — and if that is all, why would I not try to drive down the cost of that?” he said. “That is actually the most important message from this report. I believe there is a world out there where clients and agencies agree that what services agencies deliver have a distinct possibility of being a strategic growth driver, as opposed to doing something where an entire glut of competitors ultimately delivers the same thing over and over.”