With billions of dollars worth of media accounts up for grabs globally, questions are being asked as to why now and what kicked off the raft of worldwide reviews. The IAB’s US CEO and president, Randall Rothenberg reckons that it's a confluence of the rise of technology players eyeing off media business, the lack of technology investment from media agencies and clients finally getting fed up.
Speaking to AdNews while he was in Sydney, Rothenberg explained that while transitions are happening at media agencies, perhaps it is too hard to turn the corner.
Rothenberg said that clients are also wanting people handing their media business to have the same rigour as any other part of the business, such as financial and legal aspects arms of the business.
“Clients are finally, after all these years of being fed up, saying: “Okay we're fed up, we need our costs reduced dramatically, in the way that process automation supposedly allows us to be able to do.”
“We need a much higher level of service and capability and we expect the talent that's being applied to our billions of dollars worth of expenditure to be the equivalent to the talent that is brought on other professional areas,” he said.
Rothenberg explained that while he didn't want to “demean any agency or any agency executive”, but media agency businesses for decades have been labour intensive low skilled business with a handful of very smart people at the top.
“What I think the clients are saying is they want less low skilled hand delivered services and more automation and we want to be able to pay much better for far fewer very senior skilled consultants.
“That's a hard transition, and you see that transition happening at these agencies, and the question of these reviews is, is this a turning point – or is this just a side show?” He said.
The rise of technology businesses could also cause concern for media agencies, with Rothenberg saying that agencies need to shift to be able to compete with the likes of both tech firms and management consultants and he sees some concerns around if they can actually pull it off.
“Are they going to be able to change their structures and processes and talent and technology investments so that they can be competitive with the Googles and Goldman Sachs of the world? To be competitive with the Salesforce's and the Accenture's and the IBM's and the Adobe's, that are all making massive investments in technology and talent in order to take that strategy and procurement business away from those media agencies? That’s the question at a leadership level.”
What surprised Rothenberg most about Mediapalooza is that more “West Coast technology companies” weren't involved in the pitches.
“One of the things that surprised me about Mediapalooza is that more of these reviews didn't contain more alternative players,” he said. “You did see in the Coca-Cola review that OgilvyOne, a direct response/ digital/ creative agency was in a media review - that was interesting.
“I'd be shocked if IBM, Accenture, Adobe, Salesforce aren’t interested in that kind of business, so it stands to reason that you'll see companies like this in these media reviews going forward, it just hasn't happened yet.”
For more from AdNews' chat with Rothenberg – keep on eye out for the next issue of AdNews landing on desks this Friday (4 September). But before you get the new issue, have you caught up on all of the great current content? Never fear, you can get it right here.
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