The Year Of Agency Flux

mn_LK"Marketer's Note" is a regular column informing marketers about the rapidly evolving, digital marketing technology ecosystem. This week it is written by Lizzie Komar, Associate Analyst, AdExchanger Research.  

Last week, during an on-stage conversation at AdExchanger’s Programmatic I/O event in San Francisco, Omnicom Digital (OMD) chief Jonathan Nelson described the agency’s evolving approach to technology, data, partnerships, transparency, and service.

His comments illustrated both the plight and opportunity for agencies in today’s digital advertising world: The rise of automated buying, coupled with marketers’ desires to nurture, protect and leverage their first party data, has forced media agencies (and consequently, their holding companies) to redefine themselves to remain a valuable part of our ecosystem.

Nelson discussed the agency’s decision to partner with best of breed technologies as opposed to build or buy them, as he sees more value for the agency through partnerships. To this end, he’s forged strong bonds with Facebook’s Atlas, Google, Salesforce.com and data management platform Neustar. This more open model, which relies on the technological heavy lifting of third parties, should appeal to marketers who want more transparency from their agencies, more involvement in the day-to-day operations of their media-buying and perhaps more flexibility on technology product selection.

During the session it occurred to me how different Omnicom’s approach is from that of WPP Group, a comparably sized business with some overlapping capabilities. During AdExchanger’s Industry Preview event in January 2015, Brian Lesser, the CEO of WPP-owned programmatic platform Xaxis, addressed similar issues.

In contrast to Omnicom, WPP is a voracious buyer of ad technology. The company has plucked a number of ad technology companies over the years, including 24/7 Media, performance marketing firm ActionX, semantic ad tech company Crystal Semantics, and Dutch ad network BannerConnect. In addition, Xaxis threw some $25 million at developing a data management platform, and WPP last year took a $25 million stake in ad technology and exchange provider AppNexus. The company clearly wants the technology in house, which gives it a lot of autonomy – around pricing, the use of the data generated on clients' behalf, and provided services.

I’ve heard the year of 2015 called “the year of first party data,” “the year of cross device,” and yes, of course, “the year of mobile.” While it’s a year during which all of those things will be important, it’s also a year of agency uncertainty. In this year, marketers are beginning to question the role of agencies, agencies are defending themselves, and long-standing agency/marketer relationships could break simply because of disagreement over the role of the agency and the marketer in this increasingly mainstream programmatic way of doing business.

So, marketers –as you consider the role of your media agency, make sure you understand the pros and cons to each agency’s approach to technology and make sure it's aligned with what you want and need. As agencies are forced to evolve, it’s your job to make sure you’re on-board with the unique path they’ve decided to take.

Follow Lizzie Komar (@LizzieKomar) and AdExchanger Research (AdExchangerRsch) on Twitter. 

 

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