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It’s been rough sledding for agencies since the 2008 recession. Client cost cutting, the rise of procurement, loss of trust and growing competition from platforms have led to a persistent, low-growth environment where it’s hard to innovate.
This week on AdExchanger Talks, 4A’s CEO Marla Kaplowitz addresses those challenges and some options to overcome them.
Prior to the rise of platforms, she says, “It was a very simple marketplace. You didn’t have the kind of fragmentation [we see now] on the agency side as well as the media landscape. It was much easier to drive partnerships with clients.”
The good news: There are new models available that were previously unthinkable, such as performance-based compensation, advanced data services and programmatic models that agencies want to try.
“You look at the programmatic landscape and there is so much work to do. Agencies just want to be treated fairly,” Kaplowitz says.
But it’s been hard to turn the page in the wake of the Association of National Advertisers’ 2016 transparency report. To the chagrin of agencies, the ANA continues to hammer the issue of agency rebates, even as its constituents emphasize the need to move on. As recently as October, the ANA hosted a transparency event in Manhattan highlighting the issue.
“It’s serving a purpose which is to create distrust,” Kaplowitz says of the continued focus. “If you keep putting out there that there may be these shady rebates … it does create doubt. When you’re having contractual negotiations, who’s benefiting from that? The client who has the leverage in terms of what they’re asking for. It serves an agenda.”
