Media Agency Reorganization is Critical

The following is a guest post by Dan TrigubVP Business Development at Blue Bite.

A few weeks ago I had the pleasure of attending OMMA Global West 2011 in San Francisco. OMMA Global West is part of an annual conference and event series put on by MediaPost Communications, with a focus “on the user-generated disruptions that are forcing all media and marketing institutions to rethink and reorganize,” as stated by its official website.  Unlike most conferences, OMMA speaks to the media buyers and marketing institutions, arguably the most important audience of the mobile marketing ecosystem. One thing that we in the mobile space tend to forget, no matter how great our technology and value proposition, the media buyers and agency people often drive innovation and adoption through their checkbooks and budgets they control.  With that in mind, I came away from the conference confident that we as an industry have forced those with the checkbooks to rethink what media channels are important.  However, the major media agencies still need to reorganize for the mobile marketing industry to advance.

During the conference, I had the pleasure of attending a Q&A session featuring the CEO of one of the world’s largest full service media agencies.  The goal of the session was to discuss some of the latest tools and trends in mobile, social media, and other modern forms of communication that are important for media buyers and planners.  The thesis of the session was that media buying used to be straightforward (think traditional media – TV, Print and Radio) and a one-way affair where marketers pushed messages at consumers hoping that they would respond by buying their products.  Sitting in the audience I had the unique opportunity to see the mobile marketing industry through the eyes of one of the single biggest media buyers, a person that we in the mobile marketing space try to get in front of for a chance to showcase our mobile marketing solution.

During the session, I could not help but take advantage of this opportunity and propose a question to the speaker.  Providing some context for my question I said, “We [mobile marketing solutions providers] spend a lot of time meeting with agencies and media buyers such as yours, and a major challenge we face is that mobile, unlike traditional media (TV, Print & Radio), cannot perform to its true potential as a standalone solution.  We integrate our technology with other forms of media (digital, traditional, etc.) in order to bridge the mobile experience.  However, given how media agencies are structured today, it is very hard for them to buy media across multiple platforms. Today they work in very finite quadrants – whether just digital, out-of-home, online or mobile, and struggle to figure out which budget an integrated media buy should come from.  When we come in with an integrated solution, their heads begin to spin and they look at us as if we are aliens from another planet.”  I went on to ask what he recommends that we [and the mobile marketing industry as a whole] should do in order to overcome this challenge and successfully sell solutions across multiple platforms.  To my surprise, he looked at me and responded that he had no real answer and was frustrated about this very issue himself.  If the CEO of one of the largest media buying agencies does not have an answer, what are we to do? How are we to advance mobile marketing?

Reflecting upon the presenter’s response, it became clear to me that the major media buying agencies are structured (for better or for worse) in a fashion that makes it very hard for them to be innovative and drive change that is so critical to the Mobile Marketing industry.  The crux of the problem is that they have been organized into divisions to support traditional media channels. These divisions do not talk with one another – making a media buy across multiple platforms and budgets nearly impossible.  Likewise, these organizations continue to be focused solely on traditional media metrics such as impressions and CPM, and at times do not consider the quality or effectiveness of the interaction for brands they are hired to represent (caring more about the top-line metrics).  In an age of DVR technology, (according to Nielsen as of September 2010 DVR ownership stood at 38% of all US TV households) where many Americans barely watch a television commercial and spend most of their time consuming media out of the home – it seems like a waste of client money to be spending nearly all of it on TV advertising buys and yet it happens all the time. This is just one example of a weakness in traditional media in today’s world.

Recently MAGNAGLOBAL released its 2011 advertising forecast and the data was mind-boggling.  It shocked me that even though mobile and digital-out-of-home are predicted to be the highest growth segments of advertising, growing at a 20% and 15% CAGR respectively from 2011 to 2016, they are predicted to remain the smallest in real dollars, representing 1.2% and 0.9% of TOTAL advertising dollars by 2016, respectively.  To me, this is absolutely absurd, but can become reality if the major media buying agencies (one of the key drivers of these trends) fail to realize the importance of non-traditional media channels such as mobile and digital-out-of-home.

To be fair, it is certainly not all doom and gloom for the mobile advertising industry, but there are two key things that need to continue to happen.  First, and as the presenter at OMMA suggested in my one-on-one conversation with him after his session, the vendors of mobile advertising solutions need to continue to pound on the doors of and meet with key agency people.  It is our job to continue to show our value proposition and demonstrate success with quality case studies that demonstrate why brands need to reach their target demographic via mobile.  Likewise, it is important to continue to show the value of bridging other forms of media with mobile and therefore prove that the various media divisions cannot continue to operate as independent silos.  Unlike traditional media, it is important in today’s world to combine the media that people know and see every day with their most personal device – the mobile phone.  See my recent post on iMedia Communications to learn more.

Finally, in order to get the largest and most traditional agencies to change, the smaller more agile agencies need to continue to drive this very innovation and lead the charge.  One of the agencies leading this movement today is Chicago based Legacy Marketing Partners who also happens to be a partner of Blue Bite.  Legacy sees the importance of including a 360-degree approach to client campaigns and melds mobile, digital and social into one cohesive strategy that extends reach, measurement and budget.  Likewise, many of these innovative agencies are hiring cross-platform specialists who work across a number of formats including print, digital, mobile and online.

Barbara Maldonado is exactly this type of specialist for Legacy Marketing.  Barbara is Legacy’s Social Media + Mobile Strategist with more than twelve years work experience in digital, experiential, mobile and social media marketing for Fortune 500 brands.  It is Barbara’s job to focus on social media and digital engagement extensions of Legacy’s agency projects. Barbara notes, “As a member of the Creative team at Legacy, I work across many of the client projects and sit in the concepting meetings that yield the work that Legacy delivers for our clients.  I am tasked with not only staying apprised of evolving technology and building relationships with providers such as Blue Bite that can bring a great offering to our campaigns, but I also need to be able to communicate and educate agency staff on the capabilities of such emerging technologies.  By educating them on the technologies that seamlessly fit into their campaign concept, they can better communicate how digital and mobile extensions build the success of the program while confirming its effectiveness.”  Barbara goes on to say, “The agency you are working with may not be the digital or mobile Agency of Record, but educating them on how your technology can support their campaign’s objectives and understanding their role within these large programs, you will be able to build a stronger relationship between yourself and your agency prospects.”

When building a relationship with an agency, Barbara recommends providing case studies that are applicable to the agency’s capabilities and/or the category they are working with.  Oftentimes agencies will use those very case studies as points of reference to build support for technology integration.  Barbara also suggests to make sure to share your latest news and platform upgrades with your agency prospects as they are continually looking for ways to increase their program success and technology integration within all of the client programs – “educate them on how to make their programs smarter and measurable for their clients and you will definitely see the benefits,” Barbara adds.

Just like it took time for the major media agencies to see the value of online advertising, it will continue to take time for them to understand the value of mobile marketing.  I guarantee that when the first proponents of paid search or online video advertising sat in the offices of some of the world’s largest full service media agencies they were looked at like aliens from another planet.  However, we as an industry must continue to meet with the ones with the checkbooks, advocate the value of our services, and not be frustrated or discouraged by their old ways.  At the same time we must look to the first movers, like Legacy Marketing, to see the potential of the future and together drive the change and reorganization we so desperately need in the agency world.

About the Author

Dan joined Blue Bite as VP of Business Development in March 2009. Dan is responsible for business development, marketing, operations, finance, and corporate strategy.  Dan joins Blue Bite with over 6 years of early stage startup, finance and marketing experience. Most recently Dan held the title of investment banking Associate at GCA Savvian, a firm principally focused on providing M&A advisory and capital markets services globally in the digital media space among others. Previously he worked at Analysis Group, a leading financial, economic and strategy consulting firm in Washington, D.C.  Dan has a B.S. in Economics from Vassar College.

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