Xaxis

End of Days.

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End of DaysThe leading advertiser organization in the world – the ANA — just issued a 58-page report accusing its ad agency “partners” of everything from shady buying practices to kickbacks to conflict of interest.  The ad agencies’ own trade group – the 4As – has naturally cried foul, arguing that they should have been fully involved in the investigation all along (not unlike having the defense team sit on a grand jury).  But the whole food fight about whether the report was fair or accurate or should have named names just distracts us from the big truth at its core:  The entire premise of the media agency has timed out.

It’s being argued by agency defenders that the ANA’s motive is money and control;  that advertisers are trying to squeeze even more blood from the empty stone of agency margins, and that advertiser procurement practices and policies have been destructive to the advertiser/agency ‘partnership.’  That may well be true, but think about this:  would the ANA have even considered such a drastic and destructive step if advertisers hadn’t already pretty much given up on the media agency?  The media agency problem isn’t the K2 report.  The problem is relevance and time.  The problem is rust.

This week’s Drift is proudly underwritten by Krux. Krux helps more than 180 of the world’s leading media companies and marketers grow revenue and deepen consumer engagement through more relevant, more valuable content, commerce, and media experiences. Industry analysts have repeatedly named Krux a leader and visionary in the data management space, citing its agility, innovation, and independence. Download the reports today to learn more.

The simple truth is that the media agency is a transactional intermediary in an age where transactions have already been digitized and power and control have shifted from the intermediary to the transacting parties.  Travel booking once exclusively belonged to the travel agent; now it’s almost exclusively a direct transaction between the traveler and the carrier or hotel.  There are a hundred more examples of intermediaries being marginalized.  And the media agency position today has the unmistakable feel of a late stage disintegration.

Marketers, publishers, media companies and technologists are all innovating; often for the better, sometimes for the worse, but always with remarkable speed.  The media agency is increasingly seen as a high-priced toll collector who’s adding time and cost but not value to the trip.  A good friend of mine who’s been on the inside of the agency/client relationship argues that the media agency will now and forever more be in a state of perpetual review… yet another sign that the jig is up.

Group M’s Rob Norman writes persuasively about how his company is in a state of massive reinvention; that its investments and partnerships make it a fundamentally different kind of company and change the value equation.  Rob may well be right:  the ultimate spawn of WPP/GroupM/Xaxis may well be successful.  It just won’t be a media agency.  All that’s left for that model are more reviews, continued assault on margins and less relevance.

And rust.

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Life Beyond Swim Lanes.

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Life Beyond Swim LanesTwo years ago in this space I posted some thoughts on how the media and advertising world was getting curiouser and curiouser (“Crossdressing,” July 2014); how publishers were running creative studios, agencies were taking positions in media and marketers are becoming content producers. Thing have only gotten curiouser still.

I thought about this in light of the recent Publicis Groupe reorganization.   It seems that PG is doing what big agency groups do when bad things happen (like losing major business from Wal-Mart, P&G and Coca-Cola); they’re shuffling the org, merging a few divisions and creating some new agency and service brand names while retiring others. But while some of this may be window dressing, there is a profound identity crisis afoot that challenges us all to rethink our roles in the marketing mix.

This week’s Drift is proudly underwritten by Krux. Krux helps more than 180 of the world’s leading media companies and marketers grow revenue and deepen consumer engagement through more relevant, more valuable content, commerce, and media experiences. Industry analysts have repeatedly named Krux a leader and visionary in the data management space, citing its agility, innovation, and independence. Download the reports today to learn more.

Not too long ago, one could look at Terry Kawaja’s LUMAscape chart and say “that company is a DSP…that one is an ad server…and the one over there is a trading desk.” But that all seems quaintly anachronistic now. Big agencies are spinning out their own ad tech companies – Xaxis, for example – that look a lot like next generation ad networks. Companies that once positioned themselves as disinterested ad exchanges are now offering a range of tools and services to work the system. Other firms – the artists formerly known as SSPs (sell-side platforms) – now offer convenient services to the buy side as well. Fluidity is the name of the game now. But the danger is that a company that can be anything to anyone can easily end up standing for nothing at all. So how then to understand your place in the world and create a leadership vision in such a muddled, asymmetrical landscape? I believe it comes down to a handful of questions:

Where is the market underserved? What do we believe marketers and media companies deserve that they are currently not getting?

What non-obvious problems is our company uniquely qualified to serve?   What opportunities are we in a good position to help the customer explore?

Where are the gaps? Where do the handoffs and connections too often fail in current processes?

Once you and your team have really explored these questions (there are no quick answers), it’s best to assume no identity at all and instead work backward from the potential opportunity. That’s right: stop explaining how you’re no longer a DSP or that you only used to be a trading desk….nobody cares. Self-classification is the quickest path to marginalization.

The most successful companies in our world have always rejected labels, crossed borders and connected disparate ideas and markets. For others, it may just be that your box on the LUMAscape has turned into a prison cell.

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Crossdressing.

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CrossdressingI just read about Walmart launching its own digital marketing platform, effectively becoming sort of a media buyer (and sort of an agency), leveraging a treasure trove of sales and behavioral data on behalf of its suppliers.  According to AdExchanger, through the new Walmart Exchange (WMX) the company is “harnessing purchase, loyalty and other unspecified third party data assets to help suppliers spend their media dollars.”

Maybe it’s because I’ve been around media and advertising for so many years – or perhaps because I binged on MadMen recently – but it feels like the marketing world is getting curiouser and curiouser, and that the basic notions of identity and structure in the advertising world are falling away.

This week’s Drift is proudly underwritten by Bionic Advertising Systems, an advertising technology company focused on delivering innovative software that streamlines and automates media workflow for marketers, their advertising agencies, and publishers.

Let’s take a look at how things are shaping up.

  • Traditional “publishers” like Conde Nast, Hearst and others are increasingly offering creative services to marketers, edging themselves into traditional turf of creative agencies.
  • Agency holding companies are using their trading desks to pre-buy inventory and audiences and then holding that inventory – often briefly – for the future distribution of client ads.  In one sense of the term, they are becoming ad networks.
  • Marketers are getting into bed directly with publishers through native advertising executions.  When they’re not, they’re pursuing more of a direct content creation role through branded entertainment efforts.  Either way, they’re in the media business.
  • Xaxis, WPPs erstwhile trading desk, has morphed into more of an ad technology powerhouse, folding in the former publisher-side technologies (ad serving, etc.) of 24/7 Real Media.  So now they serve both the buyer and seller side of the markets.  Along the same lines, Rubicon Project once existed primarily as a sell-side platform (SSP) but now also offers some buyer-side tools and capabilities.
  • Walmart and Amazon are both retailers who opened their considerable online presences to advertising distribution.  Amazon the retailer is also Amazon the device company; Apple the device company became (through iTunes and terrestrial stores) Apple the retailer.
  • Any online publisher can now work with third parties to tag and find its site visitors when they are on other sites around the web, and/or find look alike customers.  By doing so, they can extend and fulfill ad buys beyond their own site borders.  So they are now media aggregators, something that agencies (and more recently, ad networks) used to do.

I could go on, but you probably get the picture by this point.  So who loses in this asymmetrical hall of mirrors?  Command and control based companies and channels.  In the past, they’ve clung to defined roles and control of access – to inventory, to audiences, to distribution of goods and content, to talent.  I think many of them will start to look very old and tired very quickly.

Who wins?  The nimble, the creative, the right-brain thinkers who solve problems and make order out of chaos.  Someday the generation that remembers a gentler, more stable time in the ad business – a time when agencies were agencies and media was media – will move on and institutional memory of role definition will fade.  There will be no us and them.  Only opportunity.

Maybe that day is already here?

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