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Does Programmatic Signal the end for Media Agencies?
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Does Programmatic Signal the end for Media Agencies?

Industry experts have hailed 2014 as the year of programmatic advertising and everyone from publishers to media agencies are looking at what this new model means to them. Advertisers, in particular, are very excited about this shift as it is an opportunity for them to control their brand’s data and decide how it is used to buy media space.

This may sound as though the role of the media agency is in question. However, we see programmatic advertising simply marking a slight change in how both brands and media agencies use and deal with one another.

Traditional roles and responsibilities

Traditionally, the task of buying and planning media was delegated to an advertiser’s media agency whose presence led to lower and lower ad rates when they sat at the negotiating table.

As brands have increasingly started leveraging their own data, the opportunity to bypass the media agency and reach the consumers they want has become more appealing. Overall, this is predominately due to the transparency in fees and rates.

However, realistically, the number of brands looking to bring their services in-house is not going to be a huge number. During the recession, many looked to cut costs by cutting their external PR and Marketing agencies but the effect of this was not overly significant. Many kept their agencies anyway because of the added value that an external consultant provides.   

Knowledge is power

As a result, for media agencies, knowledge is power. Their added value stems from their strong relationships with media owners as well as their ability to understand trends and technologies in order to advise their clients on strategy.

Brands are more often than not, too close to their own products so their marketing and advertising decisions are not based on a 360 degree viewpoint. Having that external voice from a media agency helps brands to fight those blinkers.

As mentioned previously, media agencies know inside out how every single media platform works and in turn how they work together. Therefore, success for brands comes from media agencies using this knowledge to form partnerships with publishers and TV networks that can then provide brands with a platform amongst consumer-generated conversations.

This ability to naturally weave brands into everyday life is extremely valuable and in turn encourages publishers to come directly to media agencies with their own creative ideas. 

A new beginning  

In this new programmatic world, it seems that supply side platform wants to be the media agency and vice versa. As the lines become blurred, one of the key strategies will be for media agencies to seek more synergies, for example by collaborating with trading desks and operate an investment arms.

New technology often signals a change in behaviour and the successful media agencies will be those who use programmatic to their advantage whilst remembering their core strengths. By focusing on their creative and analytical assets they will continue to add value for their clients by driving digital messages that inspire and meet KPIs.  

It seems that however automated advertising may become there will always be the need for a human voice to offer advice and guidance.

Tom O’Regan

Tom O’Regan

Tom O’Regan is a seasoned advertising executive with an expertise in vertical publishing and sales strategy. Prior to Martini, he was Senior Vice President of Advertising Sales at TheStreet Inc where he was responsible for firm-wide advertising revenue and operations, marketing and creative resources. He received his bachelor’s degree in Financial Management from The Catholic University of America.

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