John Billett: Agencies have become the Media Owners
This week, John Billett, Chairman of ID Comms, issues a strong warning to global marketers about their management of media agencies.
In his autumn lecture to the Worshipful Company of Marketors in London, John provides a fascinating insight into how media agencies came about, how they grew so quickly and where they find themselves today, considering the dramatic impact for marketers and how they may have lost control of their media.
Scroll down to download a full transcript of his speech, presented to the Worshipful Company of Marketors in London.
Here are a few key highlights:
"The fundamental change taking place across the marketing services business is that the agencies, who for a long time were the agents working on behalf of advertisers acting as custodians of the advertisers’ best interests, have now become the media owners."
"Faced with declining fees from their advertiser customers, the media agencies, quite understandably have turned their attention to the media owners as sources of additional income."
"The media agencies now find themselves in a wholly changed environment. Originally charged with protecting advertisers’ best interests and being paid by the advertisers accordingly, they now enjoy the considerable majority of their income from the media owners, whilst still vowing to work for advertisers, and now bring to the media owners even more new opportunities."
"The pace of change and the scale of offering have come as a surprise to many in the business. This is an example of how easily advertisers have become detached from the reality of how their money is being spent."
"Six media holding companies, most of whom are larger and more influential in media trading than any media owner, now determine who gets what and where and at what price. The media agency has indeed become the media owner when it comes to trading media."
"Automation is a very hot topic and cross- industry studies show that marketers deploying data driven campaigns can increase efficiency by a third. But the risks are considerable."
"The media agencies have the scale to exploit this financially across the portfolio of their activities in this fast moving expanding field in which the blurring of boundaries accelerates."
"Matters have now reached a head of steam where advertisers have now relinquished control. But it is the advertiser who controls the purse strings and now is the time to use that authority."
"For too long marketers have been lulled into a false sense of security about their media trading. This has allowed media agencies a free hand to operate in their own best interests."
"The time is right for Marketers to regain control over the way in which they allow third parties to spend their money."
Click on the button below to download a full transcript of his speech.