How will Ad agencies manage Ad exchanges?

Marco Bertozzi: 18.11.09
I mentioned how important ad exchanges are becoming but not the difficulties they will bring both to sellers and buyers.

By some they are touted as an impression by impression targeting opportunity where at last you can optimise your ROI against a very specific audience, this may well be true. However to achieve this campaigns need to be managed day in day out, who will do this in an agency? It’s closer to running a search campaign than a display campaign but I can’t see the search teams running it, so that leaves the buying teams.

Buying teams don’t do what the search teams do and on the whole would rather not. Those guys tend to buy idea based campaigns, Ad exchange activity will need optimising, not weekly or twice weekly but hourly, the buying teams won’t do that, they have too much else to do.

I know that companies like google struggle with this, who are we talking to; buying, planner buyers, search teams, account teams, digital teams? Their problem gets worse when you add in video, with tv and digital departments grappling over who owns it. This is the fundamental issue agencies face, Damian Burns at a recent Monaco Media event challenged Nikki Mendonca on how an agency should adapt and I am not sure she really had an answer, it’s clearly still a difficult situation.

Let’s say we do sort all that out, the bigger issue remains that this all takes resource and therefore decent salary budgets. Digital media commissions have stayed relatively strong with many clients still paying 10+ percent but any decent sized account is now half that and below, where is the agency going to make money on these new time consuming approaches and that includes social media.

I hope that slowly agency payment methods evolve to one closer to paying for a premium service, monthly fees being a norm rather than an exception, even better monthly fees with a commission, I think these new channels will make agencies have to reevaluate how they charge and establish exactly who will do the work!

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