Agencies and publishers are polarising structures based on the perfect storm

Technology killed the admin star.

One of just many debates raging around the new world of programmatic buying and exchanges. Are we seeing the death of the buyer? The death of the seller? Has the world of computers stripped advertising of all its creativity? Lots of big questions and debates but over the last six months, one common thread has become apparent; there is no value in execution in the long term.

Two or three big themes have converged in the last year, they have been around for longer of course but they have been lit up by the tech debate. The first is that in my view too many businesses sold their value on execution and delivery. These are necessities and you can’t not have them but is that where the value is? Is that what you charge more for? I don’t think so, the agency world in particular suffers from focusing a lot on service and delivery and execution over real value add strategy and quality creative thinking.

In itself that is not the end of the world, many advertisers want perfect execution of course, but what it ends up being then is an easily quantifiable, discountable service that becomes very commoditised – tell me the difference between two media agency TV departments? Secondly lets combine that with the fact that the world of Paid, Earned and Owned means that clients are now not only trying to squeeze costs and fees they are starting to see these new approaches as a gateway to spending less. I have just finished doing preliminary judging and of about 40 entrants at least 37 boasted / moaned (not in so many words) that they had little or no budget to make their campaign work.

So we have smaller budgets based on the social buzz doing the heavy lifting for us and we have fees for service and execution being cut – that leaves us with only one alternative – start to charge for ideas and creativity, for strategic guidance so that the execution is less crucial to the revenues. This works more now than ever as to make the social buzz work for you, good ideas and strategy are needed to do is no coincidence that the non traditional media planning and buying teams in agencies are the fastest growing divisions. Big sponsorships, events, social strategy, performance strategy, content, these are where the future lies backed up with technically led brilliant basics.

To gain traction strategically you need to invest in good people. You also need more of them. Investment  in the current climate is not straight forward so you need to rebalance the organisation. The investment in time and people from a strategic perspective needs to increase and at the same time you need to make execution more efficient allowing you to free up people and resources to focus on intellectual capital. So Enter the third factor  – programmatic buying.

Ask a customer if they want to pay for a load of people bogged down in admin, or people actively thinking about how best to run their business and make it a success, the answer will invariably be the latter, but that’s what we all do in the main at the moment. Clients pay for people and hours spent on too much Admin and not enough thought, this situation needs to change. Technology and programmatic buying/selling is now allowing all companies to achieve efficiencies. Whether it is publishers like the Guardian or agencies through trading desks technology is freeing resource to focus on value rather admin.

Publishers are moving fast now, after a stuttering start, they are moving rapidly, trying to find ways to move more and more into programmatic sales, now with words like premium and brand being attached. They are opening parts of the site, previously sacrosanct such as home pages to the evils of tech. Trading and execution is taking a back seat as Partnerships, strategy, event type words come to the fore – BIG ticket sales are now the focus.

Some recent people decisions are a reflection on that with people like Vevo choosing Partnerships people over sales people and Yahoo re-evaluating structures and there are many more. I am sure The Guardian will be looking to Tim Gentry to help them achieve better margins and a more efficient approach to the market, the signs are there..

So for me the message is clear – we all need to find a way to make money from clients and customers who want to pay less for service and execution and spend less on advertising. Armies of people pushing excel around is not going to be the answer.

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