Increasing expectations will alter the media agency’s paradigm — and brands will feel that shift

Media agencies are facing tremendous pressure these days, much of it stemming from marketer expectations. And though few marketers may feel sympathy for those pressures (who doesn’t feel heat these days?), it behooves them to step into the agency’s shoes for a minute or two. After all, as industry shaker Rishad Tobaccowala, now serving as chief growth officer at Publicis Groupe once said, “Agencies are cockroaches.” They’ll always find a way to survive.

Surviving the current challenges will force media agencies to become tech powerhouses, and that will dramatically alter the digital ad landscape. Brands need to know that in relatively short order, they’ll find a different sort of partner sitting across the table from them.

The new normal of media reporting

The first challenge agencies need to address is the marketer’s demand for extremely sophisticated and granular reporting, the kind that Google, Facebook and Amazon have set the stage for.

For the non-Googles of the world, digital reporting has always been difficult. Informing clients when and where their ads appeared has long been an exercise in mucking around with multiple systems and piecing various (typically Excel) reports together. This takes time, and there’s always a degree of discrepancies to reconcile.

Contrast this with the industry behemoths, which can seemingly deliver highly granular reports with a touch of a button. In an instant, clients can get real-time details of where their ads appear by country, DMA (Designated Market Area), time of day, audience and so on. But only on their properties.

Marketers love the level of reporting that Google, Facebook and Amazon deliver. They want that same level of granularity and timeliness for all their media, and they pressure their media agencies to provide it.

Media agencies might be able to deliver a similar level of reporting if they too placed ads solely on sites they owned, but that’s just not the way it works. They acquire and report on campaigns spanning hundreds of properties across digital, print, television (smart and traditional), out of home, radio and so on. Reporting is, to put it mildly, complex.

Ability to manage client first-party data

The other major challenge revolves around first-party data. Marketers are sitting on a wealth of it and are keen to use as much of it as possible to improve their targeting, better understand their audiences and make strategic business decisions based on real market data.

But unless they’re one of the few companies that have implemented a data management platform internally, they expect their agencies to find a way to put their first-party data to good use while ensuring its privacy and security.

Once again, this introduces a complex tech requirement for agencies to contend with, specifically ingesting, normalizing, securing, and then slicing and dicing massive datasets.

Get ready for the new media agency

Combined, these expectations create big issues for the agencies, because the only way to solve them is through a lot of technology investments. Traditionally, they haven’t owned a lot of technology, but they’ll soon be in the market for centralized data systems, centralized reporting layers, cross-team log-ins and DMPs (data management platforms).

They’ll need lots of stuff. With revenue running in the $10 billion to $15 billion range, these investments are significant.

But as Tobaccowala said, if there’s one thing agencies are good at, it’s adapting to change. I have no doubt that agencies will move toward a sophisticated technology solution stack in order to deliver a single seamless report across all media.

To do that, they must combine their overall technology investments with fundamental changes to the structures of their organizations, elevating the role of data-driven organizations. This last part shouldn’t be a shock, since more and more we hear from agency leaders that their strategy is to morph into tech-first companies with data skills that may just rival Google (at least as they apply to advertising).

From a marketer’s point of view, the question is: What should you do, if anything? The dilemma of managing data versus in-house versus sharing is one under discussion now. And if you know the agencies are evolving, might it not be better to evolve with them?