May 2007 Archives

I had a comment piece in this week's NMA moaning about trading directors in media agencies.

Trading directors act as a central buying or negotiation point for big media agencies.  On behalf of their clients, they often control multi-million pound budgets.  And of course they have a reputation as being pretty ruthless negotiators (although in real life, it's worth saying, they are often charm personified!)

So what's wrong with this?

My point is that by focusing on something easy to measure - like price - it's easy to miss the more important metric of value.  And because value in digital media is often associated with tightly targeted buys, it doesn't lend itself to bulk purchasing models.

In other words, the trading director may commit his or her agency to a large volume buy across Sky.com.  But a particular client may do better concentrating within a specific channel on Sky, or on a particular ad format - which may not form part of the deal.

There's a feeling that those agencies with the strongest trading directors also have a correspondingly weak planning function.  Some of the levers that could be usefully pressed are simply not available.

Is this really a bad thing? To be honest, it depends on what the client is trying to do.  A big brand looking for maximum exposure, essentially using the web as a broadcast channel, will do well with the trading model.  A direct response client, aiming for specific actions like sales or registrations, could well do better elsewhere. 

At the Insight 2007 Summit in London yesterday, one of the most interesting presentations was - for once - the keynote from Doubleclick's CEO David Rosenblatt.

Naturally he dodged any comment on the forthcoming merger - courts willing - with Google.  But his comments on the state of online advertising suggest that there might be a bit of a chill wind about to blow through the agency sector.

His argument is that online advertising is fundamentally too expensive - both in terms of rates, but more importantly in terms of set up costs.  And that expense makes it ripe for automation.

There's more than a shred of truth in his comments. We use a lot of technology to set up and run campaigns, but the set up itself it a painfully manual process.  And it's much more time consuming than a typical offline campaign, partly because - for us at any rate - we tend to run quite complex campaigns with many different placements, ad sizes, formats and the rest.

It's easy to sit back and say that technology can never replace the job of an agency.  But any function within an agency that is essentially mechanical - copying data from one Excel spreadsheet into another, or manually entering data into a web interface - probably will come under threat sooner rather than later.

I guess that media agencies need to focus on what they are supposedly really good at - like planning and strategy - and get that buttoned down before the machines come knocking!