Will Technology Destroy Media Agencies, As Brands Take It In-House?

Will Technology Destroy Media Agencies, As Brands Take It In-House?

In this guest post, tech journalist and editor of Which-50.com, Andrew Birmingham, takes a look at the emergence of ad and martech and why the news looks grim for media agencies…

B&T Magazine
Posted by B&T Magazine

If the merger of ad tech and martech enables more marketers to execute their own media buys, agencies will find themselves in an interesting position.

The changing role of agencies was one of the key points of discussion during a recent roundtable hosted by Which-50 in Sydney, addressing the implications of the ‘MadTech’ Merger. The discussion helped inform a white paper from AdRoll. (Read the white paper here.)

Ayal Steiner, Outbrain’s APAC managing director, said the convergence – and the possibilities it creates – will mean organisations may encounter new conflicts.

“Essentially, it’s allowing the brand to execute a media buy. That is interesting, because one of the inhibitors that we talked about is the fact that media budget, historically and sometimes contractually, sits with the media agency,” he said.

“So suddenly you probably will find there’s tension between marketing departments that want to execute an ad tech buy, but they cannot access the capital, because it’s parked with the media agency.”

However, if organisations can navigate this conflict, it means brands can buy media directly from their marketing stack, Steiner said.

That then prompts the question: what is the role of a media agency, and do they become largely redundant in a MadTech world?

According to Mathew Barnett, head of marketing at Triad Retail Media, agencies may indeed need to consider their value in that exchange. It also potentially presents a new role for agencies, as organisations aspire to create real-time personalised customer experiences, he said.

“If you’re going to get personalised, then you need the creative and the content of the message to be personalised along with those different tracks. That creates a lot of complexity. So there’s a big opportunity for agencies to really look at alleviating that complexity for their clients,” Barnett said.

In a similar vein, guests at the roundtable discussed the need for the right talent in a customer-experience-focused world.

“The greatest challenge that we see, both on our side as an agency plus at the platform and the client side, is talent scarcity,” said Clement Tsang, head of consulting at Cadreon. “As people bring in teams in-house, the level of opportunity to recruit experienced talent becomes less and less.”

While new technology and its convergence may enable better and more personalised customer journeys, Tsang agreed it brings with it new complexities to alleviate.

“People sit at the heart of it.”

“Ultimately, it will be about a diverse workforce with a lot of skills across different channels. That is still a work in progress,” Tsang said.