Can networked agencies compete with the best collaborating independents?

Originally written for the Guardian Media Network MAA Partner Zone.

The number of media channels available to take advertisers global campaigns to market has grown significantly in the last decade. Alongside this, the growth in advertisers’ spends on marketing implementation is beginning to catch up. Well at least that is an assumption which can be made by the number of large networks that are spinning off their production units into fully fledged implementation houses, Omnicom’s Eg+ Worldwide being the latest.

Whilst this makes sense for agency networks intent on protecting their margins, it is not clear whether advertisers and publishers will benefit.

How much of what an advertiser spends actually reaches the publisher?

Transparency has always been one of the questions on advertisers’ minds when considering networked agencies. They want to understand exactly how their spend is deployed throughout the network and how much of it reaches the publisher.

Nick Manning. CSO of Ebiquity, a leading independent marketing analytics specialist, suggests it’s as low as $0.40 in the $1.00:

“Far too much control still lies with agencies and ad tech firms with far too much of an advertiser’s spend disappearing into the supply chain across multiple, often unknown, intermediaries. This means that only $0.40 out of every $1.00 actually reaches the publisher, even before issues of non-human traffic and viewability come into play.”

Overheads, legacy technology and lengthy processes

Larger agency networks can also struggle to match the agility and efficiency of the best independent agencies. The overheads, legacy technology and lengthy processes common within large corporations can also be applied to agency networks.

In contrast, independents naturally have the advantage of low overheads, as well as the ability to keep them low. They can cherry pick the very best technologies as well as customise or build them where they see value for themselves, their partners and their clients.  Digital Asset Management systems as well as approval, translation and video subtitling applications are powering today’s best global marketing campaigns towards success.

Multi-independents agency solution

Many advertisers, many of today’s fastest growing brands, have wisely chosen to assemble the best independent agencies and bundle them together to create their own solution.

There are obvious advantages to cherry picking the best independents within their areas of specialism. Advertisers retain the power to select:

  • The best hotshot creative agency to work with, whether they have a global network or not
  • Their preferred media agency, where control of transparency and margins remains with the advertiser
  • A global marketing implementation agency that offers a global network, scalability and / or efficiencies to suit the advertisers needs
  • Of course, collaboration is key within this model, and there are many examples of where multiple independent agencies have combined to deliver some of today’s best known global campaigns. EA Games’ FIFA 16, IHG Crowne Plaza’s You First and Fitbit’s Find Your Fit for example.

Fitbit’s Successful Find Your Fit Campaign has reached 15 markets and it’s still growing

When Fitbit, the wearables firm dedicated to health and fitness, decided to launch its first global TV campaign, it turned to Argonaut, a hotshot creative agency from its home city of San Francisco. Their Find Your Fit creative was implemented across six markets by marketing implementation agency, Freedman International.

The creative, its transcreation, TV clearance, subtitling, voiceovers and implementation, were all delivered successfully by best of the best independent agencies.  In fact, Find Your Fit was so successful that it now extends to 15 markets and continues to grow. The collaboration itself also extends to other partners and legal bodies.

Does anybody benefit from the network agency model?

Network agencies do of course have their place.  Multinational advertisers, such as Mondelez and Heinz, that aim to squeeze as much value as possible from their chosen agencies, will most likely welcome the spin-off implementation houses.

However, another dinosaur model that aims to protect the margins and status quo that already exist within the networked agency model will not appeal to fast growing and fast moving companies. Companies such as EA Games and Fitbit are voting in favour of the independents, and seeing a good deal of success through doing so.



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