The New Media Agency
By David L. Smith
May 2002 Issue

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In March, I wrote an article for MediaPost’s MediaDailyNews (see MediaDailyNews Archives at www.mediapost.com for 3/4/02) titled "A New Planning Organization." In it I discussed the concept of the new independent media (planning) agencies taking over the account planning function. In this article I will expand on the concept and talk about "The New Media Agency" from a global standpoint.

A little history is in order here. Media planning and buying always used to coexist within the same organization as creative. Yes, kids, it’s true. They were called full-service agencies. In the late ’60s and through the late ’80s, buying — starting with spot TV and eventually involving all broadcast — moved into independent media buying companies. In the early ’90s, these companies started to become "full-service media agencies," adding media planning to the service mix.

At that point the major agencies and holding companies had all begun experimenting with spinning off their buying units into separate organizations. Some of these operations (e.g., Omnicom Group’s OMD) were involved in broadcast buying only, and some maintained the structure of the media departments from which they were spun off, encompassing buying and planning (e.g., Bcom3 Group’s Starcom). A number of forces converged to cause this, including the increasing incursion of independent buyers such as Aegis Group’s Carat and Interpublic Group’s Initiative Media; the continued move on the client side to "agency-of-record" assignments, wherein one buyer executed all efforts within a medium (even where there were a number of different major creative agencies); and the growing importance of media in the eyes of the client.

In the past few years, the media planning function has moved toward the independents, a development that really marks the coming-of-age of the independent media operation. For the longest time the creative agencies held on to media planning with the argument that media planning needed to be partnered with the creative group for true strategic innovation to happen. We all know now that this is not necessary, and that in fact such bundling might hold media planning back.

Since the largest percentage of the advertising agency budget goes into media (85% for traditional and 70% for interactive), it stands to reason that the new media agency should become the "agency of record" for all media. Media relationships have proven to be longer than creative relationships. It used to be that agencies rotated creative groups on and off a business in order to keep the thinking fresh. They did so at the behest of the client, who needed to stay with the agency because of the need for media operation continuity. In today’s media world, the client is free to use a number of different creative resources as necessary, with the independent media operation providing the continuity. So if what we used to know as the major agencies become creative shops, what is the natural form of the new media agency that will best serve the client? After discussions with others in the industry, I’ve come up with one potential formation, which includes the functions featured in the following chart. This model calls for the new media agency to embrace a wide range of expertise, ranging from account planning and business analytics to sales promotion and interactive planning and buying. In addition to the functions in the table, the new media agency should develop expertise in direct response alongside branding. We always learn something new from a new medium, and the Web has been no exception. It is clear that there is a lot of learning relative to pricing and results that can be derived from direct response media efforts. Yet few media agencies have the core competency to deal with both on a major scale.

Strategic thinking would come from a team of senior analytical types, typically from media planning, business analytics, and account planning. Account management may or may not have a role on this team, depending upon the agency structure and background of account management. Or it may be limited to a coordination role.

Where will tomorrow’s managers come from in this new media agency? To date among the media independents, they have come from the ranks of media planners, business management, and account management. But leaders stand out, and it is conceivable that top management for such an organization could rise out of any of the specialties.

It makes great sense to bring market research, account planning, and business analytics under one roof, working alongside the media planner. In this way, all of the necessary related functions will be communicating with and drawing from each other. As it is today, there is too much non-communication within client and agency organizations among market research, account planning, and media planning, except after the fact. This turf battle could end in the new organization and only benefit the client.

The planner will need to be truly in charge of planning of all media, separating out planning from buying in the interactive space. Too much strategic decision-making in interactive is done at the execution stage rather than from a true planning perspective. It made a big difference at Mediasmith when we split off the two functions and planning did not start with sending out an RFP, but with objectives, analysis, and consideration of alternative strategies that work with the traditional media plan to maximize the client’s budget. If you talk to clients, they are getting tired of feeding several agencies and keeping interactive separate. They want us as experts to tell them what the media mix should be.

I have no doubt that a number of the majors are either pondering or experimenting with some or all of the above. As it plays out, career growth potential for the media planner will reach a peak and an influx of the best graduates into our profession will certainly ensue.

David L. Smith is president of Mediasmith, Inc., the integrated solutions media agency based in San Francisco. He can be reached at smith@mediasmithinc.com