The media agency space has never been more crowded or more competitive. Set against the tumultuous global events of the past few years, the sector has seen consolidation among the big networks, the rise of more focused and ambitious indies, as well as a crop of new entrants and new technologies to the marketplace.
PR agency Bluestripe Communications (part of the Bluestripe Group, publishers of New Digital Age) recently hosted a live roundtable discussion in London to unpick the current challenges facing media agencies of all sizes and to ask what the future might hold for the sector. Bluestripe’s Managing Director Lydia Oakes hosted the session, where she was joined by Alex Marks, Head of Marketing, Posterscope; Abba Newbery, CMO, Habito; and Gideon Spanier, UK Editor in Chief, Campaign.
Alex Marks of Posterscope (and formerly Head of Marketing at dentsu international) opened the discussion by noting the sheer unpredictability of the contemporary marketplace. He said: “Anyone who tells you that they know what the future holds for media agencies is full of it. It’s getting like the Wild West again. In-housing is becoming prevalent in the US and increasing over here. There are lots of new entrants with different, nimble, tech-based models. You have media and publishing companies offering agency services, and a growing number of marketing collectives using experienced freelancers. Then you have global consultancies like Accenture Song sitting on the sidelines, waiting for things to go wrong.
“The old agency model is being questioned increasingly by clients,” said Marks. “So, it’s all to play for.”
Campaign’s Gideon Spanier pointed out that we are living through a changing of the guard period in terms of the media agency sector, but that the industry remains resilient. He commented: “The initial rise of the media agency was around 30 years ago, when they first started to separate out from the main creative agencies. The amazing thing is that a lot of the same people who were there at the start of these media agencies have, until very recently, still been at the head of those organisations. 30 years is a long time so, in a way, I think media agencies are only now kind of going through a bit of a generational revolution.
“However, in broad terms, media agencies have been incredibly resilient. During Covid, for example, media agencies coped a lot better than creative agencies.”
The start of something good
Abba Newbery of online mortgage advisor and challenger brand Habito offered the perspective of a start-up targeting high growth. She explained: “Having worked in major agencies myself, when it came to pitch Habito’s advertising business, I chose to not even look at a network agency. As a small client, with a smaller marketing budget, I just assumed that I would get the least experienced team in the agency. So I chose to pitch only into independent agencies and, to their credit, the independent agencies are very good at talking to clients of my size.
“The flipside of that is that not one network agency has approached me for our business in the last four years. I think the big players need to take another look at the start-up community. Maybe they could put their money where their mouth is, believe in the power of the media they are selling, and strike some better deals with start-ups to help them understand how media spend can drive rapid growth.”
Newbery also commented on the general lack of profile for media agencies in the business press. She said: “No VC has ever recommended that I go talk to a particular media agency. The industry has an incredible opportunity at the moment to get to the top table and talk to clients at a CEO level. Media agencies need to do more to get their stories out there and be louder about the value that they are delivering for their clients.”
Marks outlined how the media agency industry is facing a trio of major challenges right now, the first of which is ‘differentiation’. He said: “We have an oversupplied market of lookalikes, all doing much the same thing. A lot of media agency marketing tends to be shouting about awards, which doesn’t work that well in my opinion. The second challenge is demonstrating the value of our work. We need to concentrate on talking about our customers’ pain points and our ability to solve them. The third challenge is business growth, which means having a proper nurture programme in place with your existing clients and having a good pipeline of leads. We can’t rely on business simply walking in the door anymore.”
Spanier closed off the discussion on a positive note, saying: “The UK and London in particular is still genuinely a world leader in agency marketing services. A lot of people who cut their teeth here at some point in their career have gone on to bigger global roles. This is very much a thriving industry, full of smart, entrepreneurial people.”