The leading advertiser organization in the world - the ANA -- just issued a 58-page report accusing its ad agency "partners" of everything from shady buying practices to kickbacks to conflict of interest. The ad agencies' own trade group - the 4As - has naturally cried foul, arguing that they should have been fully involved in the investigation all along (not unlike having the defense team sit on a grand jury). But the whole food fight about whether the report was fair or accurate or should have named names just distracts us from the big truth at its core: The entire premise of the media agency has timed out.
It's being argued by agency defenders that the ANA's motive is money and control; that advertisers are trying to squeeze even more blood from the empty stone of agency margins, and that advertiser procurement practices and policies have been destructive to the advertiser/agency 'partnership.' That may well be true, but think about this: would the ANA have even considered such a drastic and destructive step if advertisers hadn't already pretty much given up on the media agency? The media agency problem isn't the K2 report. The problem is relevance and time. The problem is rust.
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The simple truth is that the media agency is a transactional intermediary in an age where transactions have already been digitized and power and control have shifted from the intermediary to the transacting parties. Travel booking once exclusively belonged to the travel agent; now it's almost exclusively a direct transaction between the traveler and the carrier or hotel. There are a hundred more examples of intermediaries being marginalized. And the media agency position today has the unmistakable feel of a late stage disintegration.
Marketers, publishers, media companies and technologists are all innovating; often for the better, sometimes for the worse, but always with remarkable speed. The media agency is increasingly seen as a high-priced toll collector who's adding time and cost but not value to the trip. A good friend of mine who's been on the inside of the agency/client relationship argues that the media agency will now and forever more be in a state of perpetual review... yet another sign that the jig is up.
Group M's Rob Norman writes persuasively about how his company is in a state of massive reinvention; that its investments and partnerships make it a fundamentally different kind of company and change the value equation. Rob may well be right: the ultimate spawn of WPP/GroupM/Xaxis may well be successful. It just won't be a media agency. All that's left for that model are more reviews, continued assault on margins and less relevance.
And rust.
