Exclusive comment piece by Marius Smyth, Managing Director EMEA of AdRoll
It’s official – media agencies have come a long way from the old-school days of brokering deals energetically over the phone on the agency floor or over long lunches. These days you’re more likely to hear a media buyer shouting ‘can we plug-in to your platform?’ at a tech specialist, as ad-tech firms and agencies work more closely together.
Ad tech has become integral to agencies’ need to future proof, but agencies must continue to adapt their traditional models and fully embrace what technology has to offer, if they are to keep pace with client expectations, according to the buyers, managers, directors and business owners AdRoll surveyed for its report ‘Welcome to the Era of Mad Tech’.
Welcome to the Era of Mad Tech https://t.co/FFziwQdVEs pic.twitter.com/OeEZjDQ919
— Will Corry (@slievemore) January 28, 2016
The changing industry landscape is a topic on everyone’s lips; in the survey 68% cited future proofing as a top priority and many are turning to platforms such as pay-per-click, retargeting and search engine optimisation (SEO), programmatic and social media management, to achieve this.
AdRoll’s report, ‘Welcome to the Era of Mad tech’ can be downloaded here
Media agencies working with more ad-tech platforms is one thing – but just how productive and collaborative are the relationships between ad tech companies and media agencies? Our survey delved deeper into the relationships that currently exist, showing the different ways agencies value what ad-tech companies bring to their businesses.
A staggering 90% say they have a close relationship with their ad-tech partners, a sentiment shared across companies of all different sizes.
Half the agencies we surveyed for this report reveal their relationship with ad tech companies is so established that they are happy for partners to interact and provide information to clients – 39% even bring them into pitches. Likewise, many companies use their partners to upskill internally; 34% frequently bring partners into the office for training, exposing wider teams to their knowledge and processes first-hand.
Ad tech companies and agencies both recognise digital technology as a valuable tool in their armour and agencies are increasingly partnering with ad-tech firms to deliver better results to clients. 56% have benefitted from productive collaborations, saying data-driven solutions have allowed more time to get creative and focus on strategy. Meanwhile 46% agree ad tech is allowing their agency to provide clients effective technology-based solutions at more competitive rates.
However, issues of trust and perceived competition remain.
Trust is a key issue when it comes to choosing a relationship with an ad tech company.
One third of agencies surveyed say they would go with an organisation they could rely on not to undercut them, suggesting a level of uncertainty in the industry. This perceived competition from ad tech companies is more than an underlying issue and one the industry should work together to resolve. Up to a third of those surveyed say ad tech was contributing to a squeeze, with their agency facing increased competition from ad-tech companis.
One medium-sized agency interviewed for the report said: “Several years ago some ad-tech companies tried to accost our clients directly and this kind of behaviour has probably created some rifts in the industry, but if you have a good relationship with your client, it shouldn’t matter. It’s a risk if an ad-tech partner wants to go to a client direct as they don’t know them enough to understand their dynamics.”
Our research shows that the smaller agencies were feeling this more acutely with 32% of firms with turnovers up to £50m acknowledging this, compared to 17% of the larger agencies.
Our survey highlights that the conversations between agencies and ad tech might not be so much about simply ‘protecting’ themselves from each other, but increasingly about figuring out the challenges. After all, for the marketplace to be operable the industry needs to maintain a level of trust and credibility.
A perceived fear of ad tech shaking up agencies’ position in the online world comes from the realisation that there are still big changes ahead that are yet to be addressed. For instance, 44% of those surveyed say the increase in data-driven digital solutions will soon start to influence the buying of traditional media– such as print, radio, TV.
From our perspective, we don’t think ad tech has been trying to replace media agencies. It is simply the case that we have the relevant technology and the tools to help deliver for clients, and alongside media agencies, we can provide an aggregated experience for consumers.
As the lines in the advertising ecosystem continue to blur, the opportunity is to focus on trustworthy integration. Working together has to be key.
AdRoll’s report, ‘Welcome to the Era of Mad tech’ can be downloaded here
Marius Smyth, Managing Director EMEA of AdRoll
