#MediaSnack

In this episode we discuss the major restructure of Publicis Groupe and how this might impact their media agency brands, we discuss findings from the many new 2016 ad spend predictions and finally close on a fascinating piece of research of C-suite and senior markets (FT readership) which was conducted by agency Maxus with the FT insight team.‬___________Find ID Comms here:Website: http://idcomms.comTwitter: http://twitter.com/idcommsLinkedIn: http://linkedin.com/company/id-commsG+: https://plus.google.com/b/101836473001605573756/101836473001605573756/postsAbout ID Comms:• ID Comms is a strategic media consulting company, founded in 2009• We act as a trusted media partner to the world's leading advertisers, helping them to navigate the complexities of the changing media landscape.• Media is a very powerful lever for growth for brands, but the landscape is complicated, cluttered and confusing. Making sense of this and knowing what to focus on is a challenge for marketers.• It comes down to having the right knowledge to make decisions with confidence and the right controls to implement them, and that's what we do.• We provide clarity in this complex landscape by empowering our clients with the knowledge they need to take the right decisions and we provide the data and tools to give them more control over their media performance.v

On this week’s #MediaSnack we start with news that GroupM, the world’s largest media buyer and ‘parent’ to four of the world’s leading media agency networks is going to merge two of them, creating a group of three agencies and making room for recent digital agency acquisition Essence to become a more focused part of GroupM service offering to advertisers. We continue our countdown to the one year anniversary of the ANA’s Media Transparency Report , this week looking at Media Trading, that is the buying and paying for media inventory and we consider how that has evolved and what, if anything, might be as a result of the ANA media reports and guidelines. So, firstly, what has actually changed in the world of media buying? The ANA report was really largely about media buying and they drew attention specifically to the WAY media is bought in the US. The ANA report highlights that in some places, agencies might be making additional undisclosed income from vendor side, which was steering media buying decisions. A lot of the issues highlighted pointed to the need to clearly define whether the media agency acted as Principal or Agent under the contract. And we know, a few companies now have made public statements in this area, notably P&G revealing that they are changing all media agency contracts to ensure the agency always acts as agent not principal. Chief Brand Officer Marc Pritchard admitted even P&G been surprised when they found out income places the agency was acting as principal. This is probably the biggest impact to the way media is bought, directly attributable to the findings of the ANA Media Transparency Report. We are seeing that more and more advertisers are firstly aware of the distinction of agent versus principal and the implications of both, then making clear decisions which approach suits them best. We are observing clearer language in contracts with media agencies to determines principal or agent status. In the last 12 months since the ANA report was published we’ve also observed clearer differences in how advertisers view the resources they need to buy media in traditional (old world legacy) media and digital (future) media, (with some blurring of boundaries taking place with regard to those "digitising channels" such as DigitalOOH). What we observe is that advertisers big and small are starting to make strategic plans for the longer term future of media buying. Nothing is certain but increasingly advertisers are seeing that their requirements for media buying services will be met from a number of different sources, some a network media agency, some might be a programmatic specialist for example, some might be activated internally via better self service tools, some might be negotiated direct with vendor. Whatever the right model for you, its a sure bet that media buying is about to become more open, fragmented and more automated, so hence advertisers are investing time and resources to plan for that future and create a model which gives them the flexibility to adjust over time. Still, there are some pitches which are still attracting negative headlines for appearing to be focused largely on reducing the cost of media. One example from this week is the coverage US TelCo 'Sprint Mobile’ attracted after their recent media pitch. The AdWeek headline “To Cut Costs, Sprint Picks Horizon Media to Handle $700m Media Business”

#MediaSnack 116: Sorrell's Legacy And WPP's Future by ID Comms

Never miss your #MediaSnack - subscribe for updates every FridayOn this week's #MediaSnack we look at the challenging past year for Facebook and consider exactly how they can maintain their incredible rate of growth. This is going to be hard for a business for which advertising revenue accounts for over 98% of their total revenues. Their growth continues to be meteoric in spite of their scale, with revenues in 2016 growing over 50% year on year. Monthly average users now exceed 2 billion which makes Facebook one of the most adopted inventions in the history of mankind. Where do they go from here? In the last year, alongside this growth has come some dark clouds on the horizon for Facebook in a few key places:1. Metrics - the almost monthly revelations that Facebook has overstated the effectiveness of their advertising products, often shared in2. Accountability - calls for Facebook to drop the walled garden and stop "marking their own homework" and get MRC accredited. 3. Fake news - Facebook being used to manipulate voting in the US4. Censorship - a seemingly confused policy around what is acceptable, behaving like a media company rather than a technology company 5. Data and privacy concerns - recent reporting raised the concern that Facebook is the worlds most sophisticated surveillance operation and their vast revenues from advertising suggest that this ability to monetize user data for targeting advertising is Facebook's greatest value. So, has Facebook's value peaked? We think there are a few important indicators for this. - Will they decide to be a media company?- Have they reached saturation and when do you get the next billion users from?- Minimising the churn of users, especially at the younger end where companies like Snapchat and Musicly are receiving investment t grow which will be focused on stealing away Facebook users.- Amazon - they are chasing ad revenue from Facebook which could be damaging because Facebook maintains a large share (along with Google) of digital advertising in many major Western markets, with Amazon providing a hugely compelling alternative, you'd imagine the risk that Facebook's advertising revenues can only go in one direction. - Data regulations like GDPR will cause users to be more aware of the data they give up to companies like Facebook and get more savvy about the terms and conditions. On this week's Good Week Bad Week we celebrate the amazing Singles Day on Alibaba who posted $25bn revenues in one day, so a great week for them. A Bad Week for anyone hoping to budget for their 2018 trip to Cannes Lions Festival (of creativity and expensive everything) as the owners of Cannes revealed, after some apparent consultation with agencies, the new 'slimmed down" version of Cannes. It appears to be far more of a token trim than a haircut and won't make any perceptible difference to the vast costs endured by agencies and vendors attending en masse. A missed opportunity to make Cannes more relevant to the next generation in our industry.

Never miss your #MediaSnack - subscribe for new episodes every FridayOn this #MediaSnack special we celebrate the 100th episode by looking ahead at some major trends for 2018. First we quickly look back on what’s happened in the last two years and then lay down three big predictions for media in 2018, from a marketers perspective. It goes without saying that a lot has changed in the media industry in the last two years, but we say it anyway. It’s been a challenging time all around in many respects but the major positive that we’ve seen has been that media has risen higher on the corporate agenda. Marketers are taking media more seriously and applying resources internally to manage this last amount of money. Hopefully, more are seeing media as an investment rather than a cost. This has happened for two reasons. Firstly, marketers are seeing the power media has to drive their business outcomes and therefore striving to make it more accountable and more effective. At the same time media has become hugely more complex and needs more governance and resource to manage it. Second, concerns over the supply chain of media especially in digital has caused marketers themselves to become more accountable and demand greater transparency of how their money flows through the supply chain. This has been highlighted by significant milestones over the last two years notably the work done by the WFA, ANA and ISBA to shine a light on the supply chain, the speeches by P&Gs Marc Pritchard outlining an action plan for media transparency and thirdly the ongoing worries about ad fraud and brand safety. So onto our predictions - here are 3 behaviours that we think will be at the forefront of #MediaChange in 20181. Operating Models for Media - advertisers will define long term internal strategies for media management and build capabilities and process into an operating model for media. This means being clear the value of media, not just the price of media, and determining what resources are required internally and externally. We reference some great research by Matt Green and the team at WFA which highlights the progress that has been made and the clear intentions of WFA members to build up media capabilities and define an operating model.2. Fragmentation of Media Scope - marketers will want to understand the entire process of media activation from data and analytics, insight and strategy through to media activation and tactics. We expect more advertisers to interrogate these processes and identify which parts they need to exert more control over and then build an operating model for media which gives them controls they need. Driving greater accountability and transparency over media budgets to consider them an investment not a cost. This may lead more advertisers to bring some of that capability internally but its more likely to be the upfront data and strategy scope rather than the media buying. 3. Action Plan for Media - we expect many more brands will follow P&Gs lead to define an action plan to reduce wastage of media dollars and implement greater accountability and transparency from the media supply chain. We close episode 100 with some clips from our recent #MediaSnack 100 party where we gathered clients colleagues partners and friends from across the industry to celebrate.

Despite all the noise and negativity around programmatic, the narrative is slowly changing. Advertisers understand that programmatic is a marketing technique not a technology. In this week’s #MediaSnack Tom and David discuss three thoughts on the NEXT step for Programmatic:1. It is not going away. Start getting excited about the opportunity of programmatic and believe that it will become simpler, easier and more empowering and inspiring, stop fearing the noise and the complexity, lean-in and be prepared to take some control. 2. Start refining a simple strategy now which will prepare you for success in a simpler programmatic future. We do this in a 4 part framework (Data, Knowledge, KPIs & Culture). This is still a nascent industry, everyone is still in a test and learn loop of continuous improvement and nobody should consider themselves “behind the curve” 3. Consider the barriers and silos internally that are going to hinder your success in programmatic. These could be fundamental, such as aligning marketing and sales. In a Programmatic future, both sales and marketing need to influence and guide Programmatic together. The closer these disciplines are aligned now the easier it will be to succeed in future. Continued silo thinking will lead to disadvantage, this needs to be addressed. In many ways, the programmatic sub-industry today is like the early Personal Computer market, complex and technical, obsessed with features rather than benefits, layered, commoditized selling, vendor driven and price focused. Tom and David argue that marketers should prepare themselves for the "Apple Mac of programmatic", a future market which is simple, intuitive, plug-and-play, trusted, focussed on the 'what not the how' and is empowering for marketers, to inspire and facilitate better marketing.When Programmatic is as easy as plug-and-play, advertisers will be ready to self-serve, self-buy, self-manage. That doesn't mean everyone will in-house it all, but it will be far easier for advertisers to take increasing control of media buying themselves. This, in turn, will change the shape of the industry and the role that agencies, vendors, ad-tech and others will play.

On this week's #MediaSnack we continue our countdown to the one year anniversary of the ANA's media transparency report, looking at the significant areas of change in the industry that we believe have been impacted by the ANA's findings. Tom is in San Diego this week attending the ANA's big marketing procurement conference called 'Advertising Financial Management' and reviews some of the early conference sessions. We focus on this episode on Media Terms of Business, specifically around agency payment models. Tom and David review recent reports in this area issued by the Association of National Advertisers, the US marketers trade body, representing 750+ brands, $200bn of media investment and a strong proponent of greater agency accountability. You can download a 7 page summary of the report here:http://www.ana.net/miccontent/show/id/kf-2017-trends-agency-compensationThe findings are equally insightful and puzzling in some key areas:1. Suggests a decline in the use of performance-based models, not sure we agree with that trend based on our experience working with large advertisers around the world in the last 12 months 2. Good to hear of more senior executive involvement in decision making around how to pay for external resources, which we believe will lead to more progressive payment models and more scrutiny given to how external agencies are performing and held accountable for performance 3. One alarming statistic suggested that 50% of ANA members we not aware of the 2016 media transparency report. Perhaps the data is not truly reflective of sentiment, we encourage ANA to qualify this, it got a lot of attention and an update of how effective the report has been would be helpful. 4. The report suggests a rise in commission payments for media agencies, but this is from a low base and likely to be driven by the way advertisers are paying for some programmatic media buying services. The rise doesn't suggest advertisers are shifting from fee to commission as a trend. We close this episode reviewing the news that the world's largest advertiser P&G has concluded their long-running media agency pitches across Europe. Not huge changes (as we anticipated, it's hard to move such large accounts, so if it ain't massively broke...). This review was under huge scrutiny and gathered a lot of industry attention not just because of P&Gs scale and influence but also because this was the first test of the media agency community since P&G's Chief Brand Officer Marc Pritchard laid out his Media Transparency Action Plan in January this year. In addition, it was to be the first major test in Europe of Omnicom's new media agency Hearts & Science (which was created around P&Gs brief in 2015 in US). As it transpired Hearts & Science was not successful in exporting their US model into Europe and P&G opted to consolidate media in the U.K. into Publicis Media which is actually a cross group solution including a number of Publicis media, creative, digital and data companies. This is a major victory for Publicis (and perhaps a perfect swan song for departing CEO Maurice Levy) and a huge blow to Omnicom's Hearts & Science because it calls into question the validity of the "groundbreaking" agency model. Hearts & Science was developed in the US for P&G, and for them to now reject that model in Europe suggests there's maybe nothing special (or especially innovative) about the model after all. Either that or Publicis have managed to iterate the innovative agency model further in a way more convincing to the world's most influential and demanding advertiser.

On this week's #MediaSnack we just think about Chief Marketing Officer, typically the company's most senior marketer.Check out the Harvard Business Review recent paper "Why CMOs never last"https://hbr.org/2017/07/the-trouble-with-cmosAccording to HBR, 80% of CEOs don't trust their CMO - you can see the pressure that a CMO is under when they don't have the trust of the C-Suite and perhaps that's why their tenure is often shorter than anyone else at that level. HBR also clarify different types of CMO and a framework (presumably for CEOs) to identify which type of CMO you might need for your business. Recently Coca-Cola replaced their departing CMO with a Chief Growth Officer which seems to be blending a sales and marketing role with more pointed focus on making marketing investment more accountable. Its also a reflection on the pressures on the businesses to deliver more short term results and growth. With perhaps less focus on long term brand building. Other companies like Colgate, Coty, Mondelez have also moved to this Growth Officer role - interesting to note that these are large consumer FMCG / CPG businesses. Is this because these companies can often have rather large gaps between marketing and sales culture. Alison Lewis, the CMO of J&J argues in Marketing Week that there is always a need for a senior executive in charge of the brand and that the CMO has always been in charge of growth. So why would you need a new title?https://www.marketingweek.com/2017/07/18/chief-growth-officer-johnson-johnsoThe evolution of the CMO role has got to be a good thing, improving accountability and placing far more scrutiny over marketing investments, especially the huge media budgets. Question of the Day: Will we see more Chief Growth Officers replacing the traditional CMO?

In this week’s #MediaSnack, Tom and David discuss the issue of awards, and more particularly, the challenges of creating media awards that advertisers really care about.The topic has been triggered by conversations in Cannes, where Publicis announced that it wouldn’t enter any awards for a year, saving a reported $20m (on Cannes solely), and where WPP has also mulled a rethink on its approach.http://uk.businessinsider.com/martin-sorrell-says-people-ripped-off-by-the-cannes-lions-2017-6In part, they argue, the awards backlash was really a backlash against the current Cannes environment, which is overblown and overpriced.However, Tom and David say there is a real issue when it comes to media awards. They are notoriously difficult to judge, and where many awards fail to answer the key question: did the media activity deliver a clear business result.David reveals that during his time working at brands there was a reluctance to release such information because it was simply too sensitive. A lot of brands, he argues, are very uncomfortable about submitting business success data.Many clients don’t really care if they (or their agency) win awards because they are too busy focusing on day job, even if the idea of celebrating success is enticing.Both Tom and David have been judges and say that most entries are quite underwhelming, with little substance. Even those that show how the agency has been insightful and used that to drive strategy can often contain little to demonstrate how effective the plan was for the business.Their solution is to create awards that read more like a business case, shrink the number of categories and reward really disciplined work. What really matters are effectiveness innovation, integration, showcasing brilliant talent and creativity; the ideal category list.At a time when media is so interesting and exciting, they say, now is the time for some business/organisation to take ownership of media awards in its truest form. Brands and marketers will want to contribute – if the definition becomes more celebrated in the right way – where campaigns demonstrate delivery of business KPIs.Finally, Tom and David sign off with a new feature: Question of the Day, this week’s is: Who benefits from the awards, is it the agency or the advertiser? Comments can be left below the line for discussion in future #MediaSnacks.

​On this week's #MediaSnack we ask whether the ANA's report into US media rebate practice, which has become known as #RebateGate has had any effect on Wall Street (and other financial market) valuations of the large marketing services groups like WPP, Omnicom, Publicis, IPG etc. Analyst perspective seems mixed, Morgan Stanley report the removal of the "overhang", whilst Brian Wieser is more cautious. The typical analyst questions to ID Comms have been: is this getting LEGAL? (maybe, unlikely, but not immediately) and will this trigger MediaPolooza 2.0 / Media Tsunami 2.0? (probably, again not immediately, likely to be in 2017 if so)We report on some of the many client calls and meetings we have had in the last 10 days which have tended to involve a calm and considered perspective and focus on immediate and long-term actions. We announced the release of the "Post-K2 Manifesto for Media Change" a simple 6-step practical guide to short and long-term actions which marketers need to consider, links to this are below. Next we discuss our plans for Cannes - Tom and David will be attending the world's largest annual communications festival which brings together leaders from the marketer, agency and vendor communities. We will be bringing #MediaSnack to Cannes with some great interviews lined up, check back next week. Finally, Tom is speaking at #TheIndieSummit - a gathering of some of the world's best independently owned creative, media and PR agencies.