The evolving role of procurement in agency remuneration
Matt Semple, Media Management Practice Lead
Friday, April 24, 2020
The changing role of the media agency is now a well-established topic of debate within our industry. Advertisers have begun to take greater control of media decision-making and are actively starting to restructure their operating models to improve value and drive transparency. While some elements of this are may be on hold because of the ongoing COVID-19 crisis, there is undoubtedly already need for greater agility, flexibility, and value. As a result, the evolution of many elements of the agency model is likely to speed up, not slow down, in the coming quarters.
One of these key elements, in our view, will be an increased focus on how brands work with their agencies to establish partnerships built on aligned objectives, even when some services have been brought in-house. Well before the coronavirus pandemic began, advertisers started to recognise that simplistic cost-cutting was damaging their brands. Good evidence for this comes in a report from the World Federation of Advertisers (WFA), conducted with Ebiquity, that found that 86% of advertisers are “looking for new ways to extract value from agencies [beyond just media cost], with a focus on planning, insight, and strategy”. With a heightened focus on costs, it has become even more important for marketers and procurement professionals to approach value in the right way.
At Ebiquity, we’ve already witnessed at first-hand procurement professionals’ change in attitudes. These are very evident from discussions at the Ebiquity Media Management Procurement Forum we established last year. Progressive stakeholders in procurement are now taking a more holistic view on how they can increase or safeguard media value to drive greater ROI, and they are working side-by-side with in-house media specialists to drive optimum value from agency relationships. This position of leadership from progressive procurement professionals will turn into competitive advantage as we enter an inevitable period of economic downturn. Media agencies are at the same time putting forward different commercial models, increasingly tailored to specific client needs. Among these changing dynamics, agencies are also beginning to offer simplified, flexible solutions to their advertiser clients – solutions that will inevitably grow in demand.
Progressive stakeholders in procurement are now taking a more holistic view on how they can increase or safeguard media value to drive greater ROI, and they are working side-by-side with in-house media specialists to drive optimum value from agency relationships.
In our latest paper, we look at how remuneration models are evolving, and what procurement leads should consider moving forward.