Amid all the digital disruption discussion in our industry, few phrases are loaded with as much contempt as ‘the commoditisation of media’. The Internet has made more information available to wider audiences with growing appetites to receive, consume, share and delete content — instantly, and when and where they choose. Any material providing short-term gratification can reach a massive audience, but much of it quickly loses value as users and publishers drown one another out.
“With all things available to all people, all of the time, quantity is taking precedence over quality, especially when budgets are strained,” says Michael Rich, executive vice-president of advertising sales and content partnerships at FOX Networks Group Asia. Yet for advertisers, “a quantity-focused, commoditised approach will never deliver as much value,” he adds. “This is especially true in a time when consumers are ad-fatigued from seeing approximately 10,000 marketing messages per day.”
“If you don’t have clarity as to where you’re adding value as an agency then you’re going to be paranoid.”
—James Hawkins, Dentsu X
For many mass publishers and advertisers alike, commoditised content still spells trouble as the need to compete online means competing with the entire digital universe, too often churning out similar content.
Why should volume-seeking advertisers pay more than necessary for such tiny slices of market share that in reality are even smaller when factoring in ad fraud? And can publishers really afford to fall into the trap of accepting such low CPMs for their content? A study last year from the Association of National Advertisers found that for every programmatic ad dollar, only 38 to 46 cents are finding their way back to the publisher as ad spend is sliced and diced by fees and ‘tech taxes’.
Why agencies hate commoditisation
Media agencies, of course, are part of that supply chain. For those who buy and sell inventory through trade desks, one would think the notion of treating media as commodity comes naturally. But in any agency strategy discussion you’re likely to also hear how ‘media commoditisation’ must be avoided like a dirty shirt. That’s because it refers to the old model of media buying reliant on sheer scale.
“The pure play media agencies that have been focused on volume — to them it’s all about volume metrics because in the past they could buy attention and the bigger your budget the bigger your share of voice,” says James Hawkins, APAC managing director of Dentsu X. “Now it’s consumer demand-driven — they’re picking and choosing more and they want positive value and experiences as opposed to just being hit with this massive onslaught of content that’s not relevant or meaningful.”
But there’s another, more troubling meaning too. Some agency services have become commoditised themselves. The buying and selling of adverts has increasingly become an automated process.
This, in itself, is not a bad thing for agencies. Programmatic has been a boon to agencies as
it still requires analysis and monitoring to be effective. But it has also frustrated advertisers with real concerns about metrics, fraud and transparency, in some cases negating the value
of those services. The most bitter brands have decided to bring media in-house if they can afford it, or else deal with platforms directly.
“Brand safety is one of the biggest discussion matters that any CMO brings up in meetings I have,” says Mark Rogers, Asia-Pacific vice-president of publisher Dow Jones, who spells out his alternative to them. “We don’t just have scale, but we can protect you against fraud.”
In China, especially, brands are cutting direct deals with Baidu, Alibaba and Tencent (BAT) both for reasons of transparency and price. They’re increasingly bringing media in-house too, according to R3’s 2016 China agency scope, with 59% of marketers working closely on media planning and 46% leading media buying.
Agency leaders don’t see the sky falling just yet. “Different companies are taking different paths,” says Ashutosh Srivastava, Mindshare’s CEO of AMEA and Emerging Markets. He’s aware of P&G’s cost-driven drive to bring many media functions in-house but says they’ve yielded “mixed results”.
Unilever, on the other hand, points out Srivastava, is not keen to create “massive overheads getting armies of people to run their own trade desks and take programmatic in-house. It’s not what its shareholders would appreciate and that’s the majority camp.”
“If we’re not viewable and brand safe or have fraudulent traffic, we’re not premium anymore.”
—David Goddard, BBC
Navaneeta Das, who heads up APAC product and client development for Publicis Media, says the argument for circumventing agencies is based on outdated notions.
“The premise that the role of media agencies is just being the middlemen…is a fallacy,” she says. “The media agency’s role has always been anchored to brand building, awareness building, and connecting to consumers through data, research, and technology — with media neutrality as our preserve.”
But not all marketers agree that agencies are most trusted to handle all brand building or that media neutrality is an advantage. Opportunities to work directly with publishers are always there, especially in fields like content marketing.
“The agencies have been challenged because of commoditisation. I think they have been pushed on price,” says Dow Jones’ Rogers, who regularly hears brands say they’d like to work with him directly. “We still want to work with the agency and have them involved, but because we know our audience best, because we know our platforms best, we’ve been given perhaps a little more say on strategy.”
Diversify or die
With both publishers and agencies vying for brand attention in a crowded market, they’re both trying on new clothes. Rogers says when he now meets with brands, Dow Jones is treated like a consultancy or ‘problem solver’. Its commercial arm, WSJ Custom Studios, was set up in Hong Kong in 2014 to provide, as per its website, “strategy and consultancy, branded content, mobile, programmatic, high impact display, video and events.”
It’s not alone. From a diminishing ad model, media owners are diversifying. These days, nearly every publisher creates branded content and stages bespoke client events. Fox Networks Group Asia has launched Fox Content Labs with its own creative production house and on-the-ground activation. The South China Morning Post has formed SCMP Marketing Solutions with ‘branding and strategic planning’, ‘customer journey mapping’, and mobile solutions all on offer.
If it’s not hard to see how publishers are stepping onto agency turf, then the reverse is also true. Media agencies too are diversifying into the publishers’ world of content.
“Content marketing strategy is attracting more attention and budget — and for good reasons,” notes Publicis’ Das. “It is difficult to build trust and perception in platforms where engagements last a few seconds.”
Media agencies have had content arms for a while now, but the pace is picking up. Last year, IPG Mediabrands unveiled a new digital content agency, Mediabrands Society. GroupM launched its Motion Content Group globally last year. So as publishers pose as agencies and vice versa, is more competition between them inevitable?
“If you don’t have clarity as to where you’re adding value as an agency then you’re going to be paranoid,” says Hawkins. “There will be this suspicion: ‘Are they going to go directly? Are they going to cut me out?’.”
The value proposition
‘Adding value’ for brands is a common thread that both publishers and agencies agree is essential to fight commoditisation. For agencies, added value largely means using data analytics to cut through the clutter as consumer interest declines.
“What really matters to me is: Is it relevant, is it meaningful, is it insightful?” says Hawkins. “Data and analytics give us that empirical [evidence] to say: ‘Yes, this is resonating, there is engagement, they are interacting, there is a positive customer experience.” He adds, “if we can become more efficient and more effective by harnessing that technology, whether that’s AI or other platforms, it means we’re adding greater value.”
But are agencies adding greater value or are the machines adding it? If AI programmes like Albert can optimise campaigns and machine learning can parse data better than humans… is the ‘value-added’ work yet again at risk of being commoditised?
Srivastava believes we’re at least a 10 to 15-year cycle away from each brand owning and running its own AI-powered analytics engines or running their media mixes on autopilot, but it’s impossible to predict what will happen next.
He points to blockchain and newer technologies that will improve safety and give
far more accurate fixes on whether the brand experiences designed are working or not.
“It’s such a constantly evolving field but by no means will that become a commodity business. That’s an area agencies are playing in while keeping themselves relevant for the brand.”
Das argues data analytics are only as good as those who shape it. “Data is like gold — valuable but a commodity by itself. Analytics draw out insights and can lead to potential algorithmic automation and prediction, which can lead to strategic and inspiring marketing. This depends on the talent’s ability to see patterns, identify the right insights and intelligently leverage it — with imagination in the mix.”
So what about publishers? How do they add value? One way to stand out in the noise is with superior storytelling and higher quality content.
“Great content is, and will always be, a craft,” says Das. “The ingredients may be commoditised, but the ability to tell [a story] well, tailored to the receiver, will always be a differentiating factor.”
David Goddard, global head of programmatic trading at the BBC, tells Campaign what every media owner does — that it’s differentiated through storytelling. Along with Rogers at the Wall Street Journal, they point to their history of high-quality journalism as a calling card for their ability to produce ‘premium’ content.
But in a programmatic world, Goddard knows that what constitutes ‘premium’ content is changing fast. A well-told story will rarely impress advertisers anymore. “If we’re not viewable and brand safe or have fraudulent traffic, we’re not premium anymore,” he says.
Over at Fox, Rich agrees. “In the end, if publishers can trade on content quality, strong context and a brand-safe environment, premiums can be maintained.”