Advertising technology is changing the traditional media agency model, according to new research.
The research, released by digital marketing specialists AdRoll, indicates that digital ad technology is gaining greater importance in the media world than traditional, strategic or consultative solutions.
It found that 86% of UK media agencies evolving their business models in this way to reflect the growth in influence of advertising technology.
AdRoll surveyed 200 media agencies for its report, ‘Welcome to the Era of Mad Tech’.
Key findings:
• 80% of agencies say that buyers are evolving more into tech strategists and traders
• 88% say planners are evolving into data analysts
• Yet 40% of agencies feel challenged to develop profitable models around ad tech partnerships
• 60% have expanded to offer options, such as mobile and social media, in the past 12 months
More than 80% of respondents in the AdRoll survey agree that the increasing influence of technology means media buyers are evolving more into tech strategists and traders.
Meanwhile, 88% say the rise of ad tech means media planners are now evolving into data analysts, and 83% say both buyers and planners are evolving into account managers and creative consultants.
According to AdRoll’s research, rather than becoming strategic consultants, media agencies have been busy adopting analytics and data specialisations to diversify and strengthen their offerings. 69% describe themselves as ‘tech savvy’ and 60% have expanded their mobile and social offerings in the past year, compared to just 39% who chose to adopt a more consultative approach.
90% of agency respondents say they have a close relationship with their ad tech partners – 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.
Yet while many in the industry are harnessing the positive effects of these partnerships, the transition to modernisation is not without its challenges.
40% of agencies say they find it hard to develop profitable models around their ad tech partnerships and 47% say ad tech is simply not as monetisable as traditional media.
Managing director of AdRoll’s EMEA, Marius Smyth, comments: “To move further forward we should unite as a triumvirate formed of the agency, the ad tech platform and the client – it comes down to establishing an even greater means of communication between all parties. Ad tech companies themselves have a responsibility to help agencies best use emerging technologies to deliver optimal results and best practice. After all, we often highlight the transparency offered by data – let’s back that up with a promise of transparency and openness to help agencies combat concerns such as monetisation so they can leverage ad tech to deliver results for clients that are profitable.
“The industry must come together to be open, transparent and comfortable with learning and improving as we go. That way, we will all prosper on the promise of ad tech.”
AdRoll’s report, ‘Welcome to the Era of Mad Tech’ can be downloaded via www.AdRoll.co.uk
Methodology
Performance advertising platform AdRoll, in collaboration with PR agency WithPR and insights specialists OpinionMatters, conducted a survey of 200 UK media agencies to explore how ad tech is transforming the traditional business models for media agencies.
The sample comprises 200 UK media agency employees, including 150 senior management and 50 media planners. The 200 respondents include directors and business owners, as well as media planners and senior managers. The research excludes sole traders and guarantees
an equal balance of networked and non-networked agencies.
The poll was carried out in August and September 2015. Telephone interviews were also facilitated by AdRoll and carried out by WithPR with three agencies – one small, one medium and one large.