Are you 'Easy Money' for your Media Agency?

A Dutch study reveals that a staggering 79% of advertisers feel that way. The lack of knowledge about data, technology and tools hinders advertisers from challenging their media agencies and achieving better results. The solution seems to be simple:

1.     choose a Marketing Technology (MarTech) provider to realize a higher independence from your media agency

2.     Let the MarTech provider act as data custodian (or to help you build those skills)

This article describes what currently happens to many brands, its consequences and how to prevent this from happening again.

The study: Unequal Agency Relationship

To optimize marketing, advertisers need knowledge and capacity. Currently, both are lacking and the budget outlooks for 2024 don’t look good. Media agencies (claim to) fill that gap. However, the relationship between advertisers and agencies is far from equal.

79% of advertisers feel they have insufficient knowledge and skills to challenge their agency. As a result, they often feel like 'easy money.' They feel they lack (technology) knowledge to approach media agencies critically enough to establish an equitable and effective relationship.

What are the consequences and how can you change that?

The 3 short term consequences are clear: data isn’t captured/saved, therefore not used and this raises (ad) costs. That’s already a pretty big issue.

On top of that, there’s a list of strategic consequences. Compare your situation. We’re sure you are doing great… right?

Significant waste: Campaign Data is not captured, nor saved

Often, agencies execute the campaigns they proposed. These campaigns should deliver data through consumers registering, navigating the campaign website or using an app. Brand marketers hardly ever ask to ingest that data into their customer management platform, simply because they don’t have it and/or they wouldn’t know how to do this.

Brand2Consumer research shows this happens to over 90% of advertisers. They don’t realize that this data makes future campaigns much more effective and - above all - cheaper, being able to directly target interested consumers, rather than to advertise to them (again). Agencies do not reveal that using a customer data management platform would increase results and lower budgets. Simply because it’s not in their interest.

Always-on campaigns underperform due to lack of use of data

This is also valid for the increasingly popular intent-focused, 'always-on campaigns' to retain the target audience's attention. Here, customer data on behavior and interests plays a key role in targeting. Personalizing messages brings significant benefits… but not to agencies because their model erodes when always-on-campaigns work too well.

First Party data Strategy

With the disappearance of 3rd-party cookies, your 1st-party data strategy becomes very important. Still, even in 2023, only 38% of Dutch advertisers are working with agencies on a 1st-party data strategy. That’s where a Marketing Data Custodian takes the lead. A non-sexy title for a very sexy role: taking care of having the best data for finding and converting customers.

Data-rich, insights-poor and no technology skills

A striking 50% of advertisers consider themselves 'data-rich' but 'insights-poor'. Without proper interpretation, data is nothing more than zeros and ones. Furthermore, only 25% qualify themselves as mature in data-driven marketing. It seems time to change that. Also here, a Data Custodian plays a leading role.

Real-time marketing: are you there already?

Remarkably, 58% of advertisers hardly use data to adjust marketing campaigns in real-time, simply because they don’t realize the current standard of marketing technology. Especially in temporary campaigns, the habit of data-driven adjustments is missing.

Segmentation isn’t spot on, and therefore ineffective

A whopping 88% of advertisers aren’t aware of the targeting and audience-management possibilities modern platforms offer. High-precision audience targeting isn’t used by most agencies because the results are too good (=would lower the budget in the future) or because they lack knowledge about MarTech. The MarTech stack of both brands and media agencies lags among many respondents. 67% indicate they lack sufficient knowledge of marketing technologies and tools. They hardly know the differences between CRM, CDP or Customer Experience platform and have outdated ideas on how databases work. The cause lies in leaving execution at the agency (or the corporate IT department) without being able to verify the marketing effectiveness of the tools used.

Honesty is missing

75% of advertisers are not convinced of the full transparency agencies offer regarding their spent media budget. Ouch. Need we say more?

Solution: Ensure Independence through a Technology Platform

To overcome these challenges, companies should invest in working with a robust MarTech platform independent from their agency. Working with a marketing technology partner and filling in the Marketing Data Custodian role empowers the marketing department with knowledge, tools and data insights, reducing reliance on agencies and increase (cost) control over campaigns and decision-making. With such a partner, marketers gain a much deeper understanding of data, technology and audience behavior, leading to more targeted and personalized campaigns. A higher ROI is the inevitable result.

What’s happening at advertisers?

Media digitalization made efficient advertising more complex. The number of channels, content formats, buying methods, attribution models, tools, technologies and targeting possibilities has increased. Many advertisers move from individual campaigns to always-on funnels based on intent. Classic segmentations transform into intent based audiences. And on top of this, Marketing AI enters the arena with a blast, radically changing the landscape.

These developments require new knowledge and skills: knowledge of available first-party data, the use of tools, funnel-thinking, taking into account owned data and owned media and CRO. Which can all change dramatically again in the coming 12 months due to AI. Brands/ advertisers are struggling to keep up with all of this.

This leads to agencies not being sufficiently challenged or briefed adequately. Results lack and the relationship starts to erode. Advertisers feel like 'easy money' and do not fully understand what the agency does or what possibilities exist. On the agency side, this can result in complacency. Large media budgets are not utilized intelligently, leading to millions of euros of annual waste.

The Study

The study by Instituut Beeckestein included 24 advertisers from the 'top 250 advertisers in the Netherlands' and their media plans of the Q4 2022 and Q1 2023. Additionally, the knowledge and skills level of employees of these large and medium-sized advertisers was evaluated.