Agencies Losing Cards in High-Stakes Ad Game

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poker_smallADOTAS – Ad agencies are risking obsolescence. In a business world more driven by interconnected data ecosystems than ever before, many ad agencies — even the biggest multinationals — are still operating with systems more closely linked to the 1970s than the 21st century.

At such agencies, the flow of information is lagging. Reports are taking too long to produce. New media can’t be integrated into media buying systems — or it’s taking too long to accomplish. Data from disparate sources aren’t being compared, measured and integrated. Change is not easily supported.

In short, key agency data — whether from media, research, accounting or scores of other sources — isn’t yielding all the value it can. And let’s be honest, after the creative product, data is possibly the single best reason there is to keep agencies at the table. It holds all the wisdom… but no one is asking what it thinks.

When an agency’s data is held in silos, it can’t generate the insights and efficiencies clients insist on. Analysis is fragmented and requires enormous amounts of human effort to uncover. Requests from clients for tailored information are met with “Sorry, we can’t make that happen.” Crucial statistical summaries are locked up in solitary spreadsheets on someone’s laptop, where they can’t be put to broader use.

Legacy mainframe media systems lie at the heart of the data problem. To understand these systems’ inherent limitations, look back to when they were at their peak in the late 1970s. The media landscape was a much simpler place then: five media types (TV, radio, billboards, magazines and newspapers), eleven national networks, a few sources of research data, and a couple of metrics.

No one could have anticipated the exponential growth and change we have seen since. Media types have nearly quadrupled through the introduction of search, display, VOD, mobile, and satellite TV. There are now 125 national networks—and where there were 18 million local and national spots sold in 1980, that number has grown to 12.5 billion today.

These mainframes and their applications — yes, many such systems are actually still in use — were not built to make the rapid software modifications necessary to accommodate whole new classes of media.

Another limitation is that when these siloed, mainframe systems were designed, the idea of leveraging data to provide business intelligence was incomprehensible. That’s one of the main reasons most other industries have converted off these mainframes and their dinosaur applications.

Finally, and perhaps most important, is that the knowledge base of people who understand mainframes and their antiquated architecture is dwindling. Schools are not graduating mainframe programmers, and the average age of a mainframe programmer is often past normal retirement. Knowing that media will continue to evolve, who will be around to keep these systems operating?

Despite these realities, too many agencies today continue to buy into the idea that automation is too expensive, or too complicated, to be profitable. As a result, routine media buys still require huge amounts of manpower and paperwork. And business economies are lost because the agency cannot trade or leverage critical information with its vendors.

Now is the time to step up and embrace what’s happening in the world of business data. Agencies have the opportunity to gain new and valuable relevance — not to mention competitive advantage — by implementing systems that turn information into insight.

With the new class of applications available, media buying and planning can become more efficient than ever before, creating efficiencies that benefit both sides of the equation. Campaign analytical tools can integrate buy data with a host of online and offline sources — ratings results, CRM data, store sales, website behavior, even social media buzz — to create amazingly accurate and verifiable measures of campaign effectiveness.

Simply put, by extracting understanding and situational awareness from multiple sources of data, agencies can not only hold more cards — they also can increase the value of the cards they already hold. The first step is to kill the mainframe media application which, like the dinosaur, simply cannot adapt quickly enough to today’s rapidly changing ecosystem.

In today’s business landscape, data is the best defense an agency can have against those who would separate them from the marketing process. The stakes have never been higher. And it’s time for agencies to ante up.

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