Why Brands Hold The Keys To DOOH Media Sales

Why Brands Hold The Keys To DOOH Media Sales

Association of National Advertisers Study Suggests Agencies Are Not the Only Path for DOOH Media Sales

NEW YORK, NY — A new study by the ANA brings to light two issues that impact digital out-of-home media sellers, and exposes significant relationship issues between brand marketers and their ad agencies.

Are Ad Agencies Losing Relevance?

An increasing number of brands are placing greater emphasis on in-house resources, bypassing their agencies of record, according to the Association of National Advertisers latest study, Enhancing Client/Agency Relations 2015. The ANA’s study polled 126 brands and 105 ad agencies to gauge perceptions regarding compensation, creative briefs and general process, and found that 54% of brands said that in-house marketing resources are increasingly becoming a realistic option for them, and 47% of those on the agency side agreed. The ANA’s study marks a double-digit increase by brands toward moving marketing services in-house, only 42% of brand advertisers had an in-house agency in 2008.

The shift by brands to in-house resources is not new. The ANA released a study in 2013 that warned ad agencies that they are at high risk of disintermediation as marketers increasingly moved marketing and creative services in-house. The 2013 study revealed that more than half of brand marketers were assigning newer marketing functions, such as digital, social and mobile to their in-house agency. Additionally, a majority of brand marketers (56%) had already shifted established business from an external agency to their in-house agency. Much of this shift is being driven by the need to develop internal expertise, and to gain greater cost efficiencies and quicker turnaround times. This shift represents a growing trend and reflects an economic environment that challenges corporations to do more with less.

The ANA’s study also pointed to quality improvements by in-house brand agencies. Sixty-one percent of brands said that lack of deep strategic thinking was a key weakness of their in-house agency, by 2013 only 30% pointed to this as a disadvantage of their in-house agency. Fifty-six percent of brand marketers reported that their external agencies perceive their in-house counterpart as partners, up from 41% in 2008. The ANA’s In-House Agency Survey April-May 2013 included 203 brand marketers. 118 reported that their companies have an in-house agency.

What does this mean for DOOH media? Brand are increasingly developing internal expertise in media buying and planning citing deeper institutional experience, brand focus, and cost savings. Digital out-of-home sales teams need to shift tactics as brand marketers move traditional and emerging functions in-house. Agencies will remain relevant, but DOOH media sellers that have not broadened their focus to include brand-side marketers may be leaving significant dollars on the table.

Briefing and Compensation

There is significant dissatisfaction about the quality of the briefing process and compensation agreements according to the ANA. Marketers and agencies indicated that a clearer agency assignment process is needed. Just 27% of agencies, versus 58% of brands, reported that brands provide clear assignment briefs. Additionally, brands and agencies were not in agreement that the brand approval process is working well – 54% of brands were satisfied with their current arrangement versus 36% of agencies. Compensation, typically a contentious issue, indicates only 40% of agencies believed it was fair compared with 72% of brands.

Agency talent resources is also a significant issue. Only 56% of brands believed that agencies have the right talent to meet client needs over the next two years. Agencies were slightly more bullish at 64%.

Despite these concerns 87% of brands and 86% of agencies felt that the agency is a valued business partner that plays an important role in brand strategy and driving business results.

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