Media Agencies Must Embrace Tech (or They'll Die Trying to Avoid It)

Upfront Deals Made Months in Advance Need to Yield to Real-Time Adjusting

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Media buying has changed more in the last two years than it had in the previous two decades. Yet, behaving as though everything had stayed the same, media-buying agencies still remain too reliant on TV. Big discounted deals secured in TV's annual upfront negotiations keep clients' budgets safe, but in a communication channel with a declining audience.

Top executives speak off the record about how their media agency is stuck: The agency wants to move more client budgets into digital, but clients don't pay as much for digital work, and the agency can't afford to take a hit. Its survival depends on TV buys.

But advertisers' budgets are shifting anyway, to where they can track performance far beyond just pure ubiquity. Advertising efficacy is now measurable in seconds, not months.

The system of reviewing a publisher's click-through rate based on a past campaign, to determine if it is fit for booking a new campaign, is madness. Ad content that previously worked, or did not work, on a publisher's network could behave differently the next time. Audiences respond to an ad's creative and to how they discover it, not to the brand behind the ad.

Equally mad is planning and buying upfront deals on publisher networks months in advance for untested ads with overly restrictive targeted audience. We now have the ability to test multiple types of content and formats in real-time, discarding content that does not resonate with an audience and promoting content that works. Brands and agencies will become content machines, producing 100 different types of creative -- banners, native ads, videos, Vines etc. -- reaching new audiences as they discover that different people respond differently to different ads and format types at different times of the day.

Advertisers and their agencies need to get used to a world where ad content is disposable and more changeable in real time. Variable video streams with different endings for different demographics, for example, are now possible in real time.

We can crunch data at warp speed to know that Jimmy should be shown a Vine, not a YouTube video, as he's now switched his browsing from desktop to mobile and is not going to tolerate a poor connection when watching a video.

As publishers become more accountable to their advertisers, and programmatic buying moves from price to engagement metrics, the ad world is becoming more accountable for us all. Ad agencies that hide behind awards ceremonies and questionable efficacy from big TV spends, not advancement in technology, are just fooling themselves and their clients.

Richard Spalding is CEO and co-founder of video content marketing agency The 7th Chamber.
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