We’re seeing revolutionary changes in the media buying and planning business: Media agencies (who were formed to get low bulk rates for their clients) are trying to to add creative services to their offerings, finally comprehending that media and creative should never operate in silos and a vacuum. Big media companies such as Meredith and Time Inc. are starting to circumvent media agencies and deal directly with brands, offering integrated opportunities minus the commission. Last but not least, brands are starting to eye social media and try to find new ways to connect with people in innovative ways. And that’s where the real issue begins.
Let’s just look at Obama’s media spend, documented by ClickZ:
– $7.97 million was spent on Web ads in ’08 through October – $730k on local media through Centro and Cox, $45k for In-Game advertising, $600k for ad networks, $21k for NBA.com, Time Warner received $337k, Politico $146k and WashingtonPost.com $100k.
– $539k were spent on social networks – Facebook grabbing the lionshare followed by BlackPlanet.com and MySpace.
Now let’s look at the numbers (They don’t add up, there must be a lot of SEM and other buys that are not documented yet.) Almost $2 million were spent on tradional digital marketing. Take 10% commission and the Obama campaign paid $200 to execute the campaign. Since the creative had to be changed constantly, this seems to be a fair pay for the execution of the campaign. But the real issue is the spend on Social Networks: $539k, a commission of 10% would garner $54k for the whole campaign. And what was expected to be done by the agency in return:
– Communicate with 3,041.593 supporters (and growing)
– Supporting 12 different pages
– Uploading 41 videos
– Writing 1,670 notes
– Creating 15 albums
– Surveying/Responding to more than 526,000 wall posts
All this doesn’t include strategy sessions/design sessions etc.
Now, Obama had thousands of volunteers supporting his marketing campaign. Volunteers that could respond to posts, volunteers that shouldered the majority of the ‘dirty’ work that has to be done daily for the brand. (In his case most likely hourly.)
Obama was a movement, an exception. Brands will look at their agencies to develop strategies/tactics and execute them flawlessly. Insightful brands will add their own voice into the mix but the agencies are expected to shoulder the majority of the work. Unless they find a way to push minimum wage down to $1, agencies are facing severe issues dealing with these new expectations.
Jeff Jarvis coined the phrase Post Media a while ago and it seems to find traction in Social Media Circles. How will the Post Media Agency be reimbursed for their thinking and execution? The commission model makes no sense in the post media world. We will see a much stronger correlation between business goals/objectives and agency fees. And business goals won’t be determined by sales or leads alone, they will be defined as connections and relationships. We’ve seen first steps into that direction but we’ve just begun.
Don’t get me wrong: There will always be a space for monolithic media agencies, basing their business and high volume and low overhead. At one point, Google might take over this part of the business. But the real business and the next opportunity in the Post Media World is outside of buying spaces and time. It’s becoming part of the heart and soul of people.