Just ten years ago, media agencies were simply the middle man between the publisher and the advertiser. Their task was simple but time consuming: buy advertising impressions from publisher sales teams, create a media plan containing various different publishers and send this onto the client.

The task for the publisher was also simple: aggregate an online audience, create online ad-serving systems and evangelise the benefits of the online medium to brands and agencies. Everyone knew where they stood and what role they had to play in the supply chain.

Fast forward a few years and advancement in advertising technologies has significantly altered this. The display media buying model is moving towards that of the search engine model. The development of programmatic buying and trading desks had made the buying process more efficient. Programmatic buying can be done through what is known as an 'ad exchange'; a neutral ad platform where advertisers meet publishers.  They offer advantages over buying inventory directly from a publisher sales team, including natural price optimisation for publishers and fewer irrelevancies for consumers.

So how does this affect a media agency? And does the development of neutral platforms where advertisers can directly connect to publishers endanger the media agency model? The answer lies in the agency's ability to innovate on outdated business models. There are various ways in which an agency might innovate to avoid extinction:

Create their own trading desk
Media agencies can create their own trading desk as a department or subsidiary of the main agency. The 'Agency Trading Desk' is viewed as an internal centre of excellence for digital advertising buying on behalf of agency clients. The advantage that the agency has is that it already has a strong existing client base. However, the agency will need to up-skill in different areas by employing software engineers and algorithm specialists: roles which are not typically the reserve of media agencies.

Focus on content deals
Although it is becoming possible to buy and sell more premium ad formats (such as interactive ads, dynamically targeted ads etc.) through programmatic buying, there are some packages that an algorithm can't buy, such as content deals and deep site integrations. The agency's involvement here can be minimal though, as many publishers have both the expertise and project managers to develop the content and site integration for these clients.

Further develop 'non-core' propositions
Despite a media agency's key function having historically been in planning and buying, agencies have also offered additional services. These include brand strategy development and marketing mix modelling, such as using econometric modelling to predict the best future investments of media spend. Developing such areas will change the agency's focus and increase existing revenue streams to offset a potential decline on the planning and buying side.

Create 'digital business' proposition
As digital has becoming increasingly important over the years, 'digital media' has become 'digital business'. Something which was once a small sub section on a marketing plan for a client can now dictate their entire customer lifecycle and business model. There is a potential opportunity here for agencies to develop new revenue streams by advising the client on areas such as online user journey, website design and digital customer service. However, others are already active in this space and have high delivery credibility, such as design agencies and specialist divisions of management consultancies.

In conclusion, it is highly unlikely that advances in independent advertising technology platforms will signify the end of the media agency, as there are many other ways to make money besides media planning and buying. The digital space is cluttered and the lines continue to blur between the offerings of agencies, publishers, technology companies and management consultancies. However, at the end of the day, there will be space for anyone who adds value to the client's pursuit of profitability.

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