Yesterday, in the 2nd Part of this blog series, we examined how the 2 areas of ownership and 6 areas of control (see Part 1) compare and contrast when Advertisers outsource the Media buying to either an Independent Digital Trader or their Agency of record. Such scenarios beg the question why each party does not or can not instead enforce what would presumably be their ideal scenario of complete ownership and control?
Independent Traders, can only do so if the Agency/Advertiser accepts this arrangement, that is not beneficial to them in the terms of the implications what we explored in Part 2. It may or may not be similarly out of an Agency’s hands. So, why do Advertisers ever cede control to Agencies and Independent Traders and why do Agencies ever cede control to Independent Traders?
The long answer is one for another time involving many factors in terms of attracting and retaining talent, operational efficiency, scalability of industry wide knowledge, etc. However, all are broadly manageable by means other than directly ceding control. Solutions short of this involve partnering closely with companies like DQ&A that provide technological expertise and consultative services.
The short answer, and the real reason, is more systemic and harder to tackle via external support if internal stakeholders are not willing to be convinced. Cost. It is the fact that the short answer is Cost rather than Investment that is the crux of the issue. As this is an issue filtered through the lens of the traditional procurement process that is geared in this way in its expectation of justification. Procurement often holds the key to change and Marketing often speaks a different dialect of ROI. It is this that needs to be successfully bridged.
It is easier for the procurement process to justify the external costs of all that running advertising activity entails, than to justify this as an internal cost. One of the reasons for this is that any external costs can to some extent be wrapped up in an overall media cost, so the false-economy of outsourcing these functions cannot be easily cross-compared with the in-housing equivalent. Whether the media itself is being bought as efficiently as possible is also difficult to determine, meaning that the efficiency of the media is not sufficiently interrogated.
In conclusion, the whole process can be risk-averse which stunts innovation and blinds to opportunities. Competitive advantages are there to be had and there are certain companies leading the way. It is true that these are often the very largest of companies. However, Marketing Technology Resellers/Consultants such as DQ&A are there to help facilitate this industry-wide transition for Advertisers and Agencies of all sizes. Thus, the barriers to entry in this area are not as high as they once were.