Every Friday, The Big Smoke looks at industry news curated by MediaScope. This week: The nonsensical modern approach to monetising media, and the clients who are paying their agencies – to be inefficient.
The reigning absurdity in the digital news economy (Frederic Filloux – MondayNote)
Today, the economic value of a journalism item stems from its popularity, i.e. the number of clicks (or views) it generates. A well-crafted listicle put together by a clever Millennial will generate more revenue than any public-interest piece, this in total disregard for who actually reads it, for how long, etc. That’s the absurdity in today’s system.
Every day, a large news organisation produces hundreds of content items in all manners of form (text, image, graphics, videos) and levels of importance. Most fall in what I’ll call the Commodity News category, chunks of information available everywhere at the same time. As a result, these lose their value in an instant.
By contrast, a small fraction of the output can be labeled as Value Added News; these items are supposed to be unique, more deeply reported than on average —they also cost much more to produce. This is the perfect demonstration for the correlation between editorial quality and commercial value. As intuitively obvious as this assertion might be, it is largely ignored by the advertising community (on both sell- and buy- sides). Why?
Are clients paying their ad agencies to be inefficient? (Patrick Scullin – LinkedIn)
“Sometimes the most creative work coming out of many advertising agencies are the timesheets.” A Fortune 100 client told me that at the end of every quarter, his big intergalactic agency would bring him large binders of time sheets demanding an increase in fees, as justified by all the extra hours worked. The client countered that the additional hours were because new agency people were constantly cycling on to his account, and some people just didn’t understand the business. The account head pointed to the thick tome of time sheets and cried his case.
It drove the client nuts, but his company eventually blinked and the agency ante was continually upped.
Are media agencies on the way out again? (MediaCom‘s David Beale – LinkedIn)
15 years ago, Campaign ran an article entitled “DEATH OF THE MEDIA AGENCY” (Aug 17 2001). The article mooted the potential demise of media agencies due to consolidation of buying points and falling margins. It concluded that we’d have to reinvent ourselves and offer a broader range of added-value services to offer a point of difference and ensure ongoing good health. Well, we did, and we’re (mostly) still here.
Media agencies have spent the last 15 years wrestling with each other, occasionally taking lumps out of each other’s billings then getting them back elsewhere. We’ve all sort of established a bit of an equilibrium where change in dominance is glacial. But every now and then there is a seismic event that rattles the media industry. Each time we adjust, refocus and carry purposefully on with a revised trajectory. T
he latest earthquake is all to do with data – or more specifically with data owners – and the question has re-emerged.