There have been suggestions in some quarters recently that there is no longer a place for the media agency as we know it and that they have become irrelevant.
Well, up to a point Lord Copper. Agencies are certainly facing their share of business challenges, but isn't it more pertinent to ask whether creative agencies are becoming an irrelevance?
Let's consider the following. Many creative agency staff are already employed on a contract basis, to alleviate the inevitable peaks and troughs in demand from advertisers. But, earlier this year, one top 20 creative agency senior executive was heard to bemoan the fact that his firm had no ads showing on TV, no ads in production and no ads in pre-production - which makes you wonder what is left for everyone to do over there. The tumbleweed blowing through this particular agency's fancy London headquarters must have been a sight to behold.
The fact is creative agencies can no longer justify the high prices they charge for their services to cover, among other things, the running of these offices. Economics demand they readjust their business model to take account of the fundamentally different advertising world we now live in.
Let's take an example: one advertiser was recently quoted £150,000 for a set of idents to wrap around a sponsorship that cost them £250,000. That sort of ratio just doesn't stack up and, let's face it, the quality of creative in most sponsorship idents doesn't justify these figures either. Neither does flying off to some exotic setting to film an ad that could be produced for half the price nearer to home.
The recession has shone a brighter light on the long-term structural problems of media companies - not least ITV and Five - but it is not the underlying cause of them. Look closely at the recent financial results of leading marketing communications groups and you'll see it is media agencies that are driving what small growth is around at the moment.
Don't get me wrong: media agencies - and media owners - face significant challenges as the very structural basis of UK Media plc is called into question. But when spend is tight and return on investment is top of the agenda, media agencies are more relevant than ever.
