Thursday’s Themes . . .

October 26, 2017Uncategorizedgmtartaglia@aol.com

THE AGENCY-CONSULTANCY LINES ARE BLURRING: There’s a really interesting transformation occurring in the agency-scape thanks to the intrusion of business consultancies like Accenture, PwC, etc.. In a nutshell the consultants are starting offer media planning as an add-on service, and are effectively winning AOR-type work which used to be set aside for traditional agencies. Beyond just an efficiency play there’s a preconceived notion that the consultancies are somehow better at business strategy, so they must be better at marketing. The sentiment in perfectly explained in the attached Digiday link, with the quote . . “Hold on, this guy is from Accenture; it has to be brilliant.” So what are the agencies doing to counter this threat? As noted in the attached AdExchanger link, all four agency HCs are jockeying to provide consultancy-type services, which could effectively flip the script on the consultants. I don’t think there will be a clear winner or loser in this tug of war. Instead the line between business consulting and media agency work will become more blurred, and we’ll start to see hybrid organizations emerge – like the Publicis.Sapient example in the AdExchanger piece. No matter how this plays out the transformation will be fascinating to watch.

IMPRESSIVE GROWTH AGAINST SOME HEADWINDS: During yesterday’s Q3 Earnings Call SiriusXM announced that it grew their quarterly ad revenue 8% YoY, as reported in the attached RadioInk article. This is impressive for two reasons . First, Sirius usually competes for broadcast radio dollars instead of digital budgets. As you know Radio is having another flat-to-down year, so to go +8% in that sector is an accomplishment. The other impressive stat is that Sirius continues to grow its subscriber base, which self-generates additional ad inventory, despite the fact that US Auto sales are down significantly YTD. For years satellite radio has relied on free trials in new cars as the feeder system for paid subs. In Q3 Sirius reported over 300K new self-paying subscribers despite a declining auto market, which is a testament to the strength of their subscription offer.

PUTTING “GUARANTEE” LIPSTICK ON A PIG: In its latest attempt to legitimize Radio’s ROI, Westwood One is teaming up with Nielsen to launch a new initiative called the Westwood One Guarantee Program, as described in the attached AdWeek link. According to the article, ”Nielsen will measure return on advertising spend on behalf of the radio campaign”, but offers no details on how this will be accomplished. The reason there are no details is because it’s impossible to determine if a specific listener heard a radio ad and then made a purchase from the advertiser. That’s because broadcast radio doesn’t have logged in users. So they’ll have to use Nielsen’s ratings “estimates” to model out some correlation of the exposed audience to store traffic and/or register sell-thru. It will be probabilistic at best, but that won’t stop WW1 or the Broadcasters from positioning this as an iron clad guarantee to gullible advertisers. I don’t know who I feel more sorry for with this one – clients who are sleeping soundly at night on the false belief that their Radio advertising is guaranteed, or the WW1 sellers who can’t sleep at night because they’re peddling this garbage.

Sorry for the rant first thing in the morning. Have a great Wednesday guys!