×

APAC Presents A Fragmented Challenge For Agencies, Programmatic Can Help Them Scale

Ahead of next month’s ATS Singapore event on 7 July, Phu Truong, TubeMogul Managing Director, South East Asia, and IAB Singapore Leadership Council Member, explains his opinions that traditional media buying agencies can leverage third-party ad tech providers to work with brands.

This “new hybrid world order” doesn’t necessarily require disintermediation for the industry to move ahead.

The programmatic digital video advertising market is poised to boom in Asia, but a number of dramatic transformations need to take place first.

The South East Asian advertising industry has largely adopted the traditional agency model, but recent technology advances now mean that model is fragile.  That’s because agencies need a certain amount of scale in order for that traditional agency model to work.  

However, South East Asia presents a challenging, complex and fragmented ecosystem that makes it difficult for an individual agency to achieve an acceptable return and create a sustainable business.

The upside is that the right programmatic software platforms now exist and can enable agencies to profit from the new software-driven revolution.

If media agencies don't adopt these technologies, there is nothing to say that their clients and even brands will adopt programmatic technology and bypass them completely. We are already starting to see this happen with global brands such as Lenovo, Allstate and Mondelez taking some programmatic functions in-house and taking control of their own data.

These brands recognise that they can achieve benefits such as transparency, control, ease of deployment and simplicity of execution around automated media buying.

As an industry, we need an open and collaborative approach. If we focus on how we can work together to benefit brands we’ll deliver truly innovative and unique solutions that move the market forward.

Let’s call it the new hybrid world order, where agencies, brands and platform providers all have access to the right technology and share knowledge that drives excellence and best practices. Everyone has to come along for the ride.

Agencies aren’t going anywhere but those that are more agile, adaptive and quickest to eliminate silos stand the best chance of long-term success.

The challenge for agencies is to offer truly integrated services to their brand clients and offer savvy strategic advice.

The biggest threat in any industry is to be deemed irrelevant. Brands now have, in a self-serve environment, the tools at their fingertips to embrace programmatic buying software more quickly.

This could threaten how agencies operate and de-position their status in the advertising ecosystem.

Brands will increasingly take back ownership of their data and centralise their strategy, but they need agencies to maintain proximity to offline media and inform tactics and campaign execution in each market.

Increasingly, agencies will need to look at their own operations and client relationships, and start investing in new ways of providing value.

Agencies are in a unique position to determine which of the many programmatic solutions is best for a particular brand. Our view is that brand-direct deals, where the advertiser connects directly to a demand-side platform, can actually enable agencies to form a tighter relationship with clients.

Programmatic media buying reduces the time an agency spends planning and buying, which in turn increases opportunities for them to be nimble with creative and media strategy, which is what they do best.

They can provide better value through their overall expertise, proximity to planning other media and strategising how programmatic fits into the overall media mix.

In short, programmatic is a win-win for brands and agencies where brands can use software to unify local strategies in a single place and gain real-time insights, making the agency’s job inherently easier because those insights inform overall media strategy decisions.

However, there can be no doubt which player is going to be in charge. The conversation is shifting and control is moving from the media agency to the brand.

As Albert Einstein once said: “The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.”

The same opportunity lies in wait for those that want to survive and flourish in the next evolution of digital advertising.