Media agencies are the No. 1 partner that brands are reviewing as COVID-19 rocks their marketing plans.
Sixty-three percent of brands are reevaluating their media agencies, according to AdExchanger’s 2020 industry outlook report. That’s compared to 56% of respondents reassessing their data partners, 44% looking at new measurement partners and just 19% reexamining their relationships with consultants.
Some media review activity is simply a result of contracts expiring with current agencies. Many brands review their agencies on a three- to five-year cycle, either driven by marketing or procurement. Review activity was extremely high in 2015 and 2016, and marketers could be hitting the end of that cycle, said Jay Pattisall, principal analyst at Forrester.
“There’s an opportunity to reevaluate cost structures and determine they’re getting the value they want to achieve,” he said.
In the survey, large, global brands were the least likely group to report reviewing their media agencies this year. That could suggest that price wasn’t the only driver, since global brands are most likely to have procurement-driven reviews. Uncertainty around COVID-19, privacy law and the impending loss of third-party cookies are also factors.
“The sands are shifting, and it requires that marketers, heads of media and their agencies stay on their toes,” Pattisall said.
Technology and data platforms have become a necessity in big pitches, driving major acquisitions of data brokers by holding companies over the past few years. As agencies tout these new services, marketers are testing the waters to find the best solution.
Marketers are also looking for partners who can integrate their linear and digital spend and help them achieve brand and performance objectives, as marketing becomes less siloed by channel and more focused on the consumer journey overall, Pattisall said.
“A review is an opportunity to find a partner that can achieve that for you,” he added.
Media agencies in general experience more review activity than creative and digital agencies because relationships tend to be more project-based. And brands have an easier time assessing the effectiveness of software providers, whereas agency services tend to be more subjective.
But price, of course, always plays a part in media reviews, especially during a recession. Reeling from budget cuts and disruptions to their marketing plans, brands are pushing agencies to take advantage of low pricing as consumer media usage spikes.
If they aren’t satisfied with their current partners, brands will look to switch to another agency that’s more competitive on pricing.
“There’s more pressure than ever on agencies to perform with marketers expecting more for less,” said Greg Paull, co-founder and principal at marketing consulting firm R3.