The Matter of the Media Agency

When people think of advertising and marketing, examples such as a cool video ad, an attention-grabbing poster, or catchy jingle come to mind. But these ads would never be seen or heard if it were not for the media behind them. Let us then give a shout out to “the media factor” that makes advertising possible—particularly in today’s times.

Media agencies matched with profitability of holding groups

Aside from being high-powered holding groups, what do WPP’s GroupM, Publicis, and Omnicom have in common? As observed in a recent Digiday article, these companies either maintained their current financial positions or earned more revenue in the last quarter—all thanks to their media agencies. In short, media agencies have been responsible for the profitability—therefore security—of these companies.

Media: The driving force for growth and success

The Digiday article points out that the holding groups listed above count on media to drive growth. This is due to deriving margins from the simultaneous buying and selling of assets—known as arbitrage—around media buying. Significantly, the growth derived from media divisions within these holding groups is more profitable. It follows that this arrangement is especially advantageous when other economic factors are not as secure and the forecast is uncertain.

Ad dollars versus demand for services

There is currently an unusual dichotomy taking place: Ad dollars have been increasing, but the demand for creative services has decreased. This has resulted in a greater competition for media dollars. Both the buying—and now especially, selling—of media are becoming much sought-after services in the efforts to keep up with marketers’ demands. This is one indication of how agencies are undergoing noticeable changes, with their media services remaining as the reliable “constant” for maintaining and achieving success.

As summarized by Angela Mertz, Vice President of Integrated Media at EGC: “The more agencies change, the more they stay the same—with media as the backbone of their businesses. But what makes this even better is that it’s not just growth; it’s profitable growth.”

In the advertising and marketing sector, whatever changes take place, there will always be a need for media services—which benefit any business seeking them. If you want to know more about effective planning, buying, placement, or any other matter related to media, give EGC a call. Media matters to us—big time.

(For an added example of our knowhow in media, please read our recent blog, “Keeping Brands Visible in an Election Year.”  As you may be able to tell from the title, there is no greater challenge for brands than competing with political ads. This blog explains how it’s possible to be seen, heard, and remembered.)