Reinventing the Agency Business Model for Digital BACA Advertising - PowerPoint PPT Presentation

Reinventing the Agency Business Model for Digital BACA Advertising Forum Sofia, May 26, 2015

Money follows eyeballs Google Confidential and Proprietary

4,000,000 Bulgarians online today Google Confidential and Proprietary

Eyeballs are shifting online… fast! Internet penetration of households in Bulgaria Google Confidential and Proprietary

2,500,000 New Internet users coming in the next 3-5 years Google Confidential and Proprietary

The next 2.5M won’t be anything like the first 4M 2.5M 4M Google Confidential and Proprietary

For them, all media will be digital 2.5M 4M Google Confidential and Proprietary

But something’s not right... Google Confidential and Proprietary

Money follows eyeballs Google Confidential and Proprietary

Yet, in Bulgaria there’s a misalignment Google Confidential and Proprietary

What will this chart look like in 2020? ? 2020 Google Confidential and Proprietary

Are media agencies prepared? ? 2020 Google Confidential and Proprietary

Digital is NOT a slice out of the media pie Google Confidential and Proprietary

It’s a whole new pie Google Confidential and Proprietary

Incremental change won’t cut it Google Confidential and Proprietary

Neither will this approach Google Confidential and Proprietary

The agency model must be Reinvented Google Confidential and Proprietary

7 Factors to Reinventing the Media Agency for a Digital World Google Confidential and Proprietary

1. Redefine the Agency Value Proposition. Google Confidential and Proprietary

Old model : New model : Access to local audiences ROI from global platforms Google Confidential and Proprietary

2. Client relationships must change. Google Confidential and Proprietary

Old model : New model : Negotiating in a zero sum game Mutual interests and co- dependencies Google Confidential and Proprietary

3. Different People . New skill sets . Google Confidential and Proprietary

Old model : New model : Sales, Accounts, Creatives Analytical growth hackers Google Confidential and Proprietary

Google Confidential and Proprietary

4. Success Metrics & KPIs. Google Confidential and Proprietary

Old model : New model : Reach, GRPs, Impressions Targeted engagement + Audience Insights! Google Confidential and Proprietary

5. P&L margin management. Google Confidential and Proprietary

Old model : New model : Commissions & discounts Time management of experts Google Confidential and Proprietary

Fee structure Pros Cons - Simple and clean - Time overruns are costly Fixed project fee - Predictability / Stability - No incentive for results - Focus is on experts - Incentive to work slow Hourly rates - Revenues scale with workloads - No drive for efficiencies - Translates easily from current - Time overruns Percent of media model - Incentive misalignment: asking for spend - Scales with client budgets more budget is suspicious Fixed plus - Guaranteed income with upside - Hard to measure, can lead to client for performance conflict performance - Perfect alignment of incentives - Complete transparency Pure performance - Biggest profit potential - Accurate measurement that both sides trust Google Confidential and Proprietary

6. Speed and Agility . Google Confidential and Proprietary

Old model : New model : Campaigns, spending spikes Always-on, Mid flight iteration Google Confidential and Proprietary

Google Confidential and Proprietary

7. Transparency . Google Confidential and Proprietary

Old model : New model : “I can live with their price .” “I believe in their approach .” Google Confidential and Proprietary

Google Confidential and Proprietary