Six-Second Advertising: What Does This Mean For Media Agencies?
December 6, 2018
This article was featured in Media Post on December 5, 2018
by Jim Berridge
It’s a fact that media agencies are going through a rough period.
In fact many could argue that decline first started with the rise of the big three social media platforms. Twitter, Facebook and LinkedIn all demonstrated that clients didn’t need to spend huge amounts with media agencies in order to target consumers. The social media platforms allowed marketing managers to do it themselves. However, it is not just the social media platforms that have been eroding the business cap of media agencies.
2016 was a particularly bad year for media agencies and one that they ultimately have failed to recover from. In 2016, the ANA investigation into transparency highlighted a trend of non-transparent business practices that put advertisers at a disadvantage. The report found that many agencies were reselling already bought media time back to clients at a mark-up and then pocketing the rebates.
Since the report came out media agencies have been under even more scrutiny, but that hasn’t stopped leaders such as Marc Pritchard, Chief Brand Officer at P&G, from stating that only 25% of ad spend ever reaches the consumer. The result – companies are now more likely to bring media buying in-house to understand exactly where their money is going and when.
So, at a time when media agencies are already feeling the pressure as spend is declining and clients are cutting down on agency fees, the last thing media agencies need is another major shake-up of the industry.
Unfortunately for media agencies, that could potentially be about to happen with the rise and adoption of short form TV ads. Short form ads (up-to seven seconds long) are already starting to appear on TV screens, especially in the USA. However they are yet to break into the mainstream. When they do, media agencies are going to be forced to adapt or face even more disruption.
In the first half of 2018, media spend on short form ads increased tenfold, as compared to Q3 2017 – highlighting how brands are turning towards shorter form ads, replicating online strategies on linear TV models. The big question of course is will digital formats be as effective as traditional ads in a TV format?
Our own data suggests that in fact, they’re not far off. Short form ads slightly underperform longer form ads for ‘ad memorability.’ However for ‘brand linkage’ they are comparable to longer form ads. Short form ads generate 22% brand memorability compared to 24% for 15- and 30-second ads. So the benefits for brands are clear – shorter creative and less media spend can be almost as effective. But what does this all mean for media agencies?
Well for media agencies – it is time to refresh the model – restart negotiations with media owners and networks and try to develop a new pricing structure that not only incorporates short form ads but ensures that clients get the maximum value from shorter form content.
A typical 120-second break may be broken up into the following configuration–6, 6, 15,30, 15, 6, 6 plus brand idents. This new configuration poses a problem for media agencies but also an opportunity. This new format means that media agencies have more flexibility when purchasing for clients–it also provides brands and advertisers with an opportunity to be more creative and less bound to traditional TV advertising.
But media agencies are commercial businesses. It will be in their interest to demonstrate the value in longer form ads to their clients because that is where they make the most money. Clients moving towards shorter form ads means less overall media spend. In addition to less media spend, media agencies are going to have to be even more transparent over the media fees for shorter form ads.
While it would be easy to group shorter form ads into 15- or 30-second slots already pre-negotiated, five short form ads do not equate to one 30 second ad–far from it, especially when it comes to brand memorability. Short form ads will require a whole new pricing model and it is the responsibility of the media agencies to demonstrate the value of this purchasing option.
When it comes to the renegotiation of media pricing it is going to be interesting to see how the networks and media owners move forward. Obviously, media agencies will be driving for a package-based pricing model rather than individual slots, but the power is truly in the hands of the networks and brands. To ensure transparency media owners and agencies are going to have to be very vocal as to the benefits of this new pricing structure and how it reaches key audiences and the configuration patterns.
However the media industry chooses to move forward, the clear rise in this new format over the past year, combined with recall and brand linkage data, shows that for better or worse, the short form ad is probably here to stay. What remains to be seen is how much disruption it causes in the industry for agencies, media planners, and networks and whether they can turn that disruption into opportunity.Back to Explore