Media agencies eye new income stream. Join the debate.

Darren Woolley
Founder, TrinityP3 - marketing consultants

Media agencies need to diversify beyond traditional media commissions and client fees for survival. 

Increasingly we are seeing media agency revenue coming from non-media sources such as content production and management. 

The main issue is that media agencies need to be transparent in the sources of this income. If the income is from media proprietors for non-media projects it could be misconstrued as another type of commission possibly compromising the media agency’s media neutrality. But beyond that media agencies like all businesses have the right and the necessity to generate profits in any legal way possible.

Chris Ryan
CEO, Aegis Media Hong Kong

Despite the crippling commission levels our industry finds itself with (and yes, we did it to ourselves), nobody wants to go back to the days of behind-the-scene deals, or channel planning ‘under the influence’. 

Trust is important in any relationship, and we can expect even greater transparency in years to come. 

Of course, we’re not charities either. If our clients don’t pay us, we can’t pay talent. No talent, no business. So, like other industries in recent times, we now face the test of building a new commercial model to survive. 

It’s happening already. The future for media agencies is increasingly dependent on the depth of partnership we develop with our clients today. The smarter we are in research, planning, implementation and optimisation, the better the return on investment for our clients. 

Fortunately for media agencies, this involves the provision of some services on a fee basis -services that demonstrate clear value and good business intent. Additionally, performance bonuses for good results and service levels ensure we continually improve. 

Quite simply, if we show we care as much for our clients’ business as they do, we will enjoy longer-term, more fruitful relationships. 

That can only be good for all involved.

Lee Smith
CEO digital, Asia-Pacific,Omnicom Media Group 

We don’t see the media as a source of income directly. 

We look to the media proprietors for innovation, targetting and content opportunities that deliver against objectives. 

However, diversity in their offering will help us drive revenue from our clients through our ever evolving services.

There are certainly pressures on fees and we’re all living it. What we’re trying to do best is to showcase what it takes to get great work done, and yes, often it costs money. 

We’ve spent a lot of time lately educating procurement teams at the client end in order to find win-win scenarios. 

Marketing people want services that deliver, and their procurement teams want to ensure they can secure those services competitively. Fee cutting is not a new thing and we’ve had enough painful experiences to know when to accept and when to decline a fee that will simply not allow us to perform.

In more recent times, we certainly have had to diversify our services offering. This is a critical component to staying future-proof as well as to ensure continued success in the industry. 

Media agencies are learning some tough lessons in how to run businesses and I’d have to say that managing clients is no longer the greater part of the challenge.