Media Agencies in the Wave of Tech Revolution

Originally published by YiMagazine

As emerging digital technologies sweep through the marketing industry, organizations from both upstream and downstream supply chains are looking to master new tech and break business boundaries.

Many media agencies have taken the initiative to introduce technologies into the advertising world by acquiring real-time data and other means to predict the current ROI ratio for their clients. To maximize ROI, they adjust their media mix strategies based on timely feedback, and pick the safest and most reasonable investment channels for clients disrupted by the pandemic.

According to Linda Lin, Executive Chair of Mindshare Greater China, to find a platform where new tech can function and perform, media agencies need to build a talent pipeline to provide technical support on different levels and connect the most advanced technologies in the market with clients in need of business opportunities. Meanwhile, agencies should ensure clients' understanding of complex technology in order to strike a balance between tech and creativity in advertising and marketing.

Linda Lin
Mindshare Greater China Executive Chair, MMA China Co-Chair

Yi=YiMagazine

L=Linda Lin

Yi：Given your practice and experience of over 20 years, how do you view the overall landscape of the ad industry?

L：With the evolvement of technology, and the rise and development of big digital platforms, the ad industry has gone through many changes, and marketing communications are now more complicated than ever. In terms of demand from the brand side, market conditions have not been ideal in the last two years. Clients' marketing budgets are getting tighter as they expect a greater return on each investment and a short communication chain with fast feedback. But at the same time, more brands are starting to see the importance of long-term brand-building, which can help them break through the cycle. As a result, "Good Growth", which goes beyond simple sales growth, has become widely favored by the industry.

In terms of industry division of labor, every segment of the entire marketing industry has been vying for a share of the cake these past few years. Many media platforms want to launch direct-to-client products, while some clients want to internalize certain marketing aspects. Companies of up-and-downstream supply chains are trying to find ways to expand business boundaries.

But I firmly believe that professional deeds should be handled by professionals. Firstly, the market division of labor is regular. The reason why there are media, clients, agencies, and segmented companies in vertical tracks is that scale and specialization allow the industry to flourish. Once all segments are taken up by one individual, the output is likely to be very mediocre. This huge and holistic pursuit, therefore, does not make much sense. Secondly, survival of the fittest still applies. Each vertical segment has outstanding companies as well as those eliminated from the race due to subpar capabilities.

Yi：Any changes in the division of labor between different players?

L：Capabilities can vary greatly from company to company. Some clients are so technologically advanced that they just need us to cooperate at every step of the way. But there are also those who do not have an overall plan and rely heavily on professional agencies. They need help from people who understand emerging marketing tactics to build an entire system from scratch.

This also poses a big challenge to the talent structure of the agency. To build an effective talent pool, we need not only strategy and planning talent, but also those fluent in new tech and who execute well.

Yi：You've mentioned that the biggest contribution of media agencies is to bring tech into the ad industry. To you, what are the most groundbreaking technologies in this field in the last 3 to 5 years? In what ways have they helped brands?

L：Firstis the technology of continuously improving ROI. Due to the sluggish economic environment in the last two years, clients are placing a strong emphasis on ROI. Previously, modeling could leverage past data to simulate what might happen in the future. Now we can help clients predict the present, not just the future, and technology can help clients make adjustments and optimization in real-time.

Second is technology-powered cross-channel budget allocation. Nowadays, Internet giants are capable of making a series of offers to their clients and allocating a good amount of money to their walled gardens. But the walled garden barrier is still difficult to break in the short term. What clients want to know is which combination of different media channels is the most effective, rather than just throwing all their money at one platform. Agencies can help clients identify the safest and most reasonable channel to invest in through a scientific approach that goes beyond a single platform to maximize returns across multiple platform ecosystems and owned channels.

On the other hand, 2021 was the year of the metaverse. 2022 has seen the emergence of many self-proclaimed metaverse industry companies that are essentially a mix of technology companies offering different solutions. Some specialize in virtual avatars, others in blockchain, and their presence poses technical challenges for media agencies, too. It's hard to buy an all-inclusive metaverse company, but we can work with leading technology companies in each segment of the metaverse ecosystem in the market. For this, we need to have people knowledgeable of the industry within the agency and offer clients business opportunities at the same time. It is pointless to possess the technology without real-world application. In fact,  new tech does help clients create many impactful ad and marketing campaigns.

Yi：In terms of technology, how does the ad industry compete with the Internet industry and others on talent recruitment, and what's the difference in the demand for tech between these two types of companies? What kind of requirements and expectations does Mindshare have for its talents?

L： The kind of talent that the ad industry looks for is broadly divided into two categories. One is the senior talent with rich tech and industry experience. They need to be recruited directly from the industry they are in or other related industries. This type of talent differs from those of Internet companies: Internet companies may want frontline coding experts, but we want those who excel in both technology and communication. Senior talent can be at an intermediate level in terms of tech, but their storytelling skills need to be strong enough to explain complex technology to clients and act in frontline client service. This is where the watershed difference between the ad and Internet industries' demand for senior talent lies.

The second category is the younger generation with fresh minds. Advertising is a creative industry, which is very interesting and can entail exposure to different industries. We pay close attention to what kind of companies young people like and prioritize giving them room to grow.

As mentioned earlier, the ad industry has also undergone a change in its talent structure. For instance, initially there were quite a lot of people doing scheduling, running data, and making reports. These are in fact labor-intensive jobs that can be condensed into a very clear work chain, and can be written into code and replaced with tools by repeatedly accumulating experience and accuracy.

It's very hard to find versatile talents who are readily available, so we can only train them. Some understand the metaverse exceptionally well, some are very well-versed in eSports very well, and others are very familiar with social media and eCommerce. By rotating in different career tracks and learning from each other, these talents will grow to be multifaceted in a few years.

Yi: Media and creative have moved past division into integration. Certain ad agencies are also moving further upstream to be involved in brand strategy, positioning, etc. Do you think this reflects a larger, general trend? What's the current makeup of technology and creativity at Mindshare?

L：Different verticals have long been mature with more than two decades of development, and it is unrealistic to merge when all parties want to have more say. Emerging agencies may have full-service genes and a more complete chain, but it is quite difficult to get big.

The separation of media from ad agencies was inevitable because the market needs scale to operate media investments with technology. Media investment accounts for a very high percentage of the overall marketing budget of clients, far exceeding the creative budget. If 80 to 90 percent of the budget is spent on media, then only 10 to 15 percent is really spent on creative. Clients tend to care more about the technical and scientific returns on the investment.

That's why media agencies help clients make media investments not just by supplying the creatives, but also restoring the balance between tech and creativity. Media agencies need to spend a lot of money to invest in data and technology. They also need to justify and convince clients of investment strategies and solutions, pay attention to real-time market feedback, and focus on the impact of the output. In recent years, we have been expanding our boundaries to provide clients with preliminary strategy as well as post-link and sales-side services.

Yi："Uncertainty" has been a buzzword over the past few years. If you were to predict industry trends for 2023 and the next 3 to 5 years, what do you think would be the most critical to know? How will this affect media agencies?

L：Clients were very cautious in the first half of the year, showing an overall wait-and-see attitude towards consumer confidence and a lack of big market momentum for significant investments. The second half of the year is likely to be more optimistic.

Meanwhile, clients have grown more concerned about festivals and opportunities in the moment, and are willing to tap into any opportunities that can drive sales growth, rather than waiting for the arrival of shopping festivals like 618 and Double 11. Perhaps in the previous two years, clients chose touchpoints throughout a one-year cycle, placed their most important budgets on 618 and Double 11, and waited for the coming of these festivals with a relatively stable mindset. But now, these clients face a great deal of uncertainty and insecurity. The one-year cycle has gotten too long and volatile. Clients need opportunities that happen in real-time.

This is why "Good Growth", which focuses on agility and long-term development, is crucial to media agencies, especially now.

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