Should Media and Creative Get Back Together?

It seems a lifetime ago that the advertising business operated as a single enterprise model. The original advertising agency model was a one-stop shop where creative and media services were accessed and contracted as a single package. Over time, public relations, direct marketing, strategy specialists and numerous advisory functions were added to these core processes.

When the early media independent pioneers conceived the idea of running media as a separate business, they had already worked out the fundamental principles: as media spend comprised around 90% of most advertisers' total advertising investment, this should be their focus. By separating these two disciplines, they could manipulate the bulk of the advertising spend as media experts, providing considerable scope for manoeuvre on a vast playing field.

Initially, media-focused advertising businesses employed tactics such as framing transaction and media plans that only worked at the net level - plans and prices quoted with the 15% agency commission deducted. To the unwary, prices appeared slashed at a stroke. To provide this service, the cost was represented by a simple fee, positioned very competitively, significantly less than the standard 15% agency commission charged for full service. Of course, the media independent buying business still qualified for that 15% commission as part of the buy. Media effectively grabbed creative's cut and rebated it back to make media look more attractive.

The advertising business hasn't stopped there. Managing the bulk of the money, the crucial 90%, has allowed media buying businesses to expand their manipulative and leverage powers to generate additional revenue streams. Beyond the agency commission (which after splitting was largely rebated to the client), we've witnessed the establishment of volume rebates, programmatic targeting, and inventory media as just three of the key profit enhancers.

The Case for Reunification

Why review this now, when the advertising business seems well-settled on its long-established model of creative businesses and media businesses operating as separate entities? There is a growing sentiment across the business community that there may well be advantages in returning to combined creative and media agencies, full service once again.

There are numerous advantages for both client and agency sides:

From the agency perspective, all the undoubted advances in trading efficiencies remain intact, and clients need not lose their share of these advantages. From the creative standpoint, wider efficiencies such as AI-generated output can benefit clients in a combined unit. This means the quality of creative thinking could, in theory, be better and more efficiently provided. The power of unified generation of media strategies alongside creative development can certainly be a winning combination.

The fact is that both creative and media are essential components of the whole consumer communication process. With media already highly tuned and motivated to find efficiencies as part of its DNA, alongside creative's growing appetite for new and more efficient idea generation, we have a natural fit waiting to happen. This means that holding companies eager to gain market share are already halfway there on one side of the equation (media strategy/buying), with the other side (creative) racing to catch up.

Client Benefits

For clients, this potential recombination exercise offers compelling advantages. While fundamental cost reduction must be secured, we anticipate that bringing together media technology operating across a broad spectrum, particulalry digital formats utilising automated techniques, may accelerate communication development closer to most advertisers' desired end result: sales and conversions.

The benefits should extend further by exploiting learning techniques and AI at their most powerful to homogenise both parts, building upon each success. Through this, creative and media can deliver consumer outcomes at their most effective and efficient levels.

Traditional advertising has been stuck in the 'hand-made' rut for decades. Recombination offers the ideal opportunity to scale and automate. While bespoke solutions need not be abandoned and can remain available when required, the bulk of operations will benefit from automation, AI-supported solutions, and scale. Recombination of creative and media promises these benefits.

A Note of Caution

Fuel Media and Marketing urges clients to approach the subject of recombined media and creative with a wary eye. We began our analysis by reflecting on why media became independent and how this process has matured over the years with a series of efficiencies. Creative is now going through its own revolution, moving into a world where scaled communication is possible.

Our recommendation for clients is simple: remember your poker face. There is always a time to advance and sometimes a time to fold. In this new world, ensure the already gained advantages stick before making the jump forward.

The bottom line is to bank the existing agreed savings, efficiencies, and techniques before agreeing to move forward and set new, even better value bases from which to advance your business.