Thursday, August 14, 2008

Access 360 CEO says media agencies will buy place-based networks soon

Just got a message from MediaPost's Digital Outsider in my inbox (here's the blog link) with the following:
Noting that "the agency model is breaking down," Lon Otremba, the CEO of Access 360 Media said big agency owners are picking up place-based video networks as a way of "offering audiences and services bundled together," marking a new approach to vertical integration of media.

Rattling off examples, Otremba recalled that Omnicom acquired IMS, a merchandising service agency specializing in in-store promotional signage and displays and branded merchandise, and MarketStar, which provides retail and channel marketing including brand advocacy, product demos, events, and direct sales.

Unsurprisingly, agencies are also acquiring mobile marketing companies to boost their ability to reach young consumers, complementing place-based vide networks.
While I can completely understand where Otremba is coming from, this is a tough concept for me to agree with. While CBS, NBC, ABC and other networks have made strategic acquisitions and generally gotten more involved on the ownership side of digital signage networks, this is a natural extension of their current line of business, which is essentially owning over-the-air "real estate" in the form of TV stations and the channels of content that fill them.

Agencies, on the other hand, have to sell to these guys. Buying up digital sign networks would be tantamount to competing with their own customers. Not that that's anything new, of course, but ad agencies tend to be pretty conservative when it comes to challenging incumbant business models.

Now place-based media services companies, I could easily see. It's not hard to imagine Publicis, WPP or Omnicom picking up a few software and media creation companies here and there to put together a comprehensive digital signage offering to sell to their customer base. But competing with them at the network level just doesn't make sense to me.

1 comment:

mark fleisher said...

This is interesting. I own an advertising agency and have four small digital sign networks reaching a million people a month in three markets.

We do compete with local media in one market where both our agency and network clients are. I think there is some contention between us and the media. But since we are still one of the larger clients for most of the local media we get along.

Ironically, our company who is a reseller of a well known brand of digital sign software has been trying to show agencies how they can help a lot of their clients by setting them up with digital sign systems that the agency can operate for them including the content creation. But agencies seem to be the hardest to convince. I didn't know if it's that they don't see how better point-of-purchase advertising can help their client or can't see how they can make money administrating and creating content for their clients networks.

But I think it is the client. We have been trying to get some of the clients at our agency to use in-store digital sign advertising and it has been a hard sell, even some of those who have been advertising on our networks for years.

As the advertiser get more familiar with this medium agencies will start to promote the idea of their clients using it.