Fergus Stoddart
This is a post by Fergus Stoddart

Last week, I was asked again, (but this time on a panel at Mumbrella Publish) about whether publishers will be the new creative agencies. Are they a genuine threat that us agencies should take seriously?  

Obviously there’s plenty of reasons while publishers are well placed to take a slice of the agency pie, but as a battle-weary agency warrior, I certainly wasn’t going to be the one saying “run for the hills, it’s all over”. But, here’s my perspective...

At Edge, we’ve spent the last sixteen years working to stay ahead of the content marketing curve. In that time, threats have come from every type of agency – PR agencies, Media agencies, Social Media Agencies, brands bringing everything in house and publishers setting up in house agencies. We’ve had floods of journos who were apparently going to ‘steal all of our clients’ and our own team leaving to set up with our IP. I think I can honestly say that I’ve seen it all. 

Every new competitor brings a different type of challenge. With each one we think about it, (and have an internal debate), but ultimately we listen to what our clients want and put our heads down to shape our service and agency structure to deliver what is needed. And we are still here! Arguably, we’re doing more interesting, challenging and ultimately more effective work than ever before.     

We started as a custom publishing company. But with all this change, we’ve effectively morphed into creative agency first and foremost, with a long content heritage and a very strong content team. Clearly the debate still rages on, and the one thing we can be certain of, is that we will all change again! 

Here are the five points I argued against publishers becoming the new creative agencies, in front of an audience of publishers at Mumbrella Publish 2019!

1. Publishers have an inherent conflict of interest

Media owners should not be considered as a long-term strategic agency partner because they will often not be able to offer the best advice or solution, (and clients shouldn’t accept anything less). Let’s take the example of News Ltd and Woolworths. It amazes me that News publishes the Woolworths Fresh magazine while a team across the corridor is busy using Taste’s content to drive traffic to its major competitor – Coles. 

Can we really think News is the best strategic partner for Woolworths and wants Woolworths to be the most successful food publishing player in the market? Do they want Woolies to have the largest voice in food inspiration? Not a chance! Have they got the best people offering the best advice and learnings from the food market? Not a chance. They’re down the hall using Coles money to make sure that Taste remains the number one brand in food. 

Yes, I’ve seen some great work from media players, like the Canesten ad by Bauer Works and AWOL by Junkee for Qantas. But, I’ve also seen countless examples of money wasted, where media players have managed to persuade their clients to invest in activity that ultimately drives more traffic to the media players’ website over time. The advertiser ends up funding their partners’ business by growing their audience and boosting their engagement. And, guess what the media sales rep says to the client month later? ‘Thanks for building our audience with your last campaign, now our rates have now gone up!’ Brands need partners who are one-hundred percent media neutral.

2. Publishers are one-dimensional

Edge spent it’s first 10 years as a content agency focussed on the production of great content; whether it was in print, digital or social. Production was at our heart. My role in driving agency growth was to make sure that I sold in the type of work that I felt comfortable we would deliver, but it also meant that our team of writers, editors, designers and filmmakers were busy. Ninety per cent of our staff were focussed on content production – that’s what we knew, so that’s what we pushed. This mentality affected the solutions we put in front of clients, as we sold what made sense to prop up our business model. Now, we have a much more even spread across our team with creative/advertising, media and strategy, and it all works together to optimise the advice that we provide to our clients. We have a consulting mentality that is neutral to the channel or solution. It’s taken years to transition to this and I’m confident it will take many years for these new “media house agencies” to develop that mentality.

3. An integrated solution is the best solution for clients

In today’s digital and CX driven world, brands are moving to integrated agency solutions, and there’s a good reason for it. It’s no longer just about advertising, content and media, it’s about CX – making sure each touch point is delivering a brand experience that will influence the audiences’ behaviour. Yes, content and advertising have a role in this, but it’s the combination of the content, data, CRM, technology, digital marketing and media smarts that brands need for the future. Brands want to invest in their own media and brand experiences and they want an agency that can evolve and change to be on that same journey.

The big agencies are moving resources away from creative and media and into CX focussed solutions. Only last month we saw this when we heard the CEO of Dentsu outlining his strategy. So by the time the media houses have got their shit together enough to compete for creative, the battle ground will have, (or has already), shifted. Publishers and media houses will struggle to replicate this model, at least in the short term. They may have a role at the top of the funnel, but tech-driven middle and bottom of the funnel activities such as mass personalisation require media, data and dynamic people to understand the context of message delivery. Without bringing together expertise in all of these areas, the result will be mindless, boring retargeting campaigns. Full-service, (media and creative), delivers on integrated communications in ways that a new creative player from a media house or publisher will struggle with.  

4. Publishers will encounter cultural hazards

The publishing mentality and media house culture can clash with an effective agency model. Case and point: one member of our team worked at a social media agency inside the publisher, Time Inc. London. The agency had external clients and accounts, however they struggled to “fit” into the wider business. There was a cultural divide between the smaller social agency and the creative commercial teams, who worked on the publisher’s brands such as Marie Claire, Ideal Home & LOOK magazines. 

As part of budget cuts, the creatives in the small agency – who had only dealt with external client work – were merged with the publisher’s creative commercial team. This created a cultural clash as social media creatives were expected to suddenly be able to write advertorials and branded content for Time Inc’s magazine brands, while the magazine writers and designers were expected to create social assets for external clients. Many of the creatives weren't happy doing this new style of work, which ultimately created a cultural issue within the creative team. This shows there are cultural hazards when it comes to mixing agency work and publishing work. 

5. Structurally, publishers are not set up to give clients the best results

I remember thinking when Fairfax set up its agency – ‘God, I wish I could run that’. Imagine how quickly you could grow by leveraging the resources, mastheads and advertising clients to which they had access. But the reality is different. Once, we came across Fairfax in a pitch, (which they did not win), and I spoke to one of their senior employees. He said that the agency was proving to be too difficult – too slow, too many stakeholders, too many barriers and too many battles. 

Bauer and Pacific have also struggled with balancing their focus on protecting and growing their own brands with a client-orientated agency model. Their shareholders’ relentless requirement for a return and their need to protect the value of their media assets is at odds with the people-heavy, lower-margin agency model. I’ve already talked about conflict, but it’s the structure that will impede them. It’s no surprise that independent agencies are on the rise again. 

In this relentless era of change, agency partners need to be able to move and adjust to provide the most relevant, up-to-date solution. I can’t see these businesses structuring themselves to be nimble enough to add the value that brands are looking for now.   

I love a good debate!