Winter Is Coming

Legacy media companies getting into the agency game are feeling the relief of having found a strategy that now sells well, delivers well and has solid margins, allowing them to swiftly take advantage of their local market knowledge, sales force and relationships. 

I call it the cockroach approach because at the end of the day, if a media company has a strong agency infrastructure in place when the legacy ivory towers collapse, when the smoke clears they’ll be left standing to sell whatever the natives want. 

Sounds good, right? However, this bomb shelter is but an island. Maybe even a mirage. And I fear too many think it is the destination. (Whew! That was close!) However, this model only allows the company to grow to the degree that it can be responsive to changes in the market – and assuming that agencies need exist at all. 

Nothing beats a good defense like a strong offense, and legacy media companies need to be more aggressive in their strategies – neither resting on shifting sands nor narrowly defining what’s possible by the false assumption that who they are now is who they should be. No one else in the world of all that is coming to eat your lunch has those distractions.  (See earlier blog about 5 things). Nor are they obsessing about maintaining status quo. 

  

So, while digital media is hyperventilating about mobile, newspapers are partnering with pure plays and TV is busy trying to maintain control by forcing digital distribution into acting like old-fashioned TV and everyone is tacking on agency services to their repertoire, they haven’t noticed that there is a significant storm building on the horizon that I believe is going to lead to another serious round of disruption. Anyone could get left in the cold. Digital will be no exception. 

The agency business is in the middle of its own cycle. While the model may have just become affordable at the local level, it won’t stop there. Because now anyone can get into the business (and by that I mean everyone) and local markets are one of the last robust opportunities,  the race to the bottom is on:  New companies are offering websites and app builds to local businesses for free in pursuit of other business goals. 

If you can offer a Wordpress site for $2,000, now the business owner’s nephew can do it for $250. What agencies there are have also lowered their prices. The young guns smell blood in the water, too.  I promise you that in every market there are one or two punk-ass kids selling SEO, SEM and guaranteed lead generation for pennies and that money is not going to you, either. 

And then there are the do-it-yourselfers.  After I gave a speech on social marketing to the local Chamber of Commerce, a local restaurant owner stood up and told the entire group how he swore off any paid media for an entire year and launched one of the most successful joints in town. He powned his own social media strategy like a boss. I know pros who could take lessons from him – the rest of the room certainly did.

  

He’s also buying Facebook ads with no help from his friends. I’ve been saying for a while that Facebook is the single biggest disruptor to media. If legacy media is the ship, FB is THE iceberg. People think it looks like a manageable or waning threat.  Don’t be fooled. Look at what’s beneath the waterline. Seriously.  Pay attention. They own the world. Almost every stitch of content, dialog, sentiment, news, product idea, feedback, promotion, event planning and digital presence on the planet goes on, passes through or is represented, behind that walled garden -- and they don't have to create any of it. Google schmoogle and Yahooligans be damned. Facebook knows it doesn’t need re-sellers.

There are also the sellers you never saw coming. GM now offers matching incentives if dealers buy re-targeting through their own agency. They spend their own money on themselves. Why not? (This is a tip of another iceberg. To actually see what’s going on below the waterline of the auto industry, check out Gordon Borrell’s recent industry memo on it.)

So, when it comes to solving your disruption problems, don’t get comfortable in your agency paradise, sipping pina coladas, slapping all the other cockroaches on the back thinking you’ve got it all figured out. Once again, no one else is. Keep up. Think like a punk-ass kid with a world of open source options at his finger tips, or like a new company wanting to create a local network, staking a claim in your landscape with its eye on the bigger prize. The money is moving.  Winter is coming.