The Oracle Data Cloud blog highlights the latest data-driven insights and trends in digital marketing and ad tech.

An observation of US and UK ad agencies and how they’re adapting to the fast-paced programmatic market

Working in an ad agency today is far from what was portrayed on Mad Men and what professionals experienced in the 1960s. These days ad execs are less likely to be enjoying steak dinners or martini lunches with clients, and instead, are spending their time staying up-to-date on the ever-evolving ad tech industry.

As the programmatic environment continues to advance, what other challenges are keeping agency execs up at night? And what are the main differences in 2 key markets—the U.S. and the UK?


Today’s ad agency challenges

According to eMarketer’s “The Brand-Agency Relationship” report published in June 2019, half of digital agencies say clients moving agency services in-house is one of the top challenges. Other worries include clients’ ongoing budget fluctuations and technological changes. Ad agencies are increasingly focused on building their own tech stacks (e.g., Publicis’s PeopleCloud, Omnicom’s Omni, and IPG’s AMP, just to name a few). This means keeping up with their tech investments while playing nice with the major tech partners, including Facebook, Google, and Amazon.

Besides worrying about technology, there’s also growing competition from consultancies. Management consulting firms traditionally have a relationship with brands on auditing but also advise on digital transformations. This means consultancies are well placed to offer recommendations on what can be handled internally instead of paying for an external ad agency.


The UK ad agency

Agencies in London are focused on the UK market but also tend to be hubs for the rest of Europe, or a center of excellence for all markets outside of the U.S. The benefit of working on a global account at an agency in London often means covering different countries, each with their own nuances. For example, the UK tends to be more advanced in programmatic compared to the rest of Europe, whereas Germany is more publisher focused and privacy-conscious.

While UK agencies face similar challenges, below are a few themes we have observed:

  • Privacy regulations: 2019 was a tough year for the digital ad market because of GDPR. A number of ad tech firms have downsized or shut down their London operations. Agencies have also seen their internal tech stakes impacted severely since the majority of the cookies were wiped out. We’ve been having conversations with agencies on “life after cookies” since the start of 2019. This also means that the UK and EU agencies have to be smarter around ad targeting and fully embrace alternative solutions such as contextual targeting.

  • Client and agency relationships: Unlike the U.S. market, where clients are open to meeting with partners, UK clients tend to rely more on their agencies. At Oracle Data Cloud, we are fortunate to partner with agencies and host joint workshops with clients and agencies together.

  • Culture: In the UK, grabbing a pint at a pub instead of a coffee for a meeting is much more common. The atmosphere to chat business, talk about football (aka soccer), and build that personal relationship is more casual. It is much more the norm to have a meeting without a PowerPoint presentation.


The U.S. ad agency

In the U.S., there is one massive market, which is estimated to reach $129.34 billion in 2019, compared to $19.64 billion in the UK. A bigger market means more fragmentation, with more people involved at the agency level.

There are also regional differences when meeting with agency teams in New York versus Los Angeles, for example. An agency meeting in New York is all about getting straight to business, whereas in LA there is more of a relaxed, yet still professional, approach.

A bigger, more fragmented market also means more innovation. Programmatic advertising was born in the U.S. with Right Media in 2003 (which was subsequently bought by Yahoo in 2007). We’ve seen the U.S. taking the lead on connected TV and over-the-top (OTT) advertising. Also, without the strict privacy regulations like GDPR, the U.S. has enjoyed a more liberal approach around consumer tracking and ad targeting online. This will likely change in 2020 with various state regulations such as California Consumer Protection Act (CCPA) going into effect on January 1, 2020.

On the business-relationship side, the U.S. is a market where clients tend to take meetings with partners directly and often without their agencies. This is a big difference from the UK market, where marketers tend to rely on their agencies.


Importance of finding a trusted data partner

Facing all these headwinds, agencies need partners who can add value and help solve for all these business challenges. Agencies need partners to enrich their own tech stacks while providing resources and support to address industry challenges such as consumer privacy and navigating a less cookie-dependent world. To be successful means becoming a true partner with a platform-agnostic approach.


Jacqueline's Bio

Jacqueline is a seasoned sales professional with over 12 years working in ad sales and ad tech starting in San Francisco, followed by several years immersed in start-ups and ad tech in New York. After five years navigating the London market and working across Europe and Middle East, Jacqui is back in San Francisco with Oracle Data Cloud, working with agencies and clients across verticals including Tech, Entertainment, Pharma, CPG and retail in start-ups like Vibrant, MaxPoint and large media companies like Yahoo! Jacqueline's Chinese name is Yi Yang Leng 冷宜讓, but friends call her Jacqui.

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