The United State of Independent Advertising Agencies

by | Apr 23, 2020 | Industry Insights

(Whirl)Wind of Change

Many of us are still trying to grasp the severity of the current coronavirus pandemic, which has not only uprooted the daily lives of consumers but also the way business is conducted across the world. While every industry is being affected, the advertising space has been dealing with a whirlwind of swift, whiplash-inducing changes. Like any great story, in order to fully grasp how the various sectors of this industry have been transformed, it involves looking at the past, present, and future. 

 

Let’s Rewind: “The Past”

The multibillion-dollar advertising industry is a fast-paced, competitively complex, and increasingly cluttered thunderdome, housing thousands of media companies, publishers, analytic and measurement firms, agencies, and advertising brands. Over the last few years, the U.S. ad industry has experienced consistent growth and is expected to reach $52.6b by 2023. Digital media has played a significant role in this growth, with agencies now investing more to integrate advanced technologies with their legacy systems. In 2017, the share of digital ad revenue surpassed the 50% milestone, almost double 2009 levels. Despite varying specialties, the different sectors of the ad industry collaboratively unite with a common goal in mind: to effectively and creatively connect with consumers in order to form meaningful brand relationships. Ad agencies are potentially the most versatile (and volatile) sector, serving as the middlemen of the industry. In 2017, there were over 13k ad agencies in the U.S.¹ Just as ads come in a wide range of formats, there are different types of agencies that brands can choose to partner with based on their specific goals. There are full-service agencies, which provide a complete range of ad-related offerings across all media and markets, and specialty agencies of all sizes, which tout specific expertise including traditional, digital, public relations, social media, creative, and media buying. In general, ad agencies have been placed under growing pressure by squeezed margins, movement to in-house agencies by advertisers, increased competition from consultancies, and increasing demands by clients seeking the best way to reach consumers.

How Coronavirus Is Changing The Ad Space: “The Present”

There are numerous factors at play in the daily agency world including, client demands, consumer behavior, technology changes, data innovations, talent acquisition and retention, in addition to financial pressures and harsh deadlines. The unprecedented coronavirus pandemic has caused a lot of knee-jerk reactions and hasty changes in media deals. No vertical has been left untouched. A surge in ecommerce activity and new brand safety concerns as coverage of the outbreak unfolds has forced marketers to quickly adapt their business models to better serve their customers, in turn, putting more pressure on agencies.  As brands continue to work on establishing their ground, agencies have been placed in a unique position. They are internally dealing with on-going layoffs, furloughs, hiring freezes, and restructuring, while simultaneously playing mediator for panicked clients and pivoting strategies following significant ad spending decreases, budget reallocations, and canceled pitches and events. Some agencies are temporarily shifting priorities, putting their talent and resources into helping those who are fighting the pandemic on the front lines. Larger agencies that have taken bigger hits with layoffs, have created resources like job boards to connect job seekers with companies that are currently hiring. On one hand, agencies are dealing with the on-going rejiggering (note: not canceling) of media plans by clients. On the other hand, they are also working with media companies and publishers to make sure that campaigns are appropriately rescheduled. While 89% of advertisers have been disrupted by COVID-19, only a third have canceled a campaign outright. The rest are changing their media mix and/or looking to shift their spending into the second half of the year. Despite the shifting of current media dollars, 81% of advertisers expect to cut ad budgets significantly this year, and 68% expect to spend less next year because of the pandemic.² As ad dollars are being reconsidered, many advertisers and agencies are taking severe cost-cutting measures by cutting any discretionary expenses they can. Speaking of “discretionary” costs, there are apparently unpaid bills plaguing the space. According to the Association of Independent Commercial Producers (AICP), advertisers and their ad agencies currently owe production and post-production companies more than $200m for work on commercial shoots that were completed but not paid for when work abruptly halted because of the coronavirus shutdown. The industry as a whole will need to solve for this financial gap in supporting the increasingly important production community because when we come out on the other end of this global crisis, marketers and their agencies will need the ingenuity of the production and post community more than ever to create communications to reach customers and stimulate the economy.³

Hey, Watch Your Tone.

Given the current state of the economy and the on-going health concerns, there is an increasing concern regarding sensitivity with advertiser messaging. Advertisers who aren’t careful with the execution of their campaigns risk looking tone-deaf or (potentially worse) like they are trying to capitalize on a global health crisis. Some brands have been applauded for their responses to the coronavirus crisis, while others have completely missed the mark resulting in widespread backlash. Some brands have even changed their logo to encourage people to practice social distancing measures. Ultimately, it is the messages of resilience, hope, solidarity, kindness, love, humanity, and advice on how to create the new normal that have been well received by consumers desperately seeking honest communications during this uncertain time. Emphasis in brand messaging may shift, with greater resources needed to reconfigure media plans, but the need for effective channels to reach consumers still remains. Considering the exorbitant amount of time consumers are currently spending at home, agencies should look to digital solutions. 

 

 

Independent Agencies Were Made For Times Like These

In the current economy, clients want to eliminate any unnecessary overhead or talent they don’t need, which gives a leg up to smaller, independent agencies. The smaller shops have cut out a lot of the fat that clients don’t want to pay for. They also have the autonomy to make their own decisions since they’re not beholden to a parent company. Independent agencies are more nimble, adaptable, unfiltered, cost-effective, responsive, and entrepreneurial by nature. While independent agencies who don’t have holding companies hanging over may have more freedom, they also face a number of incoming trends and challenges in an ever-changing ad space, driven by shifting media consumption and new technologies.  As marketers and publishers continue to navigate these uncharted waters, searching for a refreshed perspective on best practices for brand suitability, independent agencies offer unique advantages. Online advertising or retargeting (59%) and personalization (56%) were reportedly the top two trends that agencies would be used for in the year ahead. Delivering innovative ideas and attributing revenue to marketing are the top barriers to the success of a client/agency relationship according to ~46.5% of marketers.4 Indie agencies are also more likely to have happier employees. Seventy percent of independent agency employees said they are happy in their jobs, compared to just 53% of those at agencies owned by holding companies. Seventy percent of staffers at independent agencies also described their workplace environment as positive, (vs. 49% of staffers at holding company-owned agencies).

 

 

What Comes Next?: “The Future”

It’s safe to say that there are more questions than answers right now regarding what the future holds for the industry. It’s important for independent agencies to focus on surviving the short-term, but also consider what the upcoming weeks and months could look like. So how can indie agencies set themselves up for long term success, while also maintaining “business as usual” operations in the meantime? Adapt, adapt, adapt – but first, they must prioritize the health and safety of their employees. Sure, technology aids in daily processes but it’s the people that are the bread and butter of the business.  It goes without saying, it is better to be proactive than reactive in the ad industry. However, the COVID-19 outbreak has proven to be a situation that no one was prepared for. As agencies guide their clients through the current crisis, they must take this as a lesson when developing a post-COVID plan. 82% of U.S. agency and marketing professionals admitted to having no contingency plans in place to manage media investments in the face of a large-scale national or global event.2  During uncertain economic times, as brands face declining revenues and shortages of cash, natural tendency has been to cut back on seemingly “discretionary expenditures” such as R&D, marketing, and advertising. The universal conflict seems to be whether such cutbacks are wise or detrimental in the short- or long-term. However, past examples of brands continuing to advertise through economic hardships such as the 2008 recession, have proven that it is beneficial in the long run. Consider this: over half of U.S. consumers said they’ve opted to delay the purchasing of various products and big-ticket items in light of the outbreak.6 That means brands will want to ensure these products are top of mind when the outbreak-trajectory begins to improve and they resume spending. When marketers cut back on their ad spending, the brand loses its “share of mind” with consumers, with the potential of losing current – and possibly future – sales. An increase in “share of voice” typically leads to an increase in “share of market.” An increase in market share results with an increase in profits.

 

 

Dig Deeper For A More Solid Foundation

The current pandemic aside, what will independent agencies have to do to stay ahead of the incessantly shifting industry? Research and insights will serve to assist in creating a successful path forward. CMOs are zeroing in on consumer data now more than ever and that data has to be actionable and fuel powerful stories. Agencies who are able to marry creativity and data will be best fit to take their clients’ rapidly changing needs to the next level by providing rational perspective on current and future forces and trends affecting the marketplace. It is important to keep track of changing media landscape and consumer sentiments, which ultimately drive purchasing behaviors. Throughout its history, the advertising industry is no stranger to disruption. Having shown continued resilience, there is no doubt that it will continue to do so given the innovation and proven adaptability of agencies. While there’s no official rulebook on how independent agencies should handle the current situation, their smaller teams and flexibility offer an advantage in this ad climate. It may involve reconfiguring strategy but it is possible to add value for clients and exceed expectations without pushing spend. Agencies need to concentrate on outcomes rather than the number of bodies for campaigns. All solid relationships are built on trust and communication. Indie agencies should most importantly focus on maintaining meaningful and transparent human relationships with their clients. At the end of the day, what’s an advertisement without the most important people on either side of it?

 

 

Source:

  1. Statista, November 2019, “Number Of Establishments in the Advertising and Related Services Industry in the United States from 2007 to 2017, By Sector”.
  2. Advertiser Perceptions, March 2020, The Coronavirus Effect On Advertising Report
  3.  Deadline, March 23, 2020, “Commercial Houses Owed $200 Million By Advertisers And Ad Agencies For Work Before Shutdown, Trade Group Says” Article
  4. Agency Trends Survey. Conducted by Ascend2 and Research Partners, March 2020
  5. Digiday, Agency Culture And Employment Report Spring 2019
  6. GlobalWebIndex, March 2020, Release 3: Multi-market research

Mike Seiman

Mike Seiman, CEO & Chairman, is the founder of Digital Remedy, a digital media solutions company leading the tech enabled marketing space he co-founded while still a college student at Hofstra University in the early 2000s. The company has grown quickly and is now a major player within the crowded digital advertising landscape. The rapid growth of Digital Remedy, formerly CPXi led to its inclusion on Inc. Magazine’s list of fastest growing privately held advertising/marketing companies in 2008, 2009, 2010 and 2014. Mike was selected as a semi-finalist in Ernst & Young’s Entrepreneur of the Year initiative in 2010 and 2013 and as a finalist in 2009 and 2014. In his free time, Mike serves on the Board of Trustees of his alma mater, Hofstra University. He also focuses on numerous philanthropic initiatives including sitting on the boards of the H.E.S. (Hebrew Educational Society non-profit community center) and Children International, where he spearheaded the development of community centers in both Guayaquil, Ecuador in 2010 and Barranquilla, Colombia in 2014.

David Zapletal

Before graduating in 2005 with degrees in Retail and Consumer Science (with an emphasis in eCommerce) and a Minor in Public Business Administration at the University of Arizona, David Zapletal had already successfully grown a start up ad network from serving an initial 1 million impressions per day to over 10 million impressions per day. It was his deep understanding of internet advertising during the industry’s beginning stages that led him to another start up at the time, CPXi. More than 8 years that have passed and Zapletal currently serves as Chief Operating Officer for Digital Remedy. In that role he continues to help grow and implement optimization tactics across various ad serving platforms, oversee daily operations of the account management and trafficking groups and maximizes ROI for Direct Response advertisers as well as for Publishers. Outside of Digital Remedy, Zapletal commits his efforts to an organization called Camp Dream Street, a camping program for children with disabilities, where he serves on the Board of Directors.

Jeff Reitzen

Jeff has worked in multiple facets of the online industry, from sales to operations as well as consumer engagement, content analytics and most recently in data optimization. His career began as a wedding, bar mitzvah, and Sweet 16 DJ where he learned the delicate balance of crowd energy management. Quickly, this skill made him incredibly successful in managing online sales for Geico. He joined CPXi at its startup stage as employee number 4 and has been a key driver of continued growth. His unique knowledge of what converts in the digital ad space, the application of data, and how to optimize platforms for efficiency continues to be invaluable to Digital Remedy clients. Today, Jeff is responsible for innovating and optimizing all Digital Remedy offerings including platforms, systems, tools, and internal processes—ensuring the organization remains on the precipice of the marketplace.

Mike Juhas

Mike Juhas, has over 13+ years of experience in ad tech client services, working with brands, agencies, and publishers ranging from top 10 advertisers to small regional organizations, to rep firms, holding companies and independent shops. An integral member of the Digital Remedy team, Juhas leads all client relationships, including facilitating onboarding and integration, establishing relationship protocols, overseeing Quarterly Business Reviews and status meetings, navigating financial coordination, and overseeing 24/7 team support. His specialties include consultative services, planning strategy, and account management disciplines. Juhas lives in New Canaan, CT with his wife and two daughters, and their dog, Perry–the unofficial company mascot.

TJ Sullivan

TJ Sullivan has over 20 years of media sales and leadership experience. His knowledge of the digital media landscape, ability to develop strategic solutions that solve brand challenges, and talent for motivating sales teams, have made him a vital member of several media and ad tech organizations. Before joining Digital Remedy, Sullivan was VP, Connections at iHeart Media, a cross-divisional group that enabled national advertisers to seamlessly work with multiple iHeart business units; CRO of Reelcontent, a video distribution company for brands; SVP of sales at AdoTube, a video ad network; and was Co-Founder and SVP of video measurement company, OpenSlate—for which he is still an advisor.

Sullivan had served as the President of 212, New York’s Interactive Advertising Club, and currently advises many early stage start-ups in the programmatic and video space. Notably, RUN (sold to Publicis in 2014), Futures Media, Transmit.Live, and Kubient.

Outside of his work in the media industry, Sullivan sits on the Board of St. Elizabeth School in Wyckoff, New Jersey and the Advancement Committee of St. Peter’s Prep in Jersey City, New Jersey. He resides in New Jersey with his wife and four children.

IP Zone: Leverage the relationship between users and the location of their IP addresses in a cookie-free, safe and scalable way.

Behavioral: Combine first party with network analytics and enormous scale to define custom audience channels that are optimized to sites with high brand engagement.

Demographic: Reach the right audience based on demographic characteristics such as age, gender and income.

Mobile Device: Target users by mobile device type (Smartphone, tablet, etc.), carrier and operating system.

Geo-Location: Target your audience residential cluster, proximity to retail locations, campaign level DMAs and more.

Contextual: Place a relevant ad in front of a user who is reading content that contains specific terms.

Buying Power and Quality

Let’s be honest. Your ad ops are limited by your access to only a handful of channels and DSPs. You want more reach and better prices, but don’t want to sacrifice quality in order to achieve those goals. Digital Remedy has access to a vast multitude of channels based on relationships we’ve cultivated over nearly 20 years in business. That means we get the best prices, have personal relationships, and don’t get sent to voicemail when we call.

It also means that we can execute omni-channel ad ops for better prices than an internal team, while ensuring the quality is up to industry standards. On top of access to all sorts of specific audiences we’re able to to leverage first- and third-party data across all your campaigns and pivot across platforms based on results. Any campaign, any budget, any platform, any audience. Digital Remedy backed by AdReady is restriction free ad ops….and what could be better than that?

Resources, Time, and Overhead

When was the last time you enjoyed balancing budgets, reading resumes, dealing with aggressive sales teams, or wasting years of time for small gains in performance. By partnering with Digital Remedy you get the full support of $30m in OPEX including marketing teams, sales teams, and a dedicated 24/7 ad operations team. No hiring new employees for media optimization, business development, or account management. No months of training and on-boarding. No long meetings crafting sales materials. Just your team focused on making deals, and our teams and tech focused on supporting and executing those deals in a tech-enabled, digital ecosystem designed to get the most out of any KPI.

Reporting and Support

How nice would it be to have all of your data and insights in one location. We don’t mean an excel sheet sent out once a week with complicated charts, or an XML file with pages and pages and pages of tables (what is this, 2003?). We mean a fully customizable dashboard reporting in real time, or as real time as possible. You get to decide the how, what, and when of the reporting you’re seeing. And that’s ALL of the how, what, and when’s. If you want to see breakouts of all of the individual campaigns in your system, done. If you want broad scope comparisons of all of the campaigns in the last year, done. If you want to see CTR’s for specific audiences and compare them to CPM for your best performing advertiser but limit the scope to campaigns greater than 30k, done. All of this is at your fingertips with the AdReady Dashboard, all in one place.

Jessica Cortapasso

With more than a decade of experience in human capital management, Jessica Cortapasso serves as SVP, People at Digital Remedy. After graduating from Muhlenberg College, she quickly recognized her passion for people and entered the workforce in Human Resources where she gained expertise in employee relations, designing strategic benefit plans, and the development, implementation, and curation of corporate engagement initiatives for big-name brands and small companies alike. Becoming a member of the Digital Remedy family in 2013 while simultaneously acquiring her Masters Degree in Human Resources Management and Development from New York University, Jessica has steered company culture through significant events ranging from acquisitions and a rebranding, to the development and application of our Core Values that shape our daily business practices. Cortapasso resides in Brooklyn, plays competitive volleyball, and loves spending time with her nieces.

Erez Feld

Responsible for the financial and legal practices of Digital Remedy, Erez brings 22 years of experience in precision financial analysis, growth management practices, strategic acquisition, and investment leadership. A graduate of Hofstra University, Erez began his career modeling for corporate finance, and expanded his accounting prowess in the real estate sector. Erez joined Digital Remedy in 2008 as a senior accountant, and helped to create and build an accounting department that could support the rapid growth of the company and aligned with those needs. Over the past 12 years he has evolved through various positions at the company within the finance discipline, supervising and mentoring additional finance personnel, while growing under the tutelage of Michael Fleischman, former CFO of Digital Remedy. Today, he leads the Finance Department by supporting high-level projects such as acquisitions and restructuring, and is responsible for overseeing all financial assets, establishing financial procedures, controls, and reporting systems.

Michael Fleischman

After a successful career as an accomplished Fortune 500 financial professional leading Corporate Finance and Strategic Planning at Cablevision Systems Corporation and its programming subsidiary Rainbow Media Holdings, Michael currently plays a role in the overall management of Digital Remedy including direct responsibility for all financial-related activities including accounting, financial planning, M&A, legal, insurance, real estate and banking relationships. Michael brings more than 25 years of media experience at Cablevision and Rainbow Media and during his career was instrumental in the launching and managing of a number of cable television networks including 10 Regional Sports Networks across the US, American Movie Classics, Bravo, and the Independent film channel as well as the structuring of corporate partnerships with companies including Liberty Media, NBC, Fox/NewsCorp and MGM. Additionally, he was the finance lead on a number of professional sports team acquisitions including Madison Square Garden, the successful IPO of Cablevision and a tracking stock at Rainbow Media.Michael was involved in the creation and launch of Rainbow Advertising Sales which was one of the Cable Industry’s first Local Advertising Sales Divisions.

Tony Pascal

With over two decades of experience in the design, product, and technology space, Tony joined Digital Remedy as a graphic designer in 2007. His responsibilities quickly expanded, landing him in leadership roles across multiple disciplines including creative direction, analytics, monetization optimization, and management of platform development. He continued to grow with the organization over the last fourteen years, overseeing all design, development, and execution of Digital Remedy products and platforms. In his current role as SVP, Product & Technology, Tony leads product and technology development for the company and acts as the go-to liaison across teams, ensuring alignment on all aspects of internal and client-facing technology initiatives.

Prior to Digital Remedy, Tony built and ran his own direct response company from 2002-2007 after graduating from New York Institute of Technology, where he learned the fundamentals of digital advertising and optimization strategies that still remain relevant today.

In a previous life, Tony was a ski instructor and still remains an avid skier today. When he is not leading product development, he can be found working on old cars, rock climbing and hitting the slopes.

Gayle Meyers

Gayle Meyers is an entrepreneur, venture partner, investor, and operating resource in the digital media and marketing industry, with over two decades of executive leadership experience. After launching a management consulting firm, Growthing which is focused on optimizing growth strategies for executive leaders and their organizations, Meyers has frequently been tapped for high-profile consulting and advisory positions to help marketing technology companies enhance their in-market presence.

“Gayle is widely recognized as a leading strategist with years of expertise in the ad tech space,” said Mike Seiman, Chairman and CEO of Digital Remedy. “Her career in discovering and integrating game-changing technologies in the marketing industry will serve as an invaluable resource as we continue to enhance our product suite in the months ahead.”

With expertise spanning multiple disciplines, Meyers frequently serves as a keynote speaker at industry conferences for companies such as Google, Verizon, Omnicom, LiveRamp, LinkedIn, Twitter, and Oracle. A list of her notable past clients who have benefitted from her unique insights to increase shareholder value includes Tinuiti (acquired by New Mountain Capital), Adometry (acquired by Google), MediaForge (acquired by Rakuten), Integral Ad Science (acquired by Vista Equity Partners), and Tapad (acquired by Telenor).

Matt Sotebeer

With 14+ years of experience in ad tech and emerging technologies, Matt Sotebeer brings an uniquely innovative approach in his role as Chief Strategy Officer at Digital Remedy. As CSO, Matt focuses on the intersection between the product, product marketing, tech, data, and sales teams, while fostering productive cross-functional company-wide relationships to inform and influence sales, educate clients, and optimize company performance.

Matt has an extensive knowledge in the integration of data science, creative, and media solutions to drive sustainable growth for companies, with a focus on designing customized, scalable solutions leveraging machine learning alongside human intelligence. Throughout the tenure of his career, he has successfully managed global teams aligned to common goals, encouraged collaborative problem solving, and supported talent growth for entrepreneurial companies including MiQ, Rocket Fuel, and Audience Science.

Jeremy Haft

A proven strategic, revenue, and team leader with over 20 years of experience managing and scaling revenue in the competitive ad tech landscape, Jeremy serves as Chief Revenue Officer at Digital Remedy.

Before joining the team in October 2022, he served as CRO at Channel Factory, where he reorganized the revenue team for sustainable growth and increased the sales team by 3x to drive predictable and more accountable revenue. Prior to that, he served in a decade of leadership positions. Most notably, as SVP of Sales at Amobee and as VP of North America Sales at Viant/Adelphic. At both organizations, Jeremy successfully built and scaled platform and business solutions from their infancy to achieve the desired corporate goals.

Jeremy graduated from The University of Vermont and currently resides in New Jersey with his wife and two children. In his spare time, he enjoys traveling to tropical locations, dining out, cooking feasts with friends, and any new fitness trend he can get his hands on.

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